He does not know it, but Babu Sassi, a fearless young man from Kerala in southern India, is the cult hero of Dubai’s army of construction workers.
Known as the “Indian on top of the world”, Mr Sassi is the crane operator at the tallest building on earth – the 819m Burj Dubai. Sassi’s office, the cramped crane cab precariously perched on top of the Burj, is also his home – apparently it takes too long to come down to ground level each day to make it worthwhile.
In his absence, stories about his daily dalliance with death are discussed in revered terms by Dubai’s workers. Some say he has been up there for over a year, others whisper that he’s paid 30,000Dh (£5,300) a month compared with the average wage of 800Dh (£140) per month. All agree he’s worth it. One chat room post said: “[Sassi] must be a real expert at cranes or totally insane.”
A similar debate about the boundary between genius and danger is being asked of the reason for the Burj itself and of what it represents, Dubai’s property market and its booming economy.
For the past 10 years, Dubai’s implementation of the biggest and most ambitious building programme ever undertaken has stunned the world.
In transforming a forbidding desert into a vibrant city of skyscrapers, Dubai has also bagged several world records: the highest building; the biggest man-made islands, the Palm Jumeirah and the World islands; the biggest shopping mall, the Dubai Mall; the biggest indoor ski area, Ski Dubai; and the greatest number of seven-star hotels. There are more records in the pipeline - the even bigger Universe islands, the 1km-high Nakheel Tower and the QE2, the ocean liner that arrived last week to become a luxury hotel.
All questions about how this growth is being financed have been brushed aside. While the West has suffered, Dubai's extravagance has reached new levels: from its vast Terminal 3 at the international airport, which is due to be redundant when the even bigger Jabel Ali airport is built in 2015, to the $20m launch party of the Atlantis hotel two weeks ago.
But in recent weeks the cracks in Dubai's economy have become undeniable. Property prices have slumped, demand has dried up and, for the first time, the emirate is being forced to consider calling a halt to its expansion. Some analysts are claiming that Dubai could implode, weighed down under a pile of debt and, given that it has relatively small oil reserves, no obvious way of paying for it. One said: "This has been the most spectacular spending mission on Earth. But it's a mirage. If complex debt structures have brought the financial world to its knees, Dubai is the world's biggest toxic timebomb."
The possibility is absorbing Western firms. The Middle East, floating on a magic carpet of vast oil and gas reserves, was supposed to be the oasis in the global financial chaos. The hopes of the financial system, most obviously the banks, have been pinned on securing cash injections from the Middle East, while hundreds of thousands of City workers are looking to the region for new jobs. If Dubai can't pay its debts, much of which is owed to international banks, the emirate could turn from potential saviour to yet another big problem.
Last week, at Dubai International Financial Centre (DIFC) Week, a series of international business conferences, Dubai's authorities scrambled to address the mounting speculation by unveiling for the first time details about its financial position.
Mohammed Ali Alabbar, a member of Dubai's executive council and chairman of Emaar Properties, which owns the Burj Dubai among other landmarks, said the emirate's borrowings amounted to $80bn against assets of about $350bn. He insisted: "The government can and will meet all its obligations."
While admitting for the first time that the Gulf was not immune to the global downturn, Dubai and its oil-rich neighbour Abu Dhabi unveiled a series of initiatives designed to tackle the dangers head-on.
Mr Alabbar announced that a special council had been established to look at each sector of the economy, in particular the crucial property market. The Advisory Council has been tasked with reporting in detail the state of the economy to the Ruler Sheikh Mohammed Bin Rashid Al Maktoum. The council members, who include Dubai's top representatives in "government finance, real estate, banking and equity markets", will also have to make proposals and recommendations on managing "the current and future supply of new projects onto the market".
Mr Alabbar said: "We will formulate recommendations based on our findings, which will then be submitted to the government for action and implementation. We will act in a timely manner, and we will be transparent in those actions."
