For over 1 ½ years I’ve been warning about the imminent collapse of Dubai’s real estate market and inevitably the bursting of the bubble of its Dubai World Sovereign Wealth Fund; the richest of its kind in the world. Close to ½ Trillion USD worth of real estate projects have been canceled since last fall’s Cityscape exhibit in Dubai. The world has never seen anything as blatantly speculative as this Exhibit in its claims to have the demands to build whole new cities. One’s better judgment is clouded by the impression that in the Middle East, oil money doesn’t follow the same metrics as hard-earned money of yester years…. And who are we, the Western World on steroid to give the Sheikh prudent advice on HOW to bring Western modernity (ORDER – ENTERPRISE value system)) that’s hundreds of years in the making to a primarily tribal place of existence (Heavy TRIBAL-FEUDAL vMEME).
Well, the place is collapsing and the Sheikh’s government is scrambling to find and prosecute the people responsible. Apparently, Western businessmen cannot leave the Emirate permanently if they owe money (Dubai’s own interpretation on Islamic Banking). So Dubai’s airport garage fills up every day with hi end automobiles whose owners show their parking receipt and round trip ticket to the policeman at the gate, and leave with millions in debt never to return.
Here’s where Economics Meets Memetics; below is an analysis I made to the Spiral Dynamics Integral community in a heated debate about Dubai’s transformation in July 2008. There’s some reference to the color-coded value systems that are the hallmark of the Spiral Dynamics theory. Wherer appropriate, the descriptive theme of each value system is summed in one word. For a detailed description of the emerging science of value systems, please refer to earlier posts pertaining to the Spiral Dynamics theory and its use and applications
[SD-Integral] RE: Dubai transformation
Here’s my abbreviated Memetic perspective on Dubai:
Dubai is a rare experiment indeed in that it will force all the Spiral wizards to rethink the traditional evolutionary path of a culture. After all, the very idea of taking a nomadic (BEIGE-PURPLE) culture, put it in a time machine, and have it looking ORANGE in one decade is a mad scientist’s dream come true.
Traditional movement up the spiral took hundreds if not thousands of years, and only along the true and tried road did it pick up complexity. Absent BLUE, western ORANGE has downshifted to RED in Dubai. It is this downshift to RED that’s making it OK to condone slavery-like practices and destroy the environment and be clever enough (ORANGE cover/paint) to call it all by different names.
The lip service that developers and the Dubai government are paying to Green Building practices is a tiny drop of GREEN (EGALITARIAN vMEME)in a sea of RED (FEUDAL vMEME) that only waves a banner to those looking at the surface. The LEED certifications and sustainable design of individual buildings will have no effect on the environment unless “sustainable practices” are imbedded in a sustainable urban design scheme (YELLOW: SYSTEMIC vMEME)) that integrates cutting edge urban western design concepts such as the “New Urbanism”, “Design with Nature”, “Neighborhood Continuity” and many other concepts working in an “Integral Design” fashion to assure sustainability. Massive solar farms in a massive desert called the “Empty Quarter” will be good example of the “Design with Nature” concept.
As far as the foreign labor issue, the question is not whether Dubai is providing better wages for laborers, it’s clear that it is. The real question is as people from a higher level of complexity who are building this city-state, do we have any responsibility to pass on the essential elements of healthy BLUE (ORDER vMEME)and ORANGE (ENTERPRISE vMEME) that has symbolized western human struggles and triumphs for the last 1,000 years, or continue our exploitation and let them deal with the collapse when the other shoe drops (The rest of the Middle East is watching and waiting, to say “I told you so”)
Many Westerners who do business with Dubai are not privy to any of the social ills that must be addressed because they do business in an ORANGE bubble. Even the article about sustainability by Ghanem Nuseibeh barely touches on the “cultural” aspects of what ails Dubai. It is very clear to me that Dubai’s RED/Orange considers any BLUE a nuisance, and will continue to do so as long as financial opportunities remain insatiable. The collapse of the Dubai real estate market is inevitable, and this will be the wake-up call that ORANGE needs. When the Sheikh orders a builder to “add another 15 stories” to a structure under construction, who do the owners sue when the supports cave in on the inhabitants of the building? With all the expatriates buying over-inflated real estate, who will they sue when the market collapses? Which institutions, in what court system, and which historic legal precedent will be used for them to make their cases? Can they obtain legal judgments against developers, banks, regulators, the sheikh? Would their legal visa status be rescinded if developments go bankrupt, and if so what happens to their ownership rights?
In brief, this brave experiment is reluctantly allowing BLUE in through the back door, and only when this RED/Orange, through necessity, has to downshift to deal with its own damage control would BLUE truly surface. If its introduced swiftly and prudently it won’t take the rest of the Middle East down with it and we can all point at it and say it’s in a slightly better place than it was before the start of this experiment. And we’ll all be glad for it as the rest of the Middle East learns what not to do in its movement away from tribal PURPLE/RED.