Recession in Dubai 2008 Research Paper Example | Topics and Well Written Essays - 750 words

Recession in Dubai 2008 - Research Paper Example The average economic growth rate of the UAE economy between 2000 and 2007 was 7%. The economy is heavily reliant on petroleum and property investments (World Economic Forum, par 1). In particular, Dubai of the other emirates of the UAE was hit hardest. This is because the state (emirate) of Dubai is not as much endowed with oil resources as her sister emirates (Prasadjain, par 6). For this reason the state is left to attract foreign investment, partly in banking, construction and the real estate. It is the combination of these economic-supportive structures that the turmoil was founded in Dubai. Overall, Dubai came out heavily bruised by the crisis. Saif and Chucair (pp 3) argue that the UAE was not cautious enough so as to set up a ceiling for speculative investments that would in the end throw its banking system in disarray. In their view, Saif and Choucair (pp 3) this failure to caution the economy from the aforementioned investments led to serious problems in trying to deflate the growing property bubble. The onset of this situation meant a collapse of several foreign investment companies. To further complicate the situation, the UAE government failed in guaranteeing equitable working conditions for both local and foreign workers. The working conditions for foreigners, most of who worked for foreign companies that brought in substantial capital inflow turned for the worse, deplorable in the words of Saif and Churcair (pg 4). This was a major catalyst for an across-market shrug among these companies. A major walk out was imminent at this point, but the government was clever enough to secure the interests of its citizenry by placing them ahead of the foreign investors. This left these companies, which were initially troubled by failing prospects in their home countries, very little space to further influence events in the country. While foreign investment