The most dramatic development was the announcement of the UAE's own bail-out programme. Last Sunday, the government said it would merge the Real Estate Bank of the UAE and the country's two largest home finance providers, Amlak Finance and Tamweel, into a single entity called the Emirates Development Bank.
The new bank will receive a cash injection from the federal government, which is based in Abu Dhabi, and become the largest provider of home loans in the UAE.
Also last week, Abu Dhabi said five of its largest companies had launched a home finance company to fill the void left by the implosion of credit at home and abroad.
The new company, Abu Dhabi Finance, is a joint venture between Mubadala Development, Abu Dhabi Commercial Bank, Aldar Properties, Sorouh Real Estate and the Tourism Development and Investment Company. It has DHR500m (£89m) in paid-up capital. It will start by offering mortgages to buyers of properties from the three developers - which account for two-thirds of Abu Dhabi's projects before expanding.
They were dramatic moves but they did not stem the bad news.
On Thursday, Marwan bin Ghalita, chief executive of the Real Estate Regulatory Authority (Rera), told the Dubai-based The National newspaper that some developers had reported up to 40pc of buyers falling behind on their payments where units were sold off-plan by developers before completion or, in some cases, where construction has yet to even begin.
But Mr Ghalita said defaults could climb to 40pc in the off-plan, secondary market for property "if banks do not provide finance and developers do not change payment plans by the end of the year since payments are due". According to Rera, there are 922 residential and commercial property developments in Dubai, of which 479, accounting for 46,000 units, are under construction.
David Eldon, chairman of the DIFC authority, told delegates at DIFC Week: "Dubai does not lack the financial muscle to cover its debt as some rating agencies have said. Moreover, the reality is that the emirate is not built on debt alone.
"The growth has been led by equity finance, and not debt. There is also the need to distinguish between corporate debt and sovereign debt. Unlike the situation in the US or UK, debt here is channelled in financing infrastructure and public utilities that enhance productivity. Dubai has declared it can cover its debt for the next seven quarters. The infrastructure in Dubai is very good, the regulations are sound and there is openness to business. The city has strong economic fundamentals.
"Dubai is not alone - it has the backing of the UAE with the world's largest sovereign wealth fund and huge oil reserves. We've been seeing a softening in property prices and that may not be bad. The market was overheated and a correction is a sign of a mature economy."
Last week, other pillars of Dubai's boom said they expected a slowdown in the immediate future but dismissed any long-term problems.
Noor Sweid, director of Depa, the world's biggest interior contracting company responsible for decking out luxury hotels, including the Atlantis and Burj Dubai, said: "The slowdown in the property boom was inevitable - no one expected it to continue to grow at 100pc a year forever. But for us, we have clear visibility for the next two years in which we expect at least 40pc growth in revenues from the work we already have both in Dubai and
our international operations."
Tim Clark, president of Emirates, Dubai's national airline, said he expected the global financial problems to impact upon the markets for another 18 months. "While the problems have been flushed out, we will work on consolidating our routes rather than opening too many new ones," he said.
But he dismissed speculation that Emirates would not be able to afford the 58 Airbus A380s it has on order. He said: "We have already placed all the A380s and as soon as the new airport is built in 2015 we will probably want the same number again. Dubai's position means we are perfectly placed to serve all the growing economies from Africa to Russia and Asia and beyond."
Anthony Harris, former British ambassador to the UAE, who now works for the insurance subsidiary of Robert Fleming in Dubai, said: "The thing that is misunderstood about Dubai is that it is not dependent on Western economies in the way of Citigroup or AIG, but instead has developed major trade links with Iran, India and China. The property market might have a wobble but, in the long term, the demand from Asia is huge. There are some strong pillars to Dubai's economy. There is no terminal sickness here, in fact the opposite."
By Louise Armitstead http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3536012/Dubai-vows-to-keep-building-despite-global-crisis.htmlUS EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
