A quick look
EICRI BRUSSELS – The situation in the United Arab Emirates, and in particular Dubai is rapidly deteriorating. Lets take a quick look onto the Dubai Stock Exchange to get a better understanding of the situation. The Dubai Financial Market General Index (DFMGI) dropped last year by almost 30% compared to Q1 2018, the largest decline ever. Nearly all the issues are declining at the moment while volume fell by more than half.
As it is, Dubai and Abu Dhabi are already the most expensive cities to live in the Arab world, according to Mercer’s 2017 Cost of Living Survey.
The Dubai 2020 EXPO
The downward spiral is the result of different causes which affect each other negatively. The Qatar blockade is playing a key role in the Dubai crisis: the animosity against Iran is another major source of the problems due to the many influences Iranians have in the emirate of Dubai.
The Dubai 2020 EXPO is creating a new huge problem, especially when the 2020 EXPO is over. Construction companies like EMAAR and Damac Properties are engaged in an extreme race to finish hundreds of construction projects to prepare for the EXPO: a large portion of the real-estate will remain empty after the EXPO.
Dubai construction projects on hold
Several projects have even been stalled or stopped due to the crisis.
The real-estate market in Dubai is going through its hardest period ever. More construction projects are on hold due to the lack of potential buyers, as the Emirates is now heading towards an uncertain time.
More people leaving than arriving
For the first time in history, more people are leaving the Emirates than arriving. A partial cause can be found in the implementation of the new, IMF-backed VAT regulations.
Salary backlash
One of the biggest drawbacks that is turning the Dubai and most of the other Emirates into a further decline is the freezing of paychecks to the lower- and middleclass workers.
Complaints of employees all over the UAE are raining down back home: from the Netherlands to Pakistan, and from Belgium to the UK.
The end of the situation in the UAE is not in sight, and will probably deteriorate even further.
