“I don’t know when is the last time that humanity created something that is going to live on for years to come.” - Nakheel advertisement
It was almost a full year ago that I heard these words in the state-of-the-art visitor’s center of Nakheel, the real-estate subsidiary of Dubai World. The unfinished development projects of Nakheel in Dubai – like The Palm and The Globe – now have investors around the world fearing another massive jolt to the international financial system. From what I have read, even if Dubai World were to fold completely, the actual effect on global markets would pale in comparison to the collapse of Lehman Brothers – which ushered the world dramatically into our ongoing Great Recession. See this chart to compare the relative sizes of the companies.
Nevertheless, I think that the expansive coverage of Dubai World’s woes is appropriate. It serves as another important chapter in the rise and fall of the over-hyped myths of the commanding heights of global finance. In addition to writing down in my notes the highly entertaining quote above, the only other thing that I wrote during the video was: “This is a bet on on global capitalism!!!” Indeed, the development project of Dubai was quite simple: complete integration with the ever-churning engines of international commerce, finance, and tourism – greased, of course, with the oil and natural gas revenues of neighboring Abu Dhabi. What could possibly go wrong?
As Jan Randolph, head of the sovereign risk group at IHS Global Insight, noted, Dubai’s rags to riches, and possibly back to rags, tale “has all the elements of a Greek tragedy.” And these pictures taken this past year visualize for us this roller-coaster story. Luckily for Dubai though, global capitalism will most likely bounce back in the next few years which will once again attract investors, tourists, and globe-setters back to its prodigious condos, malls, and man-made islands. On its rebound, perhaps Dubai will act with a bit more humility and forgo boasts, such as ”We are now building and shaping the vision of a modern world.”
With this said, I hope that Dubai and the Emirates as a whole do not completely abandon their dreams. Located in a region where violence, repression, and destruction dominate the daily realities of so many, the success stories coming out of the Gulf states - if you could put aside the legitimate concerns over labor and human rights for a second – were unique over the last few decades. In many ways the ambitious state-building and relatively liberal environments did inspire many people in the region. In addition to the often mistreated laborers (who also are bearing the brunt of the collapse), middle class Arab professionals – lawyers, accountants, journalists, and engineers – have flocked to the U.A.E., Kuwait, Bahrain and Qatar and built quite successful careers and enjoyable lives there. As propagandistic as it might sound, there is a shred of truth in the quote of an employee in the video: ”Nakheel is a company that allows you to dream and it empowers us to make those dreams a reality…We are building a country.”
