Sunday, November 29, 2009

The Dubai Default: A sign that the worst is still not over.

Recession had hit us hard. So much so that even to this day we haven’t been able to say that we have fully come out of it. As if we didn’t have enough, the news of Dubai asking for extra time to pay its debt has shaken all of us. Well everything does come at a price.

Dubai. Images of Dubai are simply breath taking. The scenic view, the architecture, the cleanliness, the big brands, the gold, the world islands, the palm….are simply awesome creations. For an onlooker like me, it simply speaks of overflowing wealth, but one that’s probably well harnessed. I remember watching an article on Discovery channel about the world islands. How it was conceptualised, the planning, the execution, the problems, the work standards were really awe inspiring. Dubai truly speaks or atleast spoke of a success story.

This recent ‘Dubai Default’ as it’s called reminds me of a story my teacher told me years ago when I was in school. We were learning about petroleum and how its extracted to the different stages like destructive distillation, etc. While we were learning about extraction, my teacher told me how one must be careful about one’s greed. You probably are thinking what’s the relation between greed and petroleum extraction. Well when I first heard it even I was taken aback. But later I got the point. When you extract oil you should know how much the oil the well contains. When you know that you should know how much you can extract. It may be unfortunate to know that you cannot extract more that a limit. If you do so, you are given a fitting reply.

It so happened once, a long long time ago, that a few Arabs had lost their way in the desert. As they were walking trying their best to get somewhere they happened to see some black dense fluid oozing out from the ground. On inspection they realized that they had stumbled by an oil well. Those Arabs, filled with excitement settled there and started to supply oil to the nearby areas. Sooner or later, many merchants came to that place. The place started brimming with activity. From a small tribe it grew into a village, a town, a city and into a metro. Many people from far and near came there to do business. As the demand increased so did the pressure on the merchants who invariably put the pressure on the oil well. They kept on extracting. As the resource began to deplete they dug deeper.

One day, the whole city with all its people disappeared. There was no trace of them. No skyscrapers, no structures, nothing. Everything gone. Everything was lost, that too in thin air. Where did all go? Well, as the people extracted more and more, the oil began to deplete creating a vaccum which spread beneath the city. One fine day, the vaccum gave way, and everything came crashing down into the depths of the desert.

The tale of Dubai and of all the nations who have been hit by these financial problems is somewhat similar to this story. Being successful is very good. But success should come through right means and with a pace that’s progressive and not a rampage. Rising to the top by trampling people beneath you is not success.

Unfortunately the world doesn't see that. It doesn't see that the path is important too. We probably have got so much blinded by this charm of being wealthy that we didn’t even see the recession coming. Even if we did we thought it won’t have a major effect. Today unfortunately, so many people are jobless. Some of those are the sole bread winners of their families. It’s heartening to see so many people, some of whom have left their families behind in search for better jobs, are looking endlessly into the future with weary eyes and crest fallen hearts for this recession to end. Unfortunately for them, the Dubai news doesn't sound good. The wait for a better future just gotten longer.

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