All that glisters…

Dubais visionary ruler is determined to keep smiling amid the gloom....

THE new metro in Dubai,the glitziest but most heavily indebted of the seven statelets making up the United Arab Emirates (UAE),is not the worlds biggest,fastest or costliest. But even in these straitened times,the city-state has rolled out this latest bauble with its usual flair. In flowing robes,amid laser lights and red carpets,Sheikh Mohammed al-Maktoum,Dubais ruler,launched the inaugural service on the auspicious date of 9/9/2009.

Built by a Japanese consortium in just four years,the driverless systems first line comes complete with sleekly futuristic air-conditioned stations,leather seating for first-class passengers and carriages specially designated for women. The Arabian peninsulas first urban railway looks swell,it may unclog the roads and should be a welcome convenience to the ordinary folk who cater to Dubais plushily motorised elite.

And yet Dubais economy is still stalled on the tracks. Though the cost of commercial rents has fallen by half since the start of the year,nearly a quarter of Dubais office space is empty. A third of all building projects are reckoned to be frozen,yet so much new space is still coming on to the market that the glut may persist well into next year. The general slump,after years of breakneck growth and soaring prices,has spread its poison through the economy. A survey in a local magazine finds that workers across the UAE this year have taken salary cuts of 26-30 per cent.

Story continues below this ad

Sheikh Mohammed recently likened his realms troubles to the headwinds slowing down an aircraft. Insisting that those winds were now blowing less fiercely,he dismissed worries about government debts,which are estimated to total anything between $80 billion and $120 billion (equal to 100-150 per cent of GDP). Dubais intricate web of parastatal corporations controlled by the Maktoums may indeed find the cash to tide them over.

There is plenty of it still sloshing around. Where else would a government think of selling seat-belts with designer labels to promote road safety? The friendly neighbouring emirate of Abu Dhabi,which has been bailing Dubai out,is still flush with petrodollars. And Dubai still draws customers by being a pleasanter place than other Gulf destinations. Yet even Sheikh Mohammed,whose ambition has inspired Dubais furious drive for superlatives,says he will now be more careful.

As for the metro,it is debatable whether the $7.6 billion investment will make a profit even after more of it becomes operational in five years. Dubais rapid-transit authority says it could cut traffic by 17 per cent,and slash losses due to delays. But how many of Dubais 1.6m people will give up their 1m air-conditioned cars to walk even short distances in the punishing summer heat? At any rate,the sheikh can console himself with the knowledge that the metro will be the worlds biggest computer-operated train system,and its Union Station will have the worlds biggest underground railway concourse.

© The EconomistNewspaper Limited 2009

Tags:
Dubai

The police said that Kumar, a resident of Turbhe MIDC in Navi Mumbai, was driving his concrete mixer truck when it collided with an SUV.

‘Unleashed aggressive dog to stop probe’: Sacked IAS officer Puja Khedkar’s mother booked

Cities1 hr ago

The mother of a dismissed IAS officer, Manorama Khedkar, has been booked by the police for obstructing an investigation and aiding suspects involved in a road rage incident. The incident occurred on September 13 and involved two men who allegedly kidnapped a truck helper.

View all shorts

Live Blog