Dubai is probably one of the most beautiful cities in the world. The city/state has been growing at a tremendous rate over the past couple of years. It was previously a backwater town with an international shipping port. Dubai now has many prestigious buildings like the man made, Palm Island and the world's tallest building. However, starting this year, the city is now struggling to fund new projects and paying building contractors.
Here are three reasons why Dubai is now struggling and might become one of the biggest bankrupt cities ever:
Dubai's neighboring cities and countries like Kuwait and Abu Dhabi, it has no oil reserves. The city has no land resources like oil, to fall back to. Since there is no oil, it has depended on other things to finance their debt like tourism and shipping. However, tourism is declining because of the financial crisis. A lot of the rich tourists are busily saving up money and paying their debts.
2. It doesn't have a transparent business and political system.
The government has a tight grip on the financial system and the media can be fined if you write any bad news about the city. This prevents people from exposing scandals and other issues in the city. If there is any problem, it can be hidden away from the media.
3. Most of the labor force is foreigners.
Approximately 90% of people in Dubai are temporal residents. They are only there for work and therefore they don't have a full vested interest in the long term viability of the city. As a result, some of the things they build are for the short term only.
Tito King is an Author living in Sydney, Australia. He is interested in reading and creating websites. His latest website is about tank tops and finding the best racerback tank tops on the web today.
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