Few places over the past decade have offered such scope for accumulating wealth and living luxuriously than Dubai.
A tax system formulated almost entirely in accordance with the needs of business – ie, taxes are negligible – and a high standard of living has seen contractors, entrepreneurs and businesses move to the United Arab Emirates’ economic fulcrum in droves.
Dubai, which is home to the region’s largest seaport and airport, leapfrogged London as the number one city in the world for foreign direct investment in 2008.
However, the global slowdown has slammed the brakes on this Middle Eastern juggernaut, sending its stock market and property prices plunging.
For now, opportunities for Western expats have been severely curtailed.
Until now the Gulf city-state has been the fastest growing city on the planet, and has been transformed from a desert village to a glittering metropolis in only 20 years.
People come to make money and live a luxurious life in the sun – an aspiration common to all mankind, so no surprise that people come from all corners of the world
The scale of its ambition, which has spawned man-made islands, the world’s largest man-made marina and its tallest building, has often been breathtaking.
Naturally, the most ambitious place on Earth has attracted the most ambitious people.
People come to Dubai, above all else, to make money and live a luxurious life in the sun – an aspiration common to all mankind, so it’s no surprise that people from come from all corners of the world.
The British contingent comprises 100,000 expats and 200 UK companies.
Only 20% of the 1.5 million inhabitants are indigenous Arabs.
Boom and bust
Such has been the influx and economic development that new buildings have sprung up at bewildering speed.
The Dubai skyline has changed constantly as grandiose skyscrapers jostle to outdo each other for size and, often, grandiosity.
At the height of the boom it was estimated that a quarter of the world’s construction cranes were located in the emirate.
Inevitably, though, the worst global recession since World War II has hit the construction sector hard, leaving swathes of real estate unoccupied and surplus to requirements.
Half of the city-state’s construction projects, totalling £400bn, have been put on hold or cancelled, including a Donald Trump tower, a $100bn resort complex by the beach, four theme parks and an artificial island.
Luxury hotels and other tourism-related businesses are struggling.
The stock market here has plunged 70% from 2005 levels, and banks, as elsewhere, have pulled the purse strings tight.
Dubai’s boom has been as dependent on debt as anywhere, and is reputed to have the world’s biggest per-capita debt.
Oil-rich Abu Dhabi recently bailed out its chastened neighbour to the tune of $10bn.
And yet, defaulting on debt or bouncing a cheque are seen as criminal offences, and many Britons, redundant and indebted, are now absconding.
Some observers believe Abu Dhabi, which opted for more controlled growth, will eventually overtake its more impatient neighbour.
But Dubai, whose oil reserves are meagre compared to Abu Dhabi, hasn’t been left entirely at the mercy of oil and property prices.
Setting up
The oil revenues which initially powered its explosive growth now only account for 10% of an increasingly diverse economy.
Dubai was the first emirate with a stock exchange and is a major player in finance, IT, legal services, manufacturing services, property, leisure, hospitality and other tourism-related industries.
