Dubai’s Tumbling Economy

Dubai is staring at economic collapse these days due to pandemic. One of the most popular destinations is feeling its fall flying like never before. No tourist, no oil money, the pandemic has left Dubai crumbling for cash. If nothing is done most of the Dubai business will shut down over the next 6 months Dubai is famous for the sky-scrapers and artificial archipelagoes, a global home for a freed moment of the trade, people, and money.

A symposium of shopping and lively nightlife is always associated with this iconic city, Dubai. The pandemic has shaken the most resilient dome in the United Arab Emirates. An astounding 70% of businesses in Dubai are expected to shut down in the next 6 months.

Dubai is the least oil-reliant economy in the Gulf but that is no insulation from the ravages of the lockdown. Dubai fuel is Hospitality, Tourism, Entertainment, Property, and retail. Dubai has amongst the busiest international airports in the world with two popular airlines, Emirates and Etihad. Unfortunately, all operations of these airlines are grounded.

The world’s most dominating sky-scraper Burj Khalifa, the Dubai Mall of the Emirates, and the Palm Jumeira even the Dubai Gold Souk, all in bits of despair with businesses shut down in the lockdown. Half of Dubai’s internationally known hotels and restaurants have gone out of the business in the next 6 months alone. 74% of the travel and tourism businesses have downed their shutters. These are the findings of the Dubai Chamber of Commerce and Industries.

Businesses in the UAE are slashing salaries, sending employees on unpaid leaves, and reducing staff. Dubai did allow some of its malls and business to reopen at around 30% capacity, but there were hardly any customers. The UAE is heavily reliant on its 80% on its expatriate population to eat out and shop, most of this rich expatriate including Pakistanis and Indians have left for their home country. Dubai has also announced an economic package of over 4 hundred million dollars, but the oil money is drying up. The pandemic cannot be blamed entirely for the collapse.

Dubai’s hot cake for recent decades is real estate, which is metaphorically trembling to the ground. Residential plots prices are down around 30 % since the 2014 peak. On the commercial site, mostly hotels and restaurant revenue per room are down 25% since 2015.

Last year Dubai economic route was slightly over one percent. The worst since the global financial crisis in 2008, Dubai and its vast web of state-linked industries are facing billions of dollars in looming debt repayments. For the foreseeable future, no oil money, tourism, no foreign funds, and no big real estate deals. The city that seemed glorious under its blinding night lights is today struggling to stay alive.