The illustrious growth in Dubai over the past decade has been one filled with industry and development, but also one with whimsy and fanciful buildings being constructed alongside islands shaped like palm fronds. Though originally just another oil-powered fixture in the Persian Gulf arena, the recent expansion was funded only partly by petroleum. The opulent hotels and rapid rise of business centers saw this city in the United Arab Emirates garner interest from both high-dollar corporations and jet-setting vacationers alike.
Yet, with the recent recession, funding for projects became overambitious and the new urban metropolis found itself deep in debt, with some estimates as high as $80 billion, according to the Wall Street Journal. This led to further panic and contraction, ceasing all current development and causing most construction to halt completely. Thus, the call for bailouts began to rise as foreign investors saw their profits sink slowly off the figurative shore of promise in the Middle East.
While the national government was able to absorb some of the debt through the re-acquisition of bonds, the main realm of support fell with Abu Dhabi, a neighboring, oil-rich city. Through the provisions of between $5 billion and $10 billion, the various business endeavors in Dubai now at least have a base to attempt economic recovery. With the opening of the world’s tallest building, the Burj Dubai Skyscraper, local businessmen and the local ruler, Sheikh Mohammed, have found circumstance to look into the future optimistically.
The solution seems the most ominous concern. By relying on the oil wealth of Abu Dhabi, Dubai has once again indicated how prominent the need for oil is in the financial sphere. This is evident not only in the Middle East, where the members of the Organization of the Petroleum Exporting Countries enjoy wealthy government positions, but also in potential foreign threats such as Iran, Venezuela and Russia. While these countries are known for their typically non-supportive views of the United States’ policy, the greater danger lies in other countries, underdeveloped ones, which depend on this revenue.
By relying upon this revenue, a dangerous precedent is set where accountability is not considered and the future is ignored. Dubai was a great example on how industry and constructive development could provide for a positive market and business place. Now, certainly the surrounding wealth was helpful when beginning such an enterprise, but it sustained itself and, if it was not for the world’s economic crisis, the enterprise would have probably continued to flourish. States continue to base their own developments on oil, or rely on the wealth of others who have accumulated their riches by such means.
Such reliance unnecessarily empowers those who make these provisions to other countries and provides them with a false sense of secure establishment. This will lead to more powerful negative actors on the world platform and will result in eventual crumbling and collapse. Instead, countries should look within themselves to moderate growth. Financial support should be regional but should not rely fully on one nation whose own potential downfall could have a resultant chain reaction. By examining the bailout methods so far and considering the future, one must look with certainty at the follies that have been committed and refuse to embrace them again.
Matt Boaz is a senior political science major from Edmond, Okla.
