The financial storm washes up in the PG
Monday, December 1, 2008 at 1:36AM MIDDLE EAST AND AFRICA: "Dubai: Not-so-hot property; Is Dubai being hit by the turmoil?" The Economist, 11 October 2008.
ARTICLE: "Financial Storm Hits Gulf: Speculative Currency Trades Plunge Kuwait Into Bank Bailout," by Margaret Coker and Chip Cummins, Wall Street Journal, 27 October 2008.
ARTICLE: "Slowdown in Persian Gulf Reverberates in Middle East: Region Tethered To Oil Economies," by Michael Slackman, New York Times, 29 October 2008.
ARTICLE: "Emirates See Fiscal Crisis As Chance to Save Culture," by Michael Slackman, New York Times, 12 November 2008.
While that cool WSJ map of a while back did a neat outline of the Gap in terms of where the financial contagion spread, the slowdown in demand and the retrenchment of capital naturally changes everything for everyone eventually.
And so the storm comes to the Gulf's key connectors in the UAE, including even smallish-oil-power Dubai, where the dynamic is more familiar to us: 80% rise in property value since early last year (how sustainable is that?)
Dubai has pulled that off for two reasons: access to cheap capital in the West and a continuing influx of foreign workers. But as the former retrenches, there are plenty in the UAE who seek utility in curtailing the latter--as in, they want to retain their cultural identity and maybe a breather like this can be a very good thing.
A lesson there for us all: globalization has been moving so fast over the past two decades, that a pause or even just a slowdown in its advance is not a bad thing-if the right adjustments are made and the right lessons learned.
The problem is, a slowdown in the Gulf equates to a crash for all the local non-oil dependents like Egypt and Jordan.
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