USA Sovereign Debt = $11,656 per capita*
UK Sovereign Debt = $12,343 per capita
UAE Sovereign Debt = $9,480 per capita
It seems like some of the recent coverage and commentary about Dubai’s financial situation are being written while smiling a little too widely in their editorial aspect with headlines like Sheikhy Foundations and Dubai Babylon: The glitz, the glamour – and now the gloom. It may be like poking fun at the person ahead of you in line to the gallows as if you were not also in that same line. The words of political statecraft, where officials are focused on national self-interest, are one thing, but in this interconnected world, I don’t see the value in articles of public record picking sides and reveling in the potential woes of other people.
While Dubai’s troubles are serious, they are by no means cataclysmic either and they are not alone in the world. The 3 million barrels of oil that are produced each day by the UAE at $50 per barrel would, in less than a year, equal all of Dubai World’s collective obligations. Sure, 95% of the oil reserves are in Abu Dhabi. But the ties that bind the country together are very strong as the celebrations of today’s 38th National Day attest. In the end, Abu Dhabi and Dubai will not part ways over this matter; they both need each other. It may in fact end up bringing the country closer together.
Anyway, I’m optimistic. While, in my personal opinion, the scale of development as it was conceived prior to 2008 was not sustainable and planned with too much emphasis on impressions, it is all past now. And this moment of pause will perhaps allow the planning of the city to proceed from here on out in a more measured and humanistic scale—one that is more aware of the environment, energy use, history, and universal human needs.
As guests residing here, we feel an affinity to the people and the place so perhaps we are a little biased. But I think that some of the recent coverage of the crisis sit in too lofty a judgement and paint with too broad a brush from outside while lacking an understanding of the more complicated history and context of the place.
Meanwhile, it may benefit the US and the UK to pay closer attention to stories about their own sovereign debt situation and stop using Dubai as a distraction.
*numbers at the top edited to reflect only debt held by foreign interests. It is a little confusing as to how to measure with strict parity. See here and here for more information. The USA total government debt does stand at over 13.4 trillion, but only 3.5 of that is foreign held. I think the numbers are now accurate comparisons. As percent of GDP is also a good measure to compare.