Something more than an attack on the economy. It risks becoming damage that is difficult to recover and which casts a shadow in the long term. For a country that has the image as the only, or almost only, expendable asset, the media reports of the stampede from the hotels while the skies are crossed by the trails of fire of the Iranian rockets they are a blow to the heart of the business, a wound that will be difficult to heal. Dubai they Emirates they were born and prospered presenting themselves as the paradise of the Middle East, a happy oasis far from geopolitical crises, where security, luxury, well-being, competitive salaries, combined with cutting-edge services and tax treatment unthinkable elsewhere, have attracted capital, billionaires and aspiring billionaires from all over the world.
Here they have found a home or refuge – call them what you want – entrepreneurs and businessmen attracted by the prospect of entering a international network of high level, young up-and-comers looking for the great opportunity of life, startuppers fleeing from the expensive taxes of the West or simply those who want to savor exclusivity in its pure state.
The fiscal Eden suddenly became vulnerable
Some posts on Instagram have emphasised, even with a certain bad taste, the reason why many Italians have made Dubai their residence. «Better the missiles than the 50 percent tax» commented a young professional, followed closely by an army of cryptocurrency experts and attractive influencers, all highlighting the blessing of the absence of income taxes and the sole rate of a pittance 9 percent of company profits but above a certain roof.
Well, this Eden was suddenly shocked by the Iranian bombs and the unthinkable occurred: hotels emptying, reservations cancelled, airports closed. Then infrastructure, buildings and data centers affected and banking services partially disabled.
Tourism and reputation: the real engine under pressure
A catastrophe, a blow to reputation and to that economic engine that is hospitality. According to the analyst firm Tourism Economics, the conflict could lead to a decline in international visitors to the Middle East of between 11 and 27 percent with a loss of expense between 34 and 56 billion dollars. And Dubai is the heart of this earthquake.
His miracle has been the subject of study for years due to its atypical nature and the extraordinary speed it has been able to impart to very rapid and multifaceted growth.
Unlike other emirates and important Gulf countries such as Qatarthe fortunes of this city snatched from the desert rest only minimally on hydrocarbons. Oil deposits were indeed discovered in the nearby territorial waters – and here too over time an original storage technology was developed that prevented ships from having to enter the port – but compared to almost all neighboring states, these resources were modest. To give you an idea, Dubai’s proven oil reserves are approx one twentieth than those of the neighboring one Abu Dhabi and today they have a limited impact on the economy of the small nation.
The economic model built by the Al Maktum dynasty
Which instead he traveled, under the guidance of the dynasty of At Maktuma rather original path of development. A ruling house – Dubai is today led by the Emir Mohammed bin Rashid Al Maktum – which has always shown itself to be very open to the needs of international trade and traffic and very attentive to the need for adequate infrastructure to support this model.
In this key, the real estate sector for many years it has represented not only an extraordinary driving force but also an iconographic element that well summarizes some of the local records.
The symbols of the miracle city
The skyscraper Burj Khalifawith its 830 meters and over 160 floors, it is the tallest building in the world. The hotel Burj al Araban extraordinary sail-shaped architectural jewel built on an artificial island, has been, since its inauguration in December 2000, the most famous accommodation facility in the world.
Guided tours are organized there and its image is so identified with that of the city-state that it is now on the emirate’s new car license plates. Its heliport, 200 meters above the sea, is used for various activities: everyone remembers the historic tennis match between Agassi and Federer on the highest tennis court ever built, a spectacular match organized in 2005 to promote the Dubai Duty Free Tennis Championships.
Designed by British architect Tom Wrightwas hit at the height of the sixth floor by a drone fired from Iran on February 28th.
Equally impressive are the Palm Islandsthree artificial islands. Palm Jumeirah, Palm Jebel Ali And Palm Deirabuilt in the early 2000s using sand from the seabed and rock, have made it possible to expand the tourist coast of 56 kilometerswith buildings, villas and hotels that have attracted tourists and investors from all over the world.
The giant commercial engine
If tourism is in fact a reality that goes from autumn to spring, when the climate is favourable, the commercial drive knows no seasons. Just to give an example, the Dubai Mallwith a surface area of 400 thousand square meters and an internal area of approximately 200 thousand, it is considered among the largest in the world and the most important in terms of number of shops, approximately 600. It has parking for 16 thousand parking spaces.
In the city there are approx 155 thousand rooms and according to CoStar data, the average daily price for a room between December and January is approx 245 euros.
Central is the world of constructionsfor infrastructure and residential construction, just as the objective of expanding the territory is evident. On the other hand, the country is a reality of alone 4,100 square kilometers which roughly counts 4 million inhabitants and which has doubled in just 15 years.
A global city built by expats
Here too we see a situation strongly influenced by growth choices and a commercial vocation. The Emiratis I’m just the 10 percent: the rest of the population are foreign expatriates from all over the world, managers, entrepreneurs and professionals, but also a lot of manpower indispensable for construction activities and services but often employed in exploitative conditions.
In great development financeas evidenced by Dubai International Financial Districta special economic zone of approx 110 hectaresregulated by an independent Authority, with its own juridical and legal system separate from the ordinary one of Dubai, which follows the framework of the Commonwealth law and adopts English as its official language. It also allows you to own companies 100 percent and an extraordinarily attractive tax regime.
The issue of flights and the trust to be regained
Linked to business and tourism is the theme of flights. A third of Europe-Asia transits pass through Dubai and Doha. Dubai International Airport, which serves as the company’s hub Emiratesowned by the Emirati government, is one of the busiest in the world – the third, to be precise, after theHartsfield-Jackson of Atlanta and the stopover of Beijing – welcoming between 2 thousand 2,500 flights per day operated from over 100 airlines. This traffic volume translates into almost 900 thousand flights per year.
Over time the Emirates company, as well Etihad Airways And Qatar Airwayshave taken traffic away from their European, Asian and even North American rivals.
«When the airports return to full capacity, it will not be easy to recover trust. Furthermore, the cost of fuel has exploded and will impact the price of tickets in the medium term. Then there is the fact that companies cannot make direct connections, skipping their own hub, because it is not permitted by law” he explains Andrea Giuricintransport economist at the University of Milan-Bicocca.
Eddy Pieniazekhead of the consultancy firm Ishka Advisory, claims that to encourage tourism to return to normal levels, Gulf companies could offer competitive rates. But everything hangs on the variable of the impact of the conflict and whether the price of raw he will return to the stars.
For Dubai, the return to normality may not be so simple.
