One aspect of the current crisis that hasn’t been mentioned is the level of credit card debt among the Locals, even before Dubai’s financial meltdown occurred. I had a friend who was quite senior in one of the major banks in Dubai who quoted me the figures of how much the average Local owed on his credit card (or more correctly, in most cases, credit cards).
I can’t recall the figure, but it was staggering – an amount that the vast majority of them would never be able to repay given the interest rates that most of those cards attract. The banks just sat back raking in the (substantial) minimum monthly repayments. (And from what he said, even in those good times, the number who didn’t even keep up the minimum monthly payments was not inconsiderable.)
To a far lesser degree, the same problem exists among the expat population, particularly amongst the young single Western females (and also many of the males), who have to have the latest model of everything and have it now to keep up the Dubai Dream. (If you’re an EK pilot, as an experiment, ask the L1 on your next trip [if you’re game] what her credit card balance is and you might be surprised.) Quite a few EK cabin crew remain in Dubai only because they’re trying to pay off their credit card bill. But suggest to any of them that they take to their card with a pair of scissors and see what answer you get!
Which leads me to the question: how is this debt, particularly with the Locals, ever to be repaid, particularly if the Golden Goose stops ‘laying’ all those nice public sector jobs and very generous pensions, which it may well do?