18 January 2006

Towering thoughts

So, J had coffee with a friend of hers the other day, and invariably the subject got around to all the Dubai construction, and who was going to live in all these tower blocks that are beanstalking out of the ground.

Her friend, who always knows the latest local scandals and gossip in the property arena, had this theory which had been told to him – and it sounds quite plausible.

Before the latest Gulf War in Iraq started, there was a huge building boom in Jordan with lots of residences being built. Local Jordanians wondered who would live there too.

Then the US invaded Iraq.

All the wealthy and able Iraqis fled their country to Jordan – snapping up homes and apartments.

Rumour has it that a lot of gulf countries would not loudly oppose an intervention in Iran, and if this happens, then more than a few Iranians would also be leaving home.

What could be better than a short flight across the ditch to Dubai? On a clear day, you would swear that you could see the homeland from your 50th floor apartment.

I still reckon that they’ll only fill up 5 towers at the most.


moryarti said...

That’s a very intriguing theory, yet realistic in a very very scary way

(((dXb))) said...

Petrifying thought! 'hope it's not going to be true.

But, if there's gonna be a war in Iran, don't you think a lot of people would be scared and leave Dubai.

kaya said...

That may also explain why Iranians have invest 1.3 BILLIOn dirhams no less in the local business market.
Oh well! More chelo kabab,sabzi pilao, Aghas and Khanums to go around.
Although what is scarier is that the ones running here will be the sans "chaddor" lot.
I lived in Iran from 1971 - 1979.
What Dubai is today Iran was 25 years ago.
But see what happened to them.

nzm said...

Moryarti - yeah - it does get you thinking a bit, doesn't it?

(((dxb))) - sure, there'll be people leaving the area out of concern. J actually moved to Dubai around the same time that this latest Gulf War started in Iraq. She had a lot of people questioning her sanity!

kaya - it would appear that every gulf state is throwing money into Dubai - it's just a question of which one is going to be the first to come knocking to reclaim it back if it all starts to go wrong here!

I confess to having googled to find out the meaning of chaddor! Why are the ones that don't wear it more scary? Do they more "airs and graces" than the rest of them?


CG said...

!اونها دارن صداتو میشنون. فرار کن

nzm said...

ah c'mon CG - you just can't write that and not explain what you mean!



moryarti said...

was that فارسي؟ :)

nzm said...

you guys are being mean to the monolanguage blogger!


moryarti said...

lol - i was asking CG if what she wrote was persian? :)

nzm said...

that's ok then!

it's all looks Dutch to me! lol

CG said...

yes farsi moryarti. figure it out...comon

nzm said...

CG and Moryarti

You two just keep chatting without me - pretend I'm not here!!


moryarti said...

I think the chat is about you NZM .. better call one of my Iranian friends to decipher what CG is saying :)

nzm said...

While you do that, I'll try hard to restrain my paranoia!


BD said...

I just read today from Khaleej Times online about all the money that Iranians are supposed to have invested in Dubai. If my memory serves me right, the article said something like $200 billion. The article talked about how Dubai benefits from troubles in the neighborhood. So, even without a war in Iran, seems many wealthy Iranians have already decided on Dubai. And why not! They have about as much oil money as the Saudi's and others in the Gulf.

As to whether Dubai's phenomenal development today is like Iran's, Jordan's, Lebanon's or any other place in the recent past, I think these comparisons are not nearly of the same scale. I would suggest the building boom in Dubai is unlike anything the world has seen since New York City in the 1920's and early 30's. That has left a legacy in New York that continues some 80-90 years later... uaxqnwnn

nzm said...

The building boom in New York was then followed by the Great Depression and the Wall Street crash in 1929.

Let's hope that Dubai does not too closely follow the NY model!

Krishna said...

Dubai property market will go down in the years to come. However, Unlike the NY in 1920's, global economy will not let it crash. In recent histroy, the closest boom in real estate this size comes from of Singapore and HK.(And to some extent the building boom of southeast asia, through not limited to one city). Most of the property market in UAE, infact more than 80%, is in the hands of selected few, making such a crash very unlikely. Unlike the liquidity problems of southeast asian crisis in the year 1997 when global money flowed out of the nations almost at once, high oil prices will cushian any rapid outflow of money. Considering that most of the budget plans for these investments were make keeping in mind of oil at 35$ per barrel, UAE and broader middle east has plenty of money.

nzm said...

Hi Krishna

welcome to our blog!

Agree with your comments re the oil sustaining the economy, and it's great that it can do this - for now.

What needs to happen however, is that the economy needs to sustain itself for that inevitable day when the oil reserves start to dwindle.

Sheikh Zayed's (together with Sheikhs Rashid, Maktoum and Mohammed) vision and foresight was to create the free zones and tourism to plug the gap that the lack of oil would one day make in the UAE economy.

But the growth needs to be controlled - and that's where the issues lie. These grandiose schemes can all be built with oil money investments, but in the future they need to be maintained and upkept with revenue and income.

So far, there's a huge gap between the amount of investment monies and the amount of revenue (ROI) being generated.

God forbid that global economy has any play in the UAE. The only reasons why the rest of the world would prop up a country's failing economy would be in exchange for something of value - i.e. natural resources (think Indonesia, India, South Africa, South America - thousands of countries in this world that have had their natural resources asset-stripped by the super powers).

If the oil supplies start to dwindle, you can bet that the US and UK would be back into the UAE like robbers' dogs. Publicly giving out of the one hand, and covertly taking more with the other.

But if the oil supplies run out before then, there'll be no intervention by the rest of the world, as there won't be anything of value for them to take from here.

It's up to the rulers and developers of the UAE to regulate the growth so that it remains controllable and sustainable.

At the moment, it's like a big kindergarten sandpit, and the boys with the most toys are building the biggest and best sandcastles.

There's nothing wrong with vision - I love that they have the freedom and money to be able to do these things. But they also have to be mature enough to understand that all these projects have to stand on their own merit, be successful and profitable.

Only then will the longterm foreign investors (outside the GCC) be attracted into the region, and feel secure enough to risk their money.

Just my 0.02!