Our fears have been confirmed. Now, even after using all our senses and twisted logical methods we couldn't mask the truth. Dubai now, is officially affected as every other part of the world by the Credit Crunch!
Nakheel, a government-owned developer, and one of the most innovative and daring real estate developers has decided to cut its workforce by 15%. 500 employees were told today that their services are no longer required. Now, what you decided to make of that is your choice, but I for one, will hold dearly to my job! I think the days of job-jumping and double digit salary hikes are over. It will be interesting to see how the government will go about applying the planned VAT tax, and their initial promise of introducing it at a low rate of 2.5%.
The matter of the fact is that Dubai is not going to collapse. Simply because the economy here is diversified. But the question will be, how capable is the city of showing the rate of growth it showed up till now in the future?! Another interesting question is how strong will the Domino effect be?! Nakheel, Damac and the rest of real estate companies in Dubai offered some of the best paying jobs in the country. Along with that comes a strong purchasing power, so how will those who found themselves suddenly with no jobs react to the situation in term of spending, and how will that affect all the consumer-driven businesses in the country? It is wise to assume that a lot of people will be watching their bills from now on, and unnecessary and lavish spending practices will be re-visited.
What will be the next step? I think we have to sit and watch!