The Precarious Existence of Dubai's Indian Middle Class

by Neha Vora
published in MER252

Dubai, according to the conventional wisdom, is a bust. The International Monetary Fund predicts that economic growth in the United Arab Emirates as a whole will be lower in 2009 than in the last five years; the Dubai government has borrowed billions of dollars from Abu Dhabi to bail out its banks; the government of the Indian state of Kerala reports over 500,000 return migrants from Dubai due to the crisis; property prices have dropped faster than anywhere else in the world; and hotel rates have been slashed in order to lure tourists.

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The Gulf Comes Down to Earth

by Kristen Smith Diwan , Fareed Mohamedi
published in MER252

Between the summer of 2008 and the beginning of 2009, oil prices plummeted from a high of $147 per barrel to a low of $33. This extraordinary reversal of fortune announced the end of the second oil boom for the countries of the Gulf Cooperation Council (GCC) -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates -- precipitated, of course, by the broader global financial crisis. How these oil-exporting countries will weather this dual economic challenge is a live question. From the time that the Gulf economies took off in 2003, there were growing worries that their rapid rise was a massive investment bubble built on high oil prices and cheap credit.