Given the amount of trade going on in Dubai, and the appealing tax concessions, there was considerable incentive for companies to set up offices in one of the specific zones. That said, the kind of growth occuring in Dubai is unprecedented, and even before the recession struck, investors had begun to worry that the bubble could not sustain itself. Real estate and housing prices soared, and new developments were snapped up, both by investors and by the hoards of incoming expatriates. When the crash hit, though, unfortunate purchasers found themselves with property they couldn’t afford and no buyers in sight. Traders were quick to secure their own retained earnings – and then refuse to pay their creditors, thinking of any excuse possible to delay, reduce or prevent payment.

The effect was disastrous. A year ago, real estate in Dubai was an absolute seller’s market, with affordable housing difficult to find. Rent prices have since been slashed almost in half, with literally thousands of newly-built units standing empty, as expatriates who can’t survive in the current economic climate trickle out of the country. Many, too, are leaving their debt behind; HSBC in the Middle East has experienced “a rapid increase in skips [absconding customers] since the autumn of 2008 and there are few signs that this is abating,” said George Lennox, the head of PFS credit at HSBC Middle East, in a statement to The National, a UAE broadsheet. That said, the high ‘skip’ rate is largely as a result of fear – dishonoured cheques in the UAE are punishable by imprisonment. While bankruptcy protection laws exist, they are untested, and there is general uncertainty about due process in the region.

Thousands of labourers from the Asian subcontinent have had their visas cancelled and been sent back home. This pervades all areas of the lower class workforce: Edna Santos, a domestic helper and caretaker for a Jordanian family, finds herself having to return to the Philippines after three years’ employment. “We used to be more – there were two other Filipinas – but [her employers] could not pay them, so after January, they went back home. At the end of August I’m going back also, but I’m not unhappy – I can see my cousins, and I have some chances for work.”

Investor confidence is crucial to the success of such individual projects as Dubiotech – or the more ambitious, typically large-scale developments, such as the gargantuan Dubailand. In light of the current economic situation, where investor confidence is at its lowest, many companies can be forgiven for being hesitant to invest. (In fact, many companies with a Middle Eastern market outside of Dubai have found it absolutely prudent to halt all expansion and developments, both in Dubai and elsewhere, as institutional investment funds dried up.) At the same time, however, these companies cannot afford not to invest in Dubai – or rather, in the Middle East, to which Dubai is the gateway.

In the Middle East, those countries with economies rooted in a surplus in commodities – Qatar, Bahrain, Saudi Arabia – are in a position to wait out the drop in oil and commodity prices. Of course, the economy requires someone to begin spending first, to allow for greater growth – but within the microcosm of the Middle East, it is inevitable, and crucial, that the oil price will recover, improving investor incentives. “Middle East governments are grappling with the same problems as their European and US counterparts,” says Dominic Dudley, deputy editor for MEED, a Middle Eastern business broadsheet. “Many are in the fortunate position of having large reserves, which means they can afford to support struggling business and invest in … infrastructure.” Dubai, lacking as it does these reserves in oil and gas, doesn’t have the luxury of waiting; continued growth in real estate is necessary for it to remain competitive. To this end, we are seeing a merger between large real estate units. This has the effect of slashing personnel cost by about 70 percent, as well as stabilising – and in the longer run, perhaps monopolising – the real estate market.

The slump is not, of course, unique to Dubai – all of the Middle East is feeling the effects of the recession. Dubai’s survival is not at stake any more than Qatar’s or Saudi Arabia’s is; the difference lies in what their continued survival is pegged on – a surplus in commodities, or foreign investment. Since September 11 and the subsequent freezing of Middle Eastern accounts in America, various Middle Eastern interest groups have found Dubai a convenient and lucrative place to store their money. Qatar and Bahrain are emerging as alternative routes of entry, but Dubai remains the favourite. The system, at present, depends on recovery in Dubai as a gateway into further Middle Eastern investment.

While recovery will be slow, and it is unlikely that growth will return to the rates of the halcyon pre-crash days, it is in the interest of too many moneyed individuals to see continued growth in Dubai for it to fail.

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Liam Kruger is a first-year student, majoring in English Literature and Classical Studies. He is a subcom member at the Cape Town Globalist.