Tuesday, October 29, 2013
Dubai Won't Work
Dubai is building an airport that will be as big as a city. The first passengers have started arriving. I hope they take lots of pictures of the endless glass and steel towers in the middle of nowhere. Those things will be derelict hulks and piles of recycling material within one generation. There is no way Dubai's civic boom can be sustained.
Dubai is a city-state built on sand. Anything built with sand or on sand will crumble but the rich Arabs building wild projects in Duabi never figured that out. Developers built island resorts in Dubai that are crumbling into the sea due to natural erosion. There aren't enough clueless rich people in the world to pay for perpetual sand maintenance on artificial islands.
Dubai built its skyscrapers with imported slave labor. The workers live in squalor and make next to nothing. No one told these workers that they would be working for starvation wages under dangerous conditions. When some of them finally got sick of their dire straits, they went on strike and now face mass deportation. Dubai's major construction contractors are eventually going to make the country subject to a host of WTO sanctions that will make the country economically uncompetitive.
Dubai has no real competitive advantage, and its artificial advantages like low labor costs are temporary. Dubai's historical role as a crossroads for Persian trade means little in modern times. Geographically isolated city-states need to be about something to have longevity. Singapore and Hong Kong are about seaborne trade and their natural deep harbors are excellent gateways to mainland Asian markets. Dubai has no such natural advantage. Even comparing it to Las Vegas is meaningless. Las Vegas has an indefinite supply of fresh water and energy thanks to Hoover Dam, assuming the US government can manage demand from the dam's other customers. Dubai has no such resource. Hydrocarbon energy is a small and declining share of Dubai's GDP. The city's physical size, population, and economy will contract to match its energy resources.
Dubai is a physical and financial impossibility. The world's traveling classes will eventually tire of subsiding this high-cost, high-entropy boondoggle with their vacation dollars. The world has plenty of financial hubs and tourist traps that aren't slipping into the sea.