Not oil, but tourism, real estate and finances are the backbone of Dubai's wealth, which is the second largest emirate in the United Arab Emirates after Abu Dhabi. Revenues from petroleum and natural gas contribute less than 6% (2006) of Dubai's $ 37 billion economy (2005).
The construction boom from the last years stopped and the megalomaniac projects (the last one, Burj Dubai, the Earth's tallest building that suppose to be finished in September) show signs of depression. The global economic crisis has an effect on Dubai and the world media started to publish more and more pessimistic reports about the "jewel of the Middle East."
According to Dubai Department of Tourism and Commerce Marketing in the first quarter of 2009 occupancy rates in Dubai hotels fell to 73%. Dubai real estate prices have dropped 32 percent, 40 percent in the last quarter (Knight Frank Global House Price Index). This is the biggest drop in real estate prices in the world today. The financial situation of the city is not better, this year the conservative, oil rich Abu Dhabi was forced to bail out his speculative heavily-indebted neighbor with $10 billion in bond purchases.
After all these facts, biting remarks such as those of Andrew Critchlow from WSJ who wrote that "in the desert, green shoots often turn out to be mirages," (Dubai's Economic Woes Just Got Worse) are already taken seriously.
In February Paul Lewis, the correspondent of British newspaper Guardian in Dubai, wrote: "A six-year boom that turned sand dunes into a glittering metropolis, creating the world's tallest building, its biggest shopping mall and, some say, a shrine to unbridled capitalism, is grinding to a halt. Banks have stopped lending and the stock market has plunged 70%. Scrape beneath the surface of the fashion parades and VIP parties, and the evidence of economic slowdown are obvious. Luxury hotels are three-quarters empty. Shopkeepers in newly-built malls are reporting a drop in sales. In Dubai you expect to see a Ferrari parked beside a Rolls-Royce. But not, as is the case now, with scruffy For Sale signs taped to the windows." (Dubai's six-year building boom grinds to halt as financial crisis takes hold)
In the last issue of Harper's magazine Negar Azimi is sniffing around the city for evidences of decline. In his report "Dubai is for flamingos," (Harper's, June, 2009) he is convinced that the city is in big trouble. Construction work in many sites is terminated, many projects are in halt, and dark rumors float in the air. Azimi tries to wring out an oral confession about the existence of troubles from the residents, businessmen, and government officials, but without success. People in Dubai are alarmed, but still confident.
Azimi calls Dubai a secretive society and decorates his suspicions of the coming doom with quotes: "[ Dubai ] is a festival of egoism with humanity denied. [But] the towers of Dubai will become casualties not of human greed, but of architectural folly. Their lifts and services, expensive to maintain, will collapse. Their colossal facades will shed glass. Sand will drift round their trunkless legs. Animals will inhabit their basements." (As they did Ozymandias, the dunes will reclaim the soaring folly of Dubai, Simon Jenkins, The Guardian)
Yet, Azimi is not able to draw the same terrifying picture in his report. Instead, he offers a symbolic (and laconical) picture of a few, unhappy, orphaned flamingos, taken under quarantine at Dubai International Airport, because their final destination, The Lagoons (70 million square foot development of residences, shopping centers, and offices) has been put "on hold" for indefinite time.