"During Dubai’s boom years, expatriates from around the world took advantage of cheap credit and a booming economy to live a luxury lifestyle. Easy credit arrangements meant that they could buy penthouses, motorboats and expensive cars with little or no scrutiny from lenders. When the economy slowed, many foreign workers lost their jobs or had their salaries cut and became unable to keep up with their payments."
Today's Financial Times has a couple of articles which put all that in some perspective. They tell us the reality, that people around the world did exactly the same thing, not just those living in Dubai.
I could rewrite the first sentence in the Sunday Times article to make it more accurate:
During
The FT gives an example:
"Mick Longfellow is teetering on the edge of financial chaos. A dedicated teacher married to an equally hard-working nurse, living in a modest house in Newcastle in the north-east of England, the pair spent the past decade treating themselves to gadgets, gizmos and home upgrades.
They put in new windows. They bought the biggest television and sound system their living room could accommodate. They changed their cars every year or two. With two children to spoil as well, they were living on credit - lots of it. There were store cards, car loans, personal loans and credit cards.
Now, amid the recession, those lenders want their money back. "The bank just closed down our overdraft. That was the killer blow," says Mr Longfellow. But with the family's debts running to £30,000 ($49,200, €34,600), far more than their annual disposable income, repayment is going to take a very long time.
It is a sad blow for the Longfellows. But multiply one family's debts by the millions of people across the world who are in an even worse state, losing jobs and homes, and the scale of the problem is clear.
The second article says:
Lenders in Europe bracing themselves for a rising wave of consumer debt defaults as the credit card crisis that has caused billions of dollars in losses among US banks spreads across the Atlantic.
The International Monetary Fund estimates that of US consumer debt totalling $1,914bn, about 14 per cent will turn sour. It expects that 7 per cent of the $2,467bn of consumer debt in Europe will be lost..."
As I said, it's not unique to Dubai. All over the world money was cheap, credit was easy, banks pushed people to take large loans, credit card companies threw cards with high limits at people, credit checks hardly existed. That's why the world, not just Dubai, is in the mess it's in.
But back to the Sunday Times article. It includes a quote from a Mr Nuseibeh repeating the myth "Many of the British expatriates in particular tried to hang on as long as possible to life there and sadly many have ended up writing bounced cheques, having their passports confiscated so they cannot leave the country and really living in appalling conditions in bedsits shared with maids, or even in cars parked in car parks."
A request. Would anyone living in a car in a car park, or anyone who knows anyone living in a car in a car park, please tell me where so that I can go and verify the so-called fact.
This nonsense started in the seriously inaccurate Johann Hari article a few months back and it's become part of the folklore.
Sunday Times article.
Financial Times articles here and here.
21 comments:
No, it ain't just Dubai, but Dubai will get hit harder than most. Whereas in other countries you will stay and sort out your debts, why on earth would you want to risk a prison sentence, the governing laws here are farcical.
And it's not just the Times that slates the Dubai economy, so too The Economist, and they certainly don't sensationalize.
A car family for you (but pre-financial crisis)
http://www.thenational.ae/apps/pbcs.dll/article?AID=/20080910/OPINION/122725625
So you think Johann Hari was lying?
And as Richard says, the unique thing about Dubai is how much worse the impact of all this bad debt will be. Three things:
1) People's freedom is used as a form of security, through passports, cheques etc. So bad debt will have the same economic impact, along with the kind of social impact that is unthinkable in the West.
2) Lots of people are going to jail. This is big time bad news on a social level, but also an economic one - all those people become a drain on the economy, rather than a contributor.
3) People who lose their jobs, along with their families, leave the country. This directly removes participants from the economy. Less school enrollments, less retail customers, less gym members, less everything. When someone loses their job in a typical country, they do odd jobs, work casual for a friend or family member, whatever. But they remain a part of the economy.
saw this in today's(?) FT:
"The International Monetary Fund estimates that of US consumer debt totalling $1,914bn, about 14 per cent will turn sour.
It expects that 7 per cent of the $2,467bn of consumer debt in Europe will be lost, with much of that falling in the UK, the continent’s biggest nation of credit card borrowers"
the story is here.
the last report i'd read on credit cards in the UK said the outstandings were close to USD 1trn, but this was 2-3 yrs ago, i cant verify the numbers.
Richard put it quite well.
You are threatened with jail here for late credit card payments (in addition to be being charged late fees). I am sure this doesn't happen in the UK.
Another point, while the problem was acknowledged quickly in other places, the reaction here was oen of denial, and the only important figure to accept that was publicly shamed and ostracized.......
And just because Hari lied on a few counts doesn't mean all his points are wrong.
Also, people (not you, but plenty of others, who claim Dubai is wonderful coz "we have a madid here which we didnt have back in Leicester") who benefit the most from the skewed system here are the first ones to bash "anti-Dubai" articles.
