Just when I thought that sober heads were beginning to prevail, The Times once again plumbs the depths of journalism with a truly daft article about Dubai. The headline in the print edition?
Bursting of the bubble leaves life in broken city state feeling like the last days of Rome
(…) Welcome to the modern equivalent of the last days of Rome. The failure of Dubai World, one of the Emirate’s flagship companies, to honour a debt due last month has rocked this city state to its foundations. By any conventional logic Dubai is now a busted flush.
This came as news to me I must say. I was blissfully unaware that Dubai was under threat from Germanic hordes to the North, or that we have developed a dangerous reliance on Barbarian mercenaries. I was also ignorant of the fact that the Roman Empire was so fatally undermined by the debts of its quasi-governmental investment company, Rome Universitas.
The article begins with yet another of those smug and self-congratulatory ‘word-pictures’ that seem to be mandatory when writing about Dubai. They don’t reach the pretentious depths of Johann (who could?), but it’s still fluff designed to mask the fact that there is no effective and coherent argument being made.
Superficially there has been no change to life here in the days since the failure to pay up triggered financial carnage but nowhere does superficial as convincingly as Dubai.
Let’s deconstruct this argument: we looked around and couldn’t really find any telling evidence that what happened the other week actually really changed anything. But Dubai is superficial and therefore what appears to be the case is not the case! Therefore, Dubai is about to collapse. QED
Gold star chaps, really impressive stuff.
The article then tries to support their claims with an expat case study and a few real estate related facts. I don’t deny that a lot of people got hit by the real estate or that this sector is going to take a long time to recover, but the market plunge began well over a year ago and has actually started to stabilise, so it hardly falls into the realm of news and predates the Dubai World situation. It does not support their notion that the Dubai World default has ‘rocked the city to its very foundations’, but is more indicative of the fact that the Dubai World default is actually a lagging indicator of the real estate crash and global credit crunch that are working themselves through. Their argument falls into the same trap as so many other journalists: the assumption that the Dubai economy consisted purely of real estate. What they fail to recognise is that the real estate boom was a very recent (albeit dramatic) phenomenon and that the city also serves as a trading, transport and commercial hub for the entire region. While the real estate boom attracted all the headlines, it was actually a negative and distorting influence on the traditional basis of the economy that undermined Dubai’s competitiveness. In the long run, the falling cost structures may actually make the city more attractive as a regional hub when compared to potential rivals.
What else do they offer in support of the claim that Dubai is about to be looted by Visigoths?
The borrowed money has not just gone on property. A state-of-the-art metro train system, operated by Serco, opened amid much fanfare in September at a cost of $7.6 billion. At 9.30am on a Thursday the station at Dubai airport’s cavernous Terminal 3 is empty. The train into the city, capable of carrying more than 640 people, has 21 on board.
I wonder why they don’t mention anything about Terminal 3 itself? Might it be because it was busy and this wouldn’t fit the decline and fall theme? Usage of the metro station at the airport has been very low because of the bizarre restrictions placed on carrying luggage. Given that they went to the Mall of the Emirates, it’s odd that they don’t the mention the extremely busy metro station there, or take the time to google ‘dubai metro stats’ to get more meaningful information. Then again, that would be proper journalism I suppose.
Anyway, must go. There’s a chap called Alaric at the front door and he’s got some friends with him.