Initially, Dubai was unaffected by the 2000 recession which was originated in the US and had repercussions all over the world. Countries around the world felt its impact deeply. It continued building megastructures, alluring and enticing the world with its dreams. Constantly reinventing itself, Dubai managed to seize revenue by the daring and vision of its sheikhs. They saw an opportunity when the world saw uncertainty. But this picture changed soon.
After its tourism boom that lasted 6 years, Dubai was deflated. Abu Dhabi bailed out decadent Dubai by contributing $15 billion to shoulder its debt. This gave Dubai a breathing space for the next 4 years. But there is unease about Dubai’s ability to pay back its debt as it does not have oil reserves that Abu Dhabi boasts of. Dubai was lined up for construction of some of the world’s iconic structures. Most of these mega-structures had to be abandoned, while the future of some looked uncertain. The ongoing constructions had suddenly come to a halt. One such case that stands out is the much-hyped 'The World'. As of now, it has only one 'show home' on it, with no construction on any of the islands. Property prices have fallen and unemployment is rampant. Dubai has a huge amount of debt maturities in 2011.
Dubai’s revenue generation is mostly from real estate, tourism and service sector. Oil contributes less than 6% of Dubai’s gross domestic product today. This scenario may change soon. The newly discovered offshore oilfield ‘Al Jalila’ named after Sheikh Al Maktoum’s daughter has lot of oil reserves. This oil field is expected to start its operations anytime in 2011. Dubai’s economy may get a good boost by this discovery. Will this be the much-needed answer to Dubai’s prayers?
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