Dubai a city of the future?

I spent Christmas in Dubai and have been interested in this city ever since I first saw it in 2003 when it embarked on its massive push to become a world city.  Having spent time with my brother-in-law, who lives there, I got an interesting insight into the city.

Despite the credit crunch there is still a great deal of building going on with multiple towers being erected.  None of these are speculative by the developers but have been "pre-sold" to investors.  As such these investors have "parked" money in Dubai.  They are not interested in the normal rates of returns that developers require and they will be happy to have the building half occupied for the short -medium term.  There view is a very long one. 

Who are they?  The beneficiaries of globalism.  Chinese, Emirati, Indians, Greeks, Russians, just about anyone who has more money than knows what to do with. It is just another investment class for them.  Besides a tall building in Dubai is a bit of ego trip for some of these people as well.  Funnily enough London is benefitting from this influx of foreign cash as well.

All it is doing in London is pushing up prices but in Dubai it is still pushing up buildings! 

I was surprised at the fact that Dubai is less "tacky" than I expected.  I suspect this is because the Chic brands and European architects had and still do have a big say in the way it looks and the rulers have allowed them a free hand.  The new hotels are not too gaudy and have a sophisticated feel. 

Why I think the City will succeed.

1. The sheer amount of wealth in the city and its surrounds.  Many people are working in Abu Dabi and living in Dubai as the rents are cheaper and so giving Dubai an advantage
2. Geography.  The new wealth in Sub Saharan Africa and the Indian Subcontinent is nearby and it is the closest "chic/westernish" city to them.  Between the US and China
3.  Infrastructure is quite good, by luck more than judgement, as some of the most ambitious projects were put on hold. ( Travelling around the city is now easy )
4. Big businesses want to be there as it is a gateway to Africa/India and the Arab world.
5. Weather ( sort of ) it can be stinking hot in Summer.  45 degrees
6.  A commitment to tourism.  Egypt has benefitted enormously by investing in this industry.
7.  Build it and they will come  ( Canary Wharf was a ghost town for a decade and now look at it! )




The Challenges it faces

1.  The rise of China could pull more businesses away to Singapore, KL, Hong Kong, Australia,
2. Political instability in the Middle East following tentative steps by the populace against established rulers.
3. Some rules and regulations both religious and political that may put it at a disadvantage against other cities.