Deserts have a way of reclaiming whatever is built upon them. In the case of Dubai, on the Persian Gulf, the global financial implosion has sent that process into overdrive. After six years of frenzied expansion, during which the emirate's population grew at 7% annually and nearly $600 billion went into construction (the world's tallest building! the world's largest shopping mall! the biggest man-made island! an indoor ski resort!), reality has come rushing into view.
"They have no oil, no culture, no history," says Peter Harradine, a prominent landscape architect in Dubai and manager of Harradine Golf. "So what they have been able to produce is a miracle." Or was it a mirage? Today, an estimated 50% of the slated developments are frozen or canceled. Banks have stopped lending. Housing prices fell 41% in the first quarter of 2009 and are expected to drop to preboom levels. The stock market has plunged 70% from its peak. And people across the socioeconomic spectrum are being laid off — and fleeing — in droves. But even fleeing is harder than it sounds: When foreigners, who once made up perhaps 80% of Dubai's 1.7 million residents, lose their jobs, their work visas are rescinded and they generally have 30 days to pay their debts and leave. Those who fail to pay risk debtor's prison. And debt here is now as deep and ubiquitous as the sand itself.
The wealthy, like the Emiratis, remain well cared for. Designer Roberto Cavalli, asked why he spent $30 million on his new Cavalli Club during a financial crisis, replied, "What financial crisis?" These pages may remind him.
Road to Nowhere
Dubai's expansion was as ambitious as it was improbable. Dubailand, a $64 billion mixed-use development initially planned at 107 square miles, was to be the world's largest collection of theme parks, shops, residences, and hotels. For now, though, its roller coasters, life-size dinosaurs, snowy mountainscape, and polar bears will remain a fantasy, one of the gaudier casualties of the economic downturn. While formal cancellations are rare in Dubai, a number of other projects have been delayed or scuttled, including an underwater hotel; a Tiger Woods golf course; a residential community set among full-scale replicas of the Seven Wonders of the World; a rotating skyscraper; and a beach designed by Versace, complete with chilled sand.
With requisite hookah and a jeroboam of Champagne, a group of German businessmen celebrate their purchase of an Alaskan oil field at Plastik Beach Club, a playground touting itself as "exclusively for the filthy rich and aesthetically perfect." Public intoxication and displays of affection are jailable offenses in Dubai, but private clubs are quietly ignored by the authorities, often rendering them happy havens of vice. Plastik offers a helipad and a dock for its wealthy guests, many of them Russian; as the economy crumbles, they party on. One American expat says that while Dubai's promise has faded in the economic downturn, "people who dream of a better life dream of coming to Dubai. You can call it the American dream."
Dubai was a modest trading settlement until the 1980s. Fueled by cheap credit, tax-free living, and limitless ambition, the city-state pushed into the desert and up to the sky, culminating in the frenetic growth of the past six years. Now, with cash scarce and many of Dubai's expats moving away, the cranes (a quarter of the world's supply) have quieted and the streets are all but empty. A resident from Ireland reflects that living in Dubai during the rush was "like being on a drug. Every six months, the city would morph into something completely new." Kayla, a South African, recalls, "Everyone was talking about how it couldn't go on like this. Then, all of a sudden, everything changed."
Once Dubai's most valuable import, foreign laborers have become a liability to their former employers. Hundreds of thousands of them, mostly from South Asia, were drawn by the promise of plentiful work and money to send home to their families. Now that much of Dubai's construction has ground to a halt, many are being sent home; the number of migrant workers here has reportedly fallen by a third. Of those who remain, many are locked in labor disputes: They can't work, but can't leave. These jobless Bangladeshi men can't return home because, as frequently happens, their employers confiscated their visas, effectively leaving them shackled. Living four to a room in a labor camp, they haven't been paid in seven months. They say they live as "ghosts" in a "prison," unacknowledged and unknown.
The World: Flat
The skyline of Dubai, including the Burj Dubai, the tallest building on earth, photographed from the World Islands. Construction of the much-hyped project, an archipelago of 300 man-made islands designed to resemble a world map, helped extend Dubai's 45 miles of natural coastline to 467 miles, enough for everyone to have waterfront property — or so the brochures promised. The site used more than 34 million tons of rock and 320 million cubic meters of sand (making Dubai, oddly, a sand importer). State-owned megadeveloper Nakheel promotes the islands as "a blank canvas for orchestrating your own version of paradise, and where you'll discover that the World really can revolve around you." To some, however, the project represents Dubai's fundamental flaws: overbuilding and poor planning. Despite prices ranging from $20 million to $50 million, the islands are without power or sewer systems. And while 70% of them have already been sold, development has begun on only one.
White-collar workers and foreign laborers alike subsist at the pleasure of the Emiratis — necessary one day, expendable the next. Hendrick and Kayla, from South Africa, had been living in Dubai for six years. At the time this photo was taken, Kayla had recently been laid off and Hendrick hadn't been paid in months. After exhausting their savings to pay the mortgage on an apartment that had lost 40% of its value, they were left with no choice but to go home. "No one ever said, 'Do you know that if you lose your job, or can't pay your mortgage, you'll have to go to jail?' " Kayla says. "We had to flee the country with our tails between our legs, as if we'd done something terribly wrong."
A Sinking Feeling
A sick palm outside an empty villa on the Palm Jumeirah, a man-made island shaped like a 3-mile-long palm tree. Villa price tags have fallen to $2 million from $5 million, and many sit vacant. Real estate agent James Fox explains that in the overheated market, investors looking to flip properties often purchased houses before they were built; when the unregulated real estate market crashed, some were left with nothing but plots of sand. As anger grew, rumors spread that the island was sinking under the stress of traffic and overbuilding. Fox sees the real estate collapse as "a necessary correction of the market."
As expats take flight, indebted and disillusioned, they leave behind relics of their former lives: new cars, left to accumulate dust and the comments of passersby. The government will not release numbers, but it's estimated that more than 3,000 abandoned cars have been found in 2009, many with keys in the ignition, an apology note on the windshield, or maxed-out credit cards in the glove compartment. Dubai once seemed like a sure thing. But as one departing expat notes, "At the end of the day, it's not our country. So if we're made redundant, we have to go home."
When Dubai upgraded its waste-disposal infrastructure some years ago, it failed to anticipate the population explosion. Today, large swathes of the city have no sewage connections, so it is collected by hundreds of trucks and ferried into the desert to Dubai's only sewage repository, 35 miles outside city limits. During the boom, the trip took as long as 17 hours (depopulation has since cut that time), and it became routine for drivers to short-circuit the process by dumping into drainpipes along the way, sending the waste flowing back to Dubai to reappear on its upscale beaches.
A version of this article appeared in the September 2009 issue of Fast Company magazine.