People are pouring out of Dubai
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Stumble This"Short of opening a Radio Shack in an Amish town, Dubai is the world’s worst business idea, and there isn’t even any oil. Imagine proposing to build Vegas in a place where sex and drugs and rock and roll are an anathema. This is effectively the proposition that created Dubai - it was a stupid idea before the crash, and now it is dangerous. "
from Boing Boing
from Boing Boing
"We are currently rich due to oil sales, but that will run out, so we need to do something to make Dubai able to attract people post the oil"
So, they set about creating a huge playground. Just because you can't have sex on the street or other such things it doesn't make the place any less interesting or attractive to visit.
As she says, she's not concerned about the long term prospects there... it will survive, it will pick up.
They have created something that people will want to visit. Short term pain because prices became unrealistic, but long term this is not a stupid idea at all.
Detroit of the Middle-East?
1. Dubai's revenues are mostly from tourism, trade, real estate and financial services. Revenues from petroleum and natural gas contribute less than 6% (2006) of Dubai's US$ 37 billion economy (2005).
2. Alcohol and women are readily available in Dubai, prostitution is a large problem not addressed or mentioned by the authorities. Drugs are almost impossible to get however.
3. Investment in the real estate market was mostly based outside of Dubai, and has been ballooning for many years, the belief was as in the West that investors could ride out the wave before it collapsed. Demand is also mostly foreign. Commonly buildings are built with ownership rights sold in other nations, before a single brick is laid. This requires alot of down payment on which the actual company takes very little risk. Now multiple that by several folds magnitude and you have the large real estate market created.
4. The collapse is beneficial to Dubai as rent rates have been reaching absurd levels for the long time. However this will not affect Dubai's growth in the long term.
It's a good thing they have so many excellent universities and trained all those MBAs and engineers.
Actually Dubai has alot of good universities like Al Ghurair University, American University in Dubai, British University in Dubai, Canadian University of Dubai, Dubai Polytechnic and Middlesex University. Education is an important policy in most GCC states because they have very young populations.
Foreign labor however is used on either contractual basis from the West, or as large labor for construction from South East Asia. However when contracting work Dubai has been good in learning from their contractors and applying those lessons locally themselves unlike Kuwait where they just contract everything to foreigners.
drop your prices or go out of business