The Strait of Hormuz blockage is being felt far and wide. While the world struggles with higher pump prices, key energy exporters such as the United Arab Emirates (UAE) and Qatar face severe economic setbacks. In Gulf states serving as air hubs, expats and affluent locals are scrambling for the exit.
The discovery of oil transformed Arabian deserts into rich petro-states. Knowing this wealth would not flow forever, the states leveraged their strategic locations to become air traffic hubs. Emirates and Etihad have emerged as major carriers; Doha’s airport facilities are deemed more impressive than Singapore’s; Qatar Airways is named the world’s best airline on several rankings, beating Cathay Pacific and Singapore Airlines.
Dubai is now among the world’s top 10 container ports – the only one outside East and Southeast Asia. In comparison, Hong Kong has long lost its leading port position, having evolved in its distinctive role within the integrated system of the Greater Bay Area.
Before Art Basel Hong Kong last month, the inaugural Art Basel Qatar was held in early February in Doha. Dubai hotels arguably offer greater luxuries than those in East Asia. Dubai properties attracted East Asian buyers from Shanghai to Singapore. Hong Kong’s low taxation is outmatched by Dubai’s zero taxation.
But the appeal of living no-tax in glamour all comes to naught when there are missiles and drones flying over you – which may land on you at any time.
The Arabian Peninsula is rich in oil but poor in water. The arid land is not endowed with adequate water resources to sustain the international population its modern economies depend upon.If Iran hits the Gulf’s desalination facilities, living in a luxury flat offers little comfort. With the UAE’s survival at stake, the mirage lifts – and we see clearly how fragile the greatest success story in the Middle East always has been.
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