Well, there wouldnt be so many anti-Dubai articles, if actual problems were treated normally instead of denying ....the GN coverage of the Blackberry episode was a pleasant change from the normal "close your eyes" approach.
Agreed Richard and Mohammed, and I've often said here that the laws need changing. That wasn't what I was talking about here though, I was simply pointing out that Dubai is singled out regularly for criticism about things which are happening all over the world.
Anon@1.43, the same applies to your comment.
And do I take it that you think Hari was not lying? I pointed out several in my post on the article and on his follow-up piece which contained no truth whatsoever. Read his articles again and check each claim he made. There were true facts in it but they were outnumbered by the lies and they lost credibility as a result.
"When someone loses their job in a typical country, they do odd jobs, work casual for a friend or family member, whatever. But they remain a part of the economy."
The UAE is not a typical country, it's a guest worker society.You're comparing apples with oranges.
People come here on company visas for a limited period, they can't become citizens and they leave when the contract is over.
Mohammed, I agree and I post here quite often about laws needing to be changed, about the lack of transparency, about denial.
i challenge you again...dont give blanket statements like "This nonsense started in the seriously inaccurate Johann Hari article a few months back and it's become part of the folklore". you never did point out the so called inaccuracies of hari article,in spite of being asked, but keep going on and on about it. is it not about time to put down point by point where all he is wrong, and you are right? cmon..
Anon@2.07. You challenge me and demand an answer? What arrogance.
Ignorant too, not bothering to check for facts before you shoot your mouth off with lies: "you never did point out the so called inaccuracies of hari article"
Read my three posts in April and May on the subject of Hari's article.
did...and found nothing worthwhile other than blanket statements. facts and numbers would help.i did not think debate challenge on a public forum is arrogance, unless you feel you are superior or beyond making mistakes. u could maybe repeat some of the core factual errors, just to enlighten current reads of this post. i dont have the hots for hari, but just dont see why you think he got it all wrong when the truth is staring you in the face.
just to jog memories, i quote below from Hari's published response to the so called response from people like you. I will let readers decide.
"Last week I reported from Dubai, pointing out that this glittering city was built on what Human Rights Watch calls "slavery" - bitterly poor people who are conned into going there and forced to stay by a medieval dictatorship. Amongst others, I interviewed an Emirati man called Sultan al-Qassemi who passionately defended this system, saying that it is absolutely right that these workers are blasted with water cannons, arrested, and deported if they try to strike against their slavery-style conditions.
He did not react to my article by responding to the many criticisms I made of Dubai. He can't. He knows they are true. Instead he wrote a piece for the Independent asking: But what about Britain? He listed many things wrong with Britain - homelessness, detention without trial, the abuse of trafficked workers - and cried: talk about them instead!
As it happens, I have criticized all these things about Britain myself, in the British press, and in publications across the world. The difference is - Sultan doesn't oppose the appalling things about his own country. He cheers them on - and all he can do to distract from this shameful fact is to try to change the subject.
The best way to respond to what-aboutery is to state a simple truth. "
Anon@5.49 you obviously can't see what's staring you in the face.
Equally you obviously have never even visited Dubai or you wouldn't have to ask what untrue statements Hari included in both his articles.
Why I bother I don't know, having to state the bleeding obvious to people who refuse to see it.
I'll give you some examples from Hari's first article:
The wide, smiling face of Sheikh Mohammed – the absolute ruler of Dubai – beams down on his creation. His image is displayed on every other building...He dominates the Manhattan-manqué skyline, beaming out from row after row of glass pyramids and hotels
Untrue.
All over the city, there are maxed-out expats sleeping secretly in the sand-dunes or the airport or in their cars.
Untrue.
The British quit, exhausted, just as oil was being discovered.
Untrue, it was part of the UK's 'East of Suez' policy.
This is a city built from nothing in just a few wild decades...
Untrue, it was a thriving commercial and retail centre over 100 years ago.
Every road has at least four lanes
Untrue.
The World is empty. It has been abandoned, its continents unfinished
Untrue, it has not been abandoned.
They were building an air-conditioned beach here, with cooling pipes running below the sand
Untrue, it was an idea floated by a private developer.
Fake Plastic Trees
Untrue. There are a handful of disguised mobile phone towers, as there are around the world.
And of course the highly questionable claims of the South African living in her 4x4 in a hotel car park, the drunks lying on the floor vomiting in nighclubs (the bouncers would throw them out long before that). And the interviews with only the most extreme residents, whether Emirati dissidents or the cartoon-expats he depicts.
The valid things he talks about are diminished by the overall vicious tone, the lack of balance or context, the questionable claims and the untruths.
His second piece, in the Huffington Post, continued the lies.
Anyway, now the Dubai authorities have decreed that the article must not be read.
Proves my point, no?
Untrue, and what it proves is that he was lying. My posts have links to it that have never stopped working.
