Dubai bets billions that Expo 2020 won't be a desert mirage

Dubai spends billions building a new city in its vast desert for Expo 2020, but can it boost the city-state's sagging economy?

ByJON GAMBRELL Associated Press
October 17, 2019, 7:13 AM

DUBAI, United Arab Emirates -- It rises out of what were once rolling sand dunes stretching toward the horizon, a feverish construction site by tempo and temperature that has tens of thousands of workers building what looks like a new city in the desert of Dubai.

This is the site of Expo 2020, a world's fair that will be hosted by a city-state that is already home to the world's tallest building, the busiest airport for international travel, an indoor ski slope and other modern marvels.

Dubai is betting billions of dollars the expo will draw 25 million visitors, encourage business and spur further development of the city.

However, the preparations for Expo 2020 come as Dubai's real estate market show signs of faltering amid global economic woes. Fears of military conflict across the Persian Gulf cloud organizers' sunny projections. And the planning for the event, now a year away, highlights the contradictions of Dubai and the wider United Arab Emirates, a nation governed by hereditary rulers, wildly enriched by its oil reserves and built by foreign laborers.

"We can only again invite, we can only be open, we can only facilitate, we can only give discounts to incentivize them to come," said Tarek Oliveira Shayya, a board director for Expo 2020 and its chief spokesman. "The response, however, will come from them."

At the center of the Expo 2020 site is the Al Wasl Dome, a 65-meter-high (213-foot) structure that will see videos and designs projected across it. Its Sustainability Pavilion will be covered in solar panels and surrounded by similarly paneled "energy trees" to make it a zero-energy structure.

All told, construction costs around the event are estimated at $7 billion.

"We are building a city," Shayya said. "We are not building an Expo site. We are building a city and it's a city that is going to be one of the smartest cities in the world."

While estimating Expo 2020 will account for as much as 2.5% of Dubai's gross domestic product during its 6-month run starting Oct. 20, 2020, even the government-backed bank Emirates NBD has warned that world's fairs "have also resulted in higher than expected costs, increased debt for host cities, 'white elephants' and abandoned buildings."

Real estate speculation and the Great Recession helped drag down Dubai's economy in 2009. A sharp drop in oil prices in 2014 also hurt its economy, as has tension between the U.S. and Iran and the war in Yemen.

Dubai's real estate market, which has been a major economic driver since it allowed foreigners to own property beginning in 2002, has seen its value drop by a third since their 2014 peak. While apartments, villas and office space stand empty, even more properties are due to come onto the market in the coming years, sparking enough alarm for Dubai's government to set up a commission to come up with ways of heading off the problem.

Expo officials point out that the German industrial conglomerate Siemens plans to open an office at the site after the expo closes. They believe other businesses, drawn by the expo, will follow suit.

Success for the event may also hinge on events beyond Dubai's control. Flights out of the country already swing wide around the Strait of Hormuz, the mouth of the Persian Gulf, because of U.S.-Iranian tensions. Yemen's Houthi rebels, whom the UAE has been battling in a Saudi-led coalition for years, have repeatedly threatened to target the country.

Yet Expo 2020 officials say their event will be "apolitical." Iran will take part, officials say. Qatar, the energy-rich nation that the UAE and three other Arab countries have been boycotting over a political dispute since 2017, has been invited, and discussions are under way, said David Bishop, an Expo 2020 spokesman. Also taking part is Israel, which Gulf Arab countries don't recognize in protest against its occupation of territory Palestinians claim for a future state.

Construction continues unabated. Parts of the UAE's pavilion, which will look like a falcon in flight, and Saudi Arabia's exhibition, which will resemble a window looking up to the sky, are up. Others have begun construction under the relentless heat and humidity of Dubai, where temperatures can go over 45 degrees Celsius (113 degrees Fahrenheit) in the summer.

Two workers have been killed on the site, and there have been 43 other "serious incidents" resulting in injuries, said Rob Cooling, the vice president of safety and environment at Expo 2020. That's over the course of some 140 million man-hours of labor expended so far, he said.

"When these incidents happen they are absolutely tragic, but they are subject to a very, very detailed, thorough independent investigation," Cooling said.

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