is Dubai is Heading Towards Another Recession | Report

Running Head: IS DUBAI HEADING FOR ANOTHER RECESSION
IS DUBAI HEADING FOR ANOTHER RECESSION
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1IS DUBAI HEADING FOR ANOTHER RECESSION
Table of Contents
Introduction................................................................................................................................2
Aims and Objectives..................................................................................................................2
Literature Review.......................................................................................................................2
Dubai Economy and Recession..............................................................................................2
Dubai Plans on Expo 2020 Expenditure................................................................................4
Plan to Overcome Recession if Arises...................................................................................5
Context.......................................................................................................................................6
Reference....................................................................................................................................8

2IS DUBAI HEADING FOR ANOTHER RECESSION
Introduction
Recession is massive contraction or slowdown in the economic activities. It occurs
when there is major fall in the expenditure. These slowdown in the activities of economy last
for some of the quarters, resulting in completely hindering economy’s growth. In this
circumstances, indicators of economy, for instance profits of corporate, Gross Domestic
Products, employments and another fall (Al Sudain and Arunprasad 2017). It creates mess in
entire economy. Further, the crunch of global liquidity has resulted into affecting most
countries and among those countries, UAE is the highly affected country. This country was
among growing hubs of business in world with its huge acceptance and development of the
different business and culture. Moreover, economic capital of UAE, Dubai was affected
badly by the recession (Al Kaabi 2014). Therefore, this research paper aims to analyze
whether Dubai is heading for another recession.
Aims and Objectives
This paper aims to analyze that whether country Dubai is heading towards another
recession. Hence, the objective of the paper is to analyze damage done to business and
financial market of country. Moreover, analysis will be on plans of Dubai on expenditure of
Expo 2020. Further, the analysis will be on strategy of UAE for gaining the momentum in
overcoming the economic crisis.
Literature Review
Dubai Economy and Recession
During late 2007, when economy of US was going through the worst recession post
war, the globalized economy faced biggest recession ever that was outcome of trade linkage
and increased global interdependence and globalization. Almost all the major developed
countries economies rapidly shriveled, along with various developing countries, who are

3IS DUBAI HEADING FOR ANOTHER RECESSION
trade-dependent that includes UAE with the other major countries such as China and India
(Afaneh 2018). It was believed before spread of global recession that only economy of US
will face economic slowdown. However, in reality Europe and other countries such as China
and India were hit badly, along with UAE that is considered as small developing country with
the high ambition (Alawadi 2019). It was then, there was growth in economy of Dubai at the
alarming rate with the projects estimated approx. $660 billion, until it was hit by recession. In
2009, Dubai announced that it will be freezing debt of $26 billion. It was shock to the world,
as after 2 months there was crash of real estate market (Alajoutsijärvi, Juusola and Lamberg,
2014).
Dubai projects the image of prosperity, with highest world’s tower, artificial islands
and grand commercial centers. This country even as city state, races to court the investor to
bolster flagging economy. In the recent years, vital property, trade and tourism sectors have
been weakened, despite boosting most diverse economy in Gulf region. According to data of
government, the deals of real estate plunged 21.5 % to $60.7b in year 2018, while number of
tourists that visits Dubai has been remained stagnant at approx. 16m in past two years
(Alawadi 2014).
The upheavals of global financial markets as well as ensuring global recession have
adversely and severely affected UAE, especially Dubai with its lack of the oil revenues and
high level of the speculative real estate investment. It was also true for rental market that had
made key gains in past years. Hence, the damages that commenced in 2008, after the crash of
property market has still not able to heal itself (Arshad 2016). Dubai posted its greatest loss
in the jobs in 2018, since global financial crisis decade ago, particularly among high-paying
positions, which have helped to turn desert output into city of the gleaming skyscrapers as
well as three million people in just few decades. This downturn reflects the level of stress in
pillars of the economy of Dubai (Alkaabi 2014).