Could this be the city of uber-luxury hotels, the place with a reputation for huge salaries and extravagant living?
As highlighted in a (much-emailed) report in The Times on Friday about abandoned luxury cars in Dubai, the gold-plated gloss is peeling off this high-rolling expat oasis very quickly.
For many expatriate workers in Dubai it was the ultimate symbol of their tax-free wealth: a luxurious car that few could have afforded on the money they earned at home.
Now, faced with crippling debts as a result of their high living and Dubai’s fading fortunes, many expatriates are abandoning their cars at the airport and fleeing home rather than risk jail for defaulting on loans.
Police have found more than 3,000 cars outside Dubai’s international airport in recent months. Most of the cars – four-wheel drives, saloons and “a few” Mercedes – had keys left in the ignition. Some had used-to-the-limit credit cards in the glove box. Others had notes of apology attached to the windscreen.
“Every day we find more and more cars,” said one senior airport security official, who did not want to be named. “Christmas was the worst – we found more than two dozen on a single day.”
But it’s not all about the crumbling western expatriate dream, although the Times would have us think that way. Curiously enough, in a story that bears a strong resemblance to The Times’ report on Friday, Indian website Daiji World reported last month that South Asian expats - many employed in Dubai’s construction and real estate industries - were fleeing Dubai in droves, and that it was mainly this exodus causing the pile-up of abandoned cars.
Reported in DaijiWorld:
Local police have found at least 3,000 automobiles — sedans, SUVs, regulars — abandoned outside Dubai International Airport in the last four months. Police say most of the vehicles had keys in the ignition, a clear sign they were left behind by owners in a hurry to take flight.
Faced with a cash crunch and a bleak future ahead, there were no goodbyes for the migrants — overwhelmingly South Asians, mostly Indians - just a quiet abandoning of the family car at the airport and other places.
While 2,500 vehicles have been found dumped in the past four months outside Terminal III, which caters to all global airlines, Terminal II, which is only used by Emirates Airlines, had 160 cars during the same period.
Regardless of who is leaving their cars (and which publication reports it), the underlying facts are sobering, as the FT reported in a recent article entitled “Dream jobs in Dubai dry up“, noting that highly-paid expat jobs in investment banking, real estate and services are being steadily slashed.
Morgan Stanley, Credit Suisse and Goldman Sachs have already cut about 10 per cent of their regional staff as the prospects for next year’s fees dim with the oil price slump - and the axe is looming over staff of Dubai real estate companies as a six-year property bubble finally bursts, the report said.Big real estate companies are slashing up to 15 per cent of their workforces. Nakheel, the government-owned offshore developer, this week said it was paring back high-profile projects such as the Trump Tower on Palm Jumeirah, one of the three luxury Palm Island developments, while also making 500 staff redundant.
The reality of corporate slimming-down certainly “sits uncomfortably with the perception of Dubai and the Gulf as havens of economic stability in the current global financial storm”, said the FT. But there’s an upside to this story, it adds, noting that as Dubai loses its shine, other, less glamorous cities are looking more attractive.
Abu Dhabi and Doha are first in line to take advantage. The capitals of Qatar and of the United Arab Emirates are among some of the richest cities in the world, thanks to their hydrocarbon reserves and overseas investments. They are also diversifying their economies, with an emphasis on industry, culture and education.
And for those expats seeking the luxuries of Dubai’s champagne brunch lifestyle, some are turning to perceived hardship postings, such as Saudi Arabia and Kuwait, which are seeing stronger demand for construction expertise.
We’re not sure if the champagne brunch is a way of life in Riyadh and Kuwait, where alcohol is banned, but at least these brave souls will be able to pick themselves up a luxury limo or two.
Related link:
Shakeout in Dubai - FT Alphaville
