U.S. policymakers and consumers have committed one of the few unforgivable sins in this desert boom town: They've slowed the building down.Emphasis added. Hmmm. Is the pressure for revaluation that the Central Bank is feeling political pressure from Dubai?
"We don't want the United States to fail, but we don't want to go under with them," said Yasar Narrar, a strategy adviser to the executive office of the ruler of Dubai, Sheik Mohammed bin Rashid al-Maktum. Dubai is one of seven states in the United Arab Emirates.
Last month, the Emirates became one of the first Arab countries in the Persian Gulf to declare the dollar's fall a crisis. Local currencies' peg to the dollar was hindering growth and squandering the opportunities presented by $99-a-barrel oil, said Sultan Nasser al-Suweidi, the governor of the Emirates' central bank.
...
As recently as last month, some construction workers on the Burj Dubai and other projects made the equivalent of as little as $109 a month. Back home in India, where the dollar has fallen 14 percent against the rupee in the past 18 months, remittances that workers here sent to their families steadily lost value.
"I work here, and I can't save anything. I'll ruin my family," said Ram Chandra, 33, a mason from the north Indian state of Rajasthan.
...
"Every time I telephone my family, they say, 'Cancel your visa and come home,' " Chandra said. All the workers in the room said they planned to do so.
...
"It's far more attractive for them . . . to be living in their home country and making the same wages and living far more cheaply," said Tom Barry, general manager for Arabtec, one of the lead construction contractors for the Burj Dubai.
The article doesn't mention that Dubai Inc. holds large dollar-denominated investments in the US.
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11 comments:
I am sure, no one holds a gun to labourers heads and forces them to come to Dubai.........
Definitely, it doesn't make sense to become an expat worker if you can get the same wages in your home town and country.
It's difficult to figure out the position of Washington Post, as it doesn't make a lot of sense.
Last week only 2 major universities and a huge law firm from the US reported openings in Dubai. And that's according my personal records .......
In general, since 2004 we are witnessing major moves from North America, in particular towards Dubai.
I personally, find the propaganda of the Washigtonpost ill motivated. Therefore have reached the conclusion to dismiss 70-80% of their information about Dubai, as not well researched, definitely lacking local knowledge and opinions.
The Bahrini finance minster today: "No revaluation any time soon."
It's not a matter of what Dubai thinks, it has to be a collective decision by all the GCC members. Remember that they are moving toward a unified currency by 2010.
Editor: you miss the point. Many labourers have incurred huge debts to unscrupulous agents to get them work in Dubai. When they arrive, they discover that the salaries are nothing like what they were promised. But the agents retain their passports until the debt is repaid (illegal, we know, but still a very widespread practice). So it's not exactly a gun to the head, but it is very close. The situations of college professors and labourers are obviously very different, but in both caases the plummeting dollar is a major problem - as it was for me nd it was a strong factor in my decision to leave.
I think that the UAE will de-pegg from the US Dollar from January 1, 2008. All signs are there:
http://www.dubaichronicle.com/2007/11/central-bank-issues-aed-usd-and-euro.html
http://www.dubaichronicle.com/2007/12/gulf-common-market.html
http://www.dubaichronicle.com/search/label/Money
http://images.moneyandmarkets.com/766/75927.html
editor:
About that last link; why are you posting what looks very much like a spam/scam website?
The Burj Dubai is going to do amazing things for Dubai. It will prove a true icon. It will be a catalyst for huge growth in the dubai property market.
I just hope the weak US dollar doesn't cause any *real* problems for the project.
It looks to me like the ministers sat together and agreed to publicly announce that there will be no changes made. It also looks like they have already decided on what and when to implement changes. I suppose the element of surprise in the name of market stability is what they are after. Not sure if this is going to do any good.. but what do I know?
The Washington Post and other American publications treat Dubai and the Middle East in general with great suspicion. It is interesting how ungrateful they are for Abu Dhabi's bail out of the Citigroup. Naturally, the bail out was not a charity.. but aren't those the very foundations on which American capitalism is based on? Why are they freaking out and worrying? Let the Arabs own your financial institutes.. so what? You own their oil.
Mix it up! It is sad to see this kind of outlook towards Arabs when they are the ones who are opposing a dramatic demise of the American economy (e.g. Saudi stopping attempts by Chavez and Ahmedinijad (sp?) to drop the USD in oil sales).. I mean, seriously.. WTF?
The more co-dependent we become on each other, the less likely we are going to be biting each others' heads off.. so, mix it up.. let everyone own everything and realize that this is, indeed, a global economy.
Dubai Entrepreneur, I couldn't agree more.
Steven Covey used to call that 'interdepndence'. But then you need mutual trust and respect for this to be fruitful. The gulf arabs are depositing heavily in the 'favor' bank account of the Americans, despite the patronizing tone of the western press,.let's hope they get rewarded,
It's crazy, the price variance in DXB and NYC - I bought a
T-shirt for $12, my brother bought the same at Dhs80 in DXB.
Bahrain to adopt basket of currencies
http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2007/December/business_December314.xml§ion=business&col=
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