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5 Reasons Why Dubai Is Crumbling

Rich Countries
5 Reasons Why Dubai Is Crumbling

To most people, Dubai represents everything we’ve been told our whole lives that we should want – wealth, exorbitance, sun, sand, water, tall buildings, opulence, luxury and beauty. Technically the city shouldn’t really even exist, what with it being constructed in the middle of the desert and all, but it’s a living testament to the persistence and creativity of our fair species – that we can achieve anything if we put our minds to it.

Dubai formally came to life on June 9th 1833 when a gentleman by the name of Sheikh Maktoum bin Butti Al-Maktoum convinced just short of 1000 members of his tribe to move on down to the Dubai Creek. The imperialist tendencies got the best of the United Kingdom, who agreed to protect the Sheikhdom in 1892, and in 1971 Dubai officially joined the United Arab Emirates alongside the capital Abu Dhabi, Ajman, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain. At the time, it was still not a lot more than a village surrounded by sand – the discovery of oil is largely responsible for the Dubai we know today. Over the last 40 years or so, the city has exploded – with skyscrapers, humongous shopping malls, the world’s tallest building (the Burj Khalifa), man-made islands and hotels.

But there’s a dark side to this shiny, flashy settlement. Dubai has an extraordinarily shady past (and present) that is much lesser known than it should be. It’s not quite the glimmering oasis in the desert that most folks believe that it is; for some, that couldn’t be further from the truth.

5. Slave Labor – Hundreds of thousands of workers live in slave-like conditions

05 Slave Labour - Dubai

The Sheikh is predominantly credited for building the city, but in reality there’s a sizable underclass of literally hundreds of thousands of South East Asian (re: Bangladeshi and Indian) workers who did all the heavy lifting. These men are lured to the jewel of the UAE with lofty promises of a great monthly pay working 9 to 5 on construction sites, receiving fantastic accommodation and meals, and treated like kings. This, of course, is nothing short of a blatant lie. The moment these men step foot off the plane, their employers confiscate their passports so they can’t leave, they’re forced to work 14 hour days in the intense desert heat – when tourists are advised not to stay outside for more than 5 minutes – for less than one quarter of the promised wage. It takes them years to save enough money for their ticket out of there, all the while they live in squalor with families back home patiently waiting for funds that will never arrive.

On top of all this stress, even if the workers manage to obtain the cash to get back home, they won’t be able to pay the huge debts from the loan sharks that they took in order to get to Dubai in the first place. They will then be sent to jail and their parents and families inherit all the debt – so the incredible numbers of suicides in these camps are fairly understandable.

4. Heavy debt – There is no such thing as ‘bankruptcy’

Dubai Attempts To Reassure Investors Over Debt Default

In Dubai, you pay your debts or you go to jail. A recent article in The Independent told the story of Karen and Daniel Andrews, Canadians who moved to Dubai when Mr. Andrews fielded a job offer in the UAE. Karen was initially hesitant to make the move, but she was in love so she followed her man. After settling in to the lifestyle of exorbitance and servants, they both began to be ‘drunk on Dubai’. Daniel was unfortunately diagnosed with a brain tumor and he made a few key mistakes managing their finances, landing them in a small amount debt. When they decided to leave, Daniel quit his job and he was given a lower payout than originally promised (sound familiar?). There’s a strange rule in Dubai where when you leave your job, the employer must notify the bank – if there is any outstanding debt, all your accounts are frozen. This is exactly what happens to the Andrews’. Their credit cards stopped working, they were evicted from their apartment and Daniel was sent to jail. Karen now lives in their Range Rover while she waits for Daniel to complete his agonizingly long nine-month stint behind bars – she can’t legally work so she’s essentially stuck.

3. Servant class – There is a women’s hostel filled with escaped maids

03 Servants - Dubai

You couldn’t make this up. Just like the workers in South East Asia who are tricked into moving to the UAE for a better life, the predominantly Filipino and Ethiopian populations of maids suffer the same terrible fate. Their passports are confiscated immediately, as with the workers, they technically don’t ever have to be paid, they don’t get breaks, and it’s commonly known that the employer has ‘absolute power’ over their servants – and whenever the term ‘absolute power’ is brought into a situation, it rarely results in anything positive.

Because of this regular abuse of human rights, a lone filthy hostel somewhere on the outskirts of the city is filled with maids and servants who have escaped their ‘masters’ and are seeking refuge until they can find a way back to their home country. These women have been beaten, disrespected and treated worst than some animals. If a Filipina visitor or non-servant is walking alone in a shopping mall, she is likely to be approached by a frightened maid desperately pleading for help. At least the workers have their small but regular income to slowly put away for a ticket home – these women have much less to rely on, no real method of communication, no income and no real hope of escape.

2. Hydration – There is no naturally occurring usable water in the city. Anywhere.

02 Water - Dubai

When you mess with the desert, you generally lose. Nature is awfully persistent. And Dubai is just that – desert. Humans have tried to tame Mother Nature throughout history, as we have a tendency to do, and in Dubai thus far we’re winning. Fake islands, fake lawns, fake ski fields, fake beaches – none of these occur in nature in the UAE, so the Emratis created them. The Tiger Woods Golf Course requires four million gallons of water per day – that’s right, per day – just to keep it from going brown and disappearing. Dubai has some of the lowest rainfall on the planet, which doesn’t help either. The drinkable water comes from a number of desalination plants around the city, which therefore makes it extremely expensive H2O. In fact, it’s the most expensive water on earth, and residents of Dubai have the largest average carbon footprint of any human being; even bigger than Americans.

All of these facts should be enough of a warning that if there ever was a recession in the UAE, Dubai itself wouldn’t be sustainable. There’s very little water storage in the city, making it super vulnerable to any attacks or even something as simple as rising sea levels. Speaking of the sea – the beaches, something for which Dubai is famous, are slowly being polluted due to sewerage treatment plants not being able to keep up with the immense population growth. The ‘solution’ was to dump the waste in manholes, which then ended up in the sea, ruining the very attraction for which most tourists visit the city. They definitely leave that information out of the brochures.

1. Economics – The national debt is as much as the GDP

01 Economics - Dubai

This can never be a good thing. The IMF estimates that the Gross Domestic Product of Dubai is around the same figure as the amount owing by government and related entities – $130 billion. There are three government-related holding companies that control the housing market in Dubai, and developers have amassed significant amounts of debt in order to grow the city. However with immense growth comes stagnation – when there’s too much of a good thing, people lose interest. And that’s exactly what happened in Dubai. The property bubble burst in 2009 and it’s been slowly recovering since, and the fact that a government-controlled entity couldn’t repay its’ debts would have brought down the entire city. Add the dwindling oil supply to the mix and it’s not too surprising.

A recent article by The Economist suggests that Dubai might need to ‘change its growth model’, as previously it grew by drawing in capital, ideas, people and resources. The other issue is only 10% of Dubai’s working age population are Emratis (Dubai nationals), the rest being expats who often aren’t attached to the city permanently. With most residents in a state of transition who rarely have any plans of permanence for the city, there’s little incentive for most folks to really put their all into making Dubai a fantastic place to raise a family. Rather it operates in a manner similar to a slightly more classy Las Vegas. These factors, along with the fact that entrepreneurs who fail will go to jail (rather than go bankrupt and start again – textbook capitalism), all add up to a problematic city with potential to be great again.

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