Foreigners in Dubai hit by downturn

DUBAI, United Arab Emirates -- Denay and Jesse Vargas met as teenagers, working as lifeguards at the Fiesta Texas water park in their hometown of San Antonio. They fell in love, married at 20 and moved six times while Jesse worked as a manager at amusement parks around the U.S.

Last year, Jesse accepted a job with what promised to be one of biggest amusement parks in the world. He would make almost triple his $80,000 after-tax salary and wouldn't have to pay any income tax. That would help with the couple's medical bills from Denay's unsuccessful attempts to get pregnant.

The catch: It was in Dubai.

The plan: stay a year, maybe two, and make enough money to go home in style.

"We were searching for opportunities. We wanted to move up quickly. We wanted to buy a house and pay off debts," Denay Vargas says. "We figured we could live anywhere for a year."

Now, she admits, they are not sure it was a good idea.

This emirate known for extravagant projects, such as the world's tallest skyscraper and an archipelago of 300 manmade islands shaped like a world map, has been hit by the global recession and a building slowdown.

'A champagne lifestyle'

The American Business Council of Dubai says hundreds of thousands of foreigners over the past six years have been lured to this desert land by the massive construction boom and money to be made — until now.

An increasing number of newcomers like the Vargases are losing their jobs as projects are canceled or put on hold. Once that happens, people can quickly lose their residency visas and the right to stay here.

"There is not one expat get-together where conversation does not turn to this subject," Denay Vargas says, adding that she goes to at least one goodbye party a weekend.

"This place was built on dumb optimism and blind faith. It was all about a champagne lifestyle," explains Alexander McNabb, a British public relations executive who has been here since 1993.

David Hackett, an Irishman who has been in Dubai six years as a production manager for a large construction company, is worried about his job.