The US-Israeli war against 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 as the rest of the Gulf region in a war that has nothing to do with them.
Iran, as it has 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 the US-Iran war
In the hours and days that followed, social media was filled with videos showing Iranian missiles over the skies of the UAE, Kuwait, Saudi Arabia and others. Airspace closures across the wider Middle East left millions, including tourists and transiting fliers, stranded at airports for days.
‘Dubai is done’
For many expats, especially from the West, 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 whether Dubai, one of the most vibrant cities in the world, would ever recover from the “reputational damage” caused by the war.
Dubai will bounce back
But according to Anis Sajan, vice-chairman of Dubai’s Danube Group, the city is by far the safest in the Middle East and expressed his belief that, just like the recovery from COVID, Dubai will emerge stronger from this conflict.
Read also | Viral video from Dubai airport shows huge queues at arrivals despite war fears
“No country in the Middle East is to blame for this war that is between the US, Israel and Iran, which Iran is attacking in the name of US bases. But I believe that sooner rather than later things will be resolved and things will return to normal. And knowing Dubai, I know that it will return as it was in the past,” Sajan told LiveMint.
What the US-Iran war has done to Dubai’s economy
Tens of thousands of expats, including high net worth individuals and tourists, have left Dubai since the conflict began, with some reports suggesting a significant drain on the city’s indigenous population.
Read also | An Indian couple stuck in Dubai in the middle of a war is looking for help
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.
“Hospitality and tourism sector has been hit the most. Because tourists have not come here due to security concerns, which is expected,” said Sajan.
“Not working as usual”
As the conflict continues, Sajan, whose Danube Group employs around 6,000 people in the UAE and the wider Middle East, admitted there was some concern among the business community.
“Business sentiment is a bit down, sentiment is low and emotions are high. So of course business won’t be the same, which is normal,” he said.
Read also | Dubai shares fall into a bear market as the Iran war enters its third week
Dubai is still an attractive investment destination
The war has wiped more than $120 billion off UAE stock markets, and regional instability is forcing many who planned to move to or invest in Dubai to think again. However, Sajan said the fundamentals of key sectors remain intact.
“If you want to invest in Dubai, especially in real estate, once the war ends, I wouldn’t ask anyone to hold back. Because you can get a good deal because there may be others who want to leave Dubai. So if you want to invest, now is the right time to do it,” he said.
Key things
- Dubai’s economy, particularly real estate, remains resilient despite the current conflict.
- The war has led to a temporary exodus of expats, but investment opportunities may emerge as the market stabilizes.
- Historical patterns suggest that Dubai has the ability to recover quickly from crises.
