The US-Israeli war on Iran is in its fifth week, and as the conflict continues, the entire Middle East is paying the price. Dubai, the crown jewel of the Middle East, is also caught in the crossfire like the rest of the Gulf region, in a war that has nothing to do with them.
Iran, just like it had repeatedly warned the US and Israel, launched missiles and drones at US bases across the Middle East on February 28, hours after Washington and Jerusalem launched airstrikes on Tehran.
Dubai paid the price of US-Iran war
In the hours and days that followed, social media was full of videos showing Iranian projectiles over the skies of the UAE, Kuwait, Saudi Arabia, and more. The closure of the airspace across the wider Middle East has resulted in millions, including tourists and transiting flyers, getting stranded in airports for days.
‘Dubai is done’
For many expats, especially Westerners, this was the end of their Dubai dream, and they were convinced that ‘Dubai is done’. In the days that followed, social media continued to debate if Dubai, one of the most vibrant cities in the world, would ever recover from the ‘reputational damage’ the war had caused.
Dubai will bounce back
But, according to Anis Sajan, Vice Chairman of Dubai-based Danube Group, the city is by far the safest in the Middle East, and he expressed confidence that, just like post-COVID recovery, Dubai will come out of this conflict stronger.
“This war, which is between the US, Israel, and Iran, is of no fault of any country in the Middle East, which is being attacked by Iran, in the name of American bases. But, I believe that sooner than later, things will be sorted out and things will comeback to normal. And knowing Dubai, I know it will bounce back, as it has done in the past,” Sajan told LiveMint.
What US-Iran war did to Duabi’s economy
Since the start of the conflict, tens of thousands of expats, including high-net-worth individuals and tourists, have left Dubai, with some reports suggesting a significant emptying of the city’s non-native population.
According to some estimates, the Iranian missile and drone attacks have had a devastating impact on Dubai’s economy, with its prized tourism sector taking the biggest hit.
“The hospitality and tourism sector has been affected the most. Because tourists have not been coming here, due to safety concerns, which is expected,” Sajan said.
‘Not business as usual’
As the conflict continues, Sajan, whose Danube Group employs around 6,000 people across the UAE and the wider Middle East, admitted that there are some concerns among the business community.
“The business perception is a little down, the sentiments are low, and the emotions are high. So, obviously, business is not going to be the same, which is normal,” he said.
Dubai still an attractive investment destination
The war has wiped out over $120 billion from the UAE stock markets, and the regional instability is making many who had plans to move to Dubai or invest there think again. Sajan, however, said the fundamentals of key sectors remain unaffected.
“If you are looking to invest in Dubai, especially in real estate, once the war is over, I wouldn’t ask anybody to hold back. Because you might get a good deal, as there could be others who want to leave Dubai. So if you are looking to invest, this is the right time to do it,” he said.
- Dubai’s economy, particularly real estate, remains resilient despite the current conflict.
- The war has led to a temporary exodus of expats, but opportunities for investment may arise as the market stabilizes.
- Historical patterns suggest that Dubai has the ability to recover quickly from crises.
