Dubai Essay

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Dubai, called by some as a dream in a desert; a gate way between the east and the west. Home to some of the world's tallest and buildings and to the only underwater hotel, Dubai may seem like the embodiment of magnificence, but beneath it's appearance of perfection there lies a dark secret. While Dubai may seem to be in a position of economic bliss, Dubai has been racking up billions of dollars in debt and there is no indication of it slowing down. Even though the United Arab Emirates are in an economic downturn, they still continue to spend vast amounts of money, a habit which will not prove well for the country in the future.
One of the main factors in Dubai acquiring billions of dollars in debt was from the real estate sector. Dubai had been building tons and tons of infrastructure, buildings, malls, and even islands but when the Global Recession hit in 2008 everyone stopped buying. Simeon Kerr, in an interview states that "there are two major drags on the economy... one is the debt burden... and the other is the real estate"("Dubai's Debt Burden"). What Simeon Kerr is saying is that once the global recession hit, everyone stopped buying real estate and when they did they dropped so much in value that the firms, business, and people selling the properties were losing money even if the properties were sold. Robert Worth, in his newspaper article, illustrates just how much the real estate prices dropped by when he says that the real estate prices fell thirty percent and sometimes at an even greater margin ("Laid Off Foreigners Flee as Dubai Spirals Down"). As it can be seen, this gigantic drop in real estate prices caused nearly every real estate firm to lose money. Because of all of this money that was being lost, the ...

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...ties in the world. It is home to the world's tallest building and to the world's largest mall. Unfortunately, Dubai did not get there without consequence. That consequence is the debt burden that they are currently under. As a result of Dubai's insatiable spending they piled up an exorbitant amount of debt and are still paying it off. The outcome of Dubai's debt race could spell the future for many other emerging countries. If Dubai, who at first looked so perfect, is overcome by debt, investors will be less likely to take a risk by investing in a developing country and will instead keep their money where it is safe. But in the end, if Dubai continues to spend it's money instead of paying back its debt there could be severer implications in the future such as a loss of international interest and it could even revert back to the desolate desert it used to be.

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