Saturday, February 20, 2010

Downward Sprial

Dubai's economy is one of the most unique and unusual in the world. It is an entrepot (free port), and there are no taxes on imported goods. It is also a free trade zone, which allows 100 percent foreign ownership and sales. The companies earnings and private income are exempt from any form of taxation. Because if this it is home to many companies such as Arabia, Cisco, Compaq, Hewlett Packard, IBM, Microsoft, and Oracle.

90 percent of Dubai's population is foreign workers. Because of the financial crisis Dubai is now facing, many of the foreign workers are being laid off and having to leave the country. People here are losing their work visas and then they most leave the country with in a month.A local newspaper in Dubai reported that the government was cancelling 1,500 work visas every day. Many of the foreigners are fleeing Dubai, and they could be imprisoned if they failed to pay their bills before they fled. Right now Dubai's economy is in free fall, creating many vacant houses and lowered real estate prices. Loads of Dubai's major construction projects have either been suspended or cancelled.

Dubai's government has been unwilling to provide any data about their suffering economy. They are trying to create a media law where it would be a crime to damage the country's reputation or economy, punishable by fines of up to 1 million Dirham's ($272,000). Dubai was once hailed the economic superpower of the Middle East, but if things continue the way they are going it will end up ghost town.

No comments:

Post a Comment