Upside of the downturn

I'm not minimising the individual problems caused by the economic meltdown such as people losing their jobs, with all the ramifications of that. But for now concentrating on the bigger picture, there is a huge upside to the downturn as far as Dubai is concerned.

It means a slowing down of the frantic growth, so much of it with apparently no integrated plan and far too many individual projects with no apparent planning.

The economic crisis is a blessing in disguise. It brings time to take stock. To consolidate. To plan.

It means that maybe some of the vital infrastructure - sewage treatment plants, water, public transport, police, fire brigade, health care, laws even - can catch up with the growth in size and population.

Dubai will be the same as the rest of the world. Badly run companies will go to the wall. Cowboys, in all industries, will go. Overstaffed companies will get sensible about staffing levels. Banks will do credit checks and demand sensible downpayments. Businesses will be, will have to be, run in a businesslike way.

All of that is good news.

The economic world needs this kind of shock every so often. It's like bushfires, they're needed to clear the deadwood, to allow regeneration. That this is worse than almost all preceeding economic slumps simply mirrors the fact that what lead to it was worse than we've seen before.

Human nature left to its own resources with checks and balances removed. People trusted to do the right thing. What naivete.

Naturally and inevitably personal greed, short term thinking, irresponsibility took control. To the point that the deadwood was choking the healthy.

So we have an economic bushfire. It was inevitable.

Doubt is now being expressed over Dubai's target of 15 million tourists by 2015, with the huge ramifications that brings.

Developments in Dubai are being scaled back, postponed or cancelled.

Looking just at Nakheel, they have announced that the master plan of the multi-billion dollar Jumeirah Garden City, what is currently my favourite old Satwa, is being "revisited and pockets of the development are delayed".

On Palm Jumeirah, Frond N villas, Gateway Towers and Trump International Hotel & Tower have all been delayed. Their recently announced kilometre-high tower is now on hold and work on The Universe will be restricted to preliminary engineering studies. The Universe is the vast offshore development planned along much of the coastline.

Nakheel is far from being alone in this scaling back of projects. For example, Limitless said of its Arabian Canal mega-project that it is "reviewing the pace of development in response to market conditions."

Have no doubt that we'll be seeing many more announcements of slowdowns, postponements, cancellations in the coming weeks and months. From the major Master Developers and from small individual developers.

And for Dubai that's the positive side of the economic crisis. Time to think, to re-think. We can hope there's enough time for better planning too.

I don't doubt that the projects will go ahead in the longer term, although there may well be changes from the original announcements. But the slowdown does offer the chance to get them right, to phase in all the facets of the growth sensibly.


Nakheel info is here.

Limitless info is here.

Tourism outlook is here.