A Towering Inferno-00-7272

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But is the Burj Khalifa really the world's highest man-made phenomenon? Perhaps the mountain of debt upon which Dubai based its expedient transformation from a barren pearl-trading port into a world renowned business hub surpasses any self-aggrandising monument. Excessive credit, overconfidence and a culture of ostentation are all arguably culpable for the recent downfall of Dubai's once thriving construction industry.

Many critics argue that the Dubai's ruler, Mohammed bin Rashid Al Maktoum has succumbed to the ‘edifice complex'; a tendency to construct buildings on a vast scale in order to establish a concrete reminder of their legacy. However, there has always been a striking correlation between the construction of large skyscrapers and economic demise. In the late 1920s the ‘skyscraper boom' in New York fell on the horizon of the Wall Street Crash and the Great Depression. The Empire State building in particular, which was completed in 1929, did not achieve full occupancy for another forty years later. The Sears Tower in Chicago was conceived in the run-up to the oil crisis and stagflation in the USA. ...
... In addition, the Petronas Towers in Kuala Lumpur coincided with the Asian financial crisis in 1997. Could the Burj Khalifa be yet another example of this notable ancestral flaw? Dubai has stamped its name on the register of the world's elite business hubs, but for how long?

New money has always been expressed in architectural height. In short, skyscrapers are ...the physical embodiment of irrational exuberance in the markets. ‘Irrational exuberance' finally caught up with the Emirate state in November 2009. Dubai World, the holding company for construction giants such as Nakheel and Limitless, requested a six month standstill on its £35 billion debt pile whilst they attempted to restructure the business. This announcement sent shockwaves through the world's leading markets, resulting in a 3% fall of the main European stock indexes on the 26 November 2009. Abu Dhabi's $10 billion bailout proved vital to stabilise the economy and prevent a severe default on a crucial $4.1 billion bond issued by Nakheel. Dubai World was sent a lifeline by their oil rich neighbour.

Despite being knee deep in financial turmoil, Dubai World commenced with the extravagant opening ceremony of its very own ‘white elephant'. Newly named as the Burj Khalifa, after its financial rescuer Sheikh Khalifa, the elaborate fireworks and prestigious champagne could not disguise the harsh reality that Dubai's achievements were no longer their own so long as Abu Dhabi was picking up the bill. The only dish on the menu was pride, and it was to be swallowed grudgingly. The practicality of the building itself is a symbol of irrationality. The building uses the equivalent electricity of a small city. Every time someone flushes a toilet on the 100th floor water needs to be pumped 400 meters into the sky. For a city with under two million inhabitants built on a desert with an abundance of land, is there really a need for such a structure?

A large percentage of the city is incomplete, as structural steel frames are left gouging out of desert sand. Furthermore the ratio of buildings-to-occupants is considerably unbalanced. Nicholas Thompson, chief executive of architectural firm Aukett Fitzroy Robinson, stated that firms are likely to bypass Dubai in their search for Middle East work. He said: Dubai is over-provided with buildings the market has had its day. This will inevitably prove detrimental to the recovery of the economy and may signify the end of Dubai's dominance in the commercial property market in the Middle East.

The future of the once ‘self sufficient' Dubai looks bleak. The edifice complex has undoubtedly taken its toll on the Emirate. The lack of transparency has lead to an unbalance between assets and liabilities within Dubai World's subsidiaries thus calling for a re-evaluation and potential sale of the holding company's assets. Projects are clearly overpriced, as investors are willing to pay a premium for a far more expedient completion date. What will lie in the future for Dubai will inevitably be determined by the giving hand of its fellow Emirates.

About the Author:

This article was written by Colin Dunne (an LPC student at the Holborn campus and BPP City Editor) for 'Legal Incite', a BPP Law School student publication.

BPP Law School is a leading http://www.bpplawschool.com/ provider, for both LLB Undergraduate and http://www.bpplawschool.com/programmes/llm/ Masters students. The courses are available in six law schools located in Birmingham, Bristol, Leeds, Manchester and London.