Fearing jail, thousands of laid-off migrants flee Dubai

Dubai: Now, like many of the foreign workers who make up 90% of the population here, has been laid off and faces the prospect of being forced to leave this Persian Gulf city —or worse.

With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills).

Some are said to have maxedout credit cards inside and notes of apology taped to the windshield.
The government says the real number is much lower. But the stories contain at least a grain of truth: jobless people here lose their work visas and then must leave the country within a month.

That in turn reduces spending, creates housing vacancies and lowers real estate prices, in a downward spiral that has left Dubai looking like a ghost town. No one knows how bad things have become, though it is clear that tens of thousands have left, real estate prices have crashed and scores of Dubai’s construction projects have been suspended or cancelled.

Instead of moving toward greater transparency, the emirates seem to be moving in the other direction. A new draft media law would make it a crime to damage the country’s reputation or economy, punishable by fines of up to 1 million dirhams. Some say it is already having a chilling effect on reporting about the crisis.

Some things are clear: real estate prices, which rose dramatically during Dubai’s six-year boom, have dropped 30% or more over the past two or three months. Last week, Moody’s Investor’s Service announced that it might downgrade its ratings on six of Dubai’s most prominent stateowned companies, citing a deterioration in the economic outlook.

So many used luxury cars are for sale, they are sometimes sold for 40% less than the asking price two months ago, car dealers say. For many foreigners, Dubai had seemed at first to be a refuge, relatively insulated from the panic that began hitting the rest of the world last autumn.

The Persian Gulf is cushioned by vast oil and gas wealth, and some who lost jobs in New York and London began applying here. But Dubai, unlike Abu Dhabi, Qatar and Saudi Arabia, does not have its own oil, and has built its reputation on real estate, finance and tourism. Now, many expats here talk about Dubai as though it were a con game all along.