Anon@12, I posted back on April 11 that Sultan Al Qassimi had done precisely the wrong thing and thrown away an opportunity with his response. Hari's comments about it were spot on.
The wide, smiling face of Sheikh Mohammed –
Untrue? It is there on buildings if there are any special occasions coming up, it is there behind lots of emirati cars, and it is definiely in lots of offices i got to.
All over the city, there are maxed-out expats sleeping secretly in the sand-dunes or the airport or in their cars.
Untrue? I know asians who sleep in the car, use toilets monthly from apartment owners for 50 dhs a month. there are asians who lost jobs who used to sleep in the mamzar beach, and get chased away by police.
The British quit, exhausted, just as oil was being discovered.
Untrue, it was part of the UK's 'East of Suez' policy. Irrelevant nit picking, in context of story.
This is a city built from nothing in just a few wild decades...
Untrue, it was a thriving commercial and retail centre over 100 years ago.Oh YEAH? you were there? it was small fishing and pearling dump.
Every road has at least four lanes.
Untrue? Express ways have. others dont. Dont know how it changes the story.
The World is empty. It has been abandoned, its continents unfinished.
Untrue, it has not been abandoned. Well, right now it does look abandoned, except for some pretence at work.and of course, your friends at the PR will give the right info that it is indeed not abandoned, we just need to ask.
They were building an air-conditioned beach here, with cooling pipes running below the sand
Untrue, it was an idea floated by a private developer.
'They' is not qualified in the first place for you to scream untrue.
Fake Plastic Trees
Untrue. There are a handful of disguised mobile phone towers, as there are around the world.
Definitely not untrue. I have indeed seen garish plastic trees in and out, with no so called mobile phones.
how all this changes the larger allegations which are all true, i dont know. nitpicking, to establish the larger story that is indeed true is false. also known these days as fisking.
what is untrue and true, yours is not the final word. you speak from one small individual's personal vision. others might have seen and experienced stuff in dubai that an aussie expat living there might not have. doest take too much to figure that out, does it?
point i wanted to make above is, yours is not the final word of authority on experiences and life in dubai. there are indeed lots of things happening here you would not even have an inkling about. while you can reject everything based on your personal experiences, and say the article by hari was a blatant lie, lots of others accepted the big picture as completely true based on their experiences here. smaller details in it could of course be debated, as it was based on someone else's perspective with some errors. does not in any way qualify his article as absolutely false, nor made up stories that have gone down in folklore. now don't start by saying, i never said it was false, i was just picking small mistakes in it. you would want people to believe the whole story was a hoax, for some reason.
Anon@2.22 you're a bigot with one fixed idea in your mind which no amount of facts will change.
You demanded that I point out the lies in Hari's articles and I humoured you by doing exactly that.
Unacceptable to you because it didn't fit your already-fixed ideas.
Your detailed response also shows your utter lack of knowledge of Dubai and understanding of what Hari wrote, indeed of the English language.
You decide that rather than seeing the truth of what I said for yourself: "what is untrue and true, yours is not the final word. you speak from one small individual's personal vision." - you don't apply the same to a sensationalist writer who made one short visit, however.
You're wasting our time so I shan't bother to humour you any more.
read your reply above, and mine. you will indeed see who seems to have a fixed idea.no need to get personal about knowledge of english and such, we are just debating the veracity of an article. he wrote about a city with a dark side that no one sees. and you, in your mind, truly established that the whole story about dubai is wrong because it mentioned plastic palm trees while there are none in dubai.whatever.
it's just dubai....
From the National, 5 Aug
Nicole Stroop was one of them. Her time in Dubai last autumn was supposed to last only 15 hours.
Instead, the 34-year-old Canadian spent a night in jail and almost a month trying to get her passport back before flying out and vowing never to return.
Ms Stroop was on her way from a job in Kandahar to a holiday in South Africa when an altercation with a high-ranking immigration official in Dubai went wrong.
During the stopover, she left Dubai International Airport to join friends for dinner at the Irish Village. When she came back through security, officials told her there was a problem with her passport. After 45 minutes of questioning, during which things went steadily downhill, Ms Stroop faced two charges, one for allegedly disrespecting an official and another for the alcohol she had consumed at dinner.
There were also many frustrating – not to mention expensive – days spent figuring out how to navigate a foreign court system. In the end, an official apology won the return of her passport, and she left the country.
Had the case not been dropped, said Ms Stroop, “I could have been in jail for three years.”
The reasons cited for arrests include making or appearing to make rude hand gestures, drinking or carrying alcohol without a licence and, in the case of Ms Stroop, defending oneself just a little too vigorously for local sensibilities.
Anon@11.49 that's a different subject.
My post draws the comparison between the economic situation in Dubai and elsewhere. Your comment is about the laws in the UAE, which I post about frequently.
you running scared these days....
No I'm not.
Post a Comment