In talk with Morgenland magazine, No. 87: Ernst Munk on the Situation of the Nation and the ongoing Struggle against the Super Recession.

With superlatives as the Burj Khalifa the UAE and with Dubai people should keep in mind that the competition from abroad will raise the question, if other future projects of this desert state will be going up as quickly as this one did or if the Worldwide Economic Disaster will have an influence as to the finance of such projects. That these questions are being asked provocatively is normal. However, the reply is very clear: Everything that is required in the next decade to be and to remain one of the most modern countries of the world is nearly finished. Dubai is able to reduce the investment volumes and speed of construction without loosing the inertia on innovation.

It may be that on account of the Super Recession and the Virus of Insolvency some investment volumes may be rescinded and construction plans, which in Europe would utopia anyway, may be extended. This, however, would only mean an adjustment to the economic realities that all Nations have befallen. But innovation and growth will continue to be the trade mark of the UAE and Dubai.

New remedial designs will be introduced and together with existing and planned infrastructures will again lead to production and economic added value.

Then Dubai will come out of the crisis with strength, while other National Economies will be tied up trying to heal their own economic wounds. Unfortunately Germany cannot be excluded from these, and we can only hope that the new government will use the right means for a restructuring. The Power of Innovation and the will to go forward in Dubai is so strong that the present Crisis cannot stop Dubai’s forward motion.

“The Ones declared dead, live longer”. The weights are shifting in favour of the Arabian Economic Area and the UAE.

The headlines of the Western Media about the Super Projects in Dubai are only delivering distorted pictures of the reality. The slogan of an Economic Miracle built on Sand is only the expression of the fear that the times of Economical Miracles in Europe are irrevocably over. Nothing shows this better than the opening of the Burj Khalifa: Difficulties are there to be overcome. Dubai did again demonstrate this ability.

Dubai did overcome a lot of difficulties. But in the sense of superior leadership Dubai gave the world an example: Billions of US$ investment for the Burj Khalifa, and showing up all the critics.

It appears, as if the horror news about the allegoric reports of slowing down capital streams is like a balm for the stressed American and European souls. According to a rather peculiar interpretation of fairness by some journalists in the USA and Europe, all Nations should have been hit by the scarce capital situation in the same way. It does not for Dubai. The truth is that the USA and Germany have been hit far harder by the self-inflicted crisis than e.g. China, India, or the UAE with Dubai. In the USA the degree of debt is 136% of the annual economic performance and after the bail out it is 350 – 400% (according to estimates), in Europe – different from country to country – 50% to 100%. Compared with these figures the UAE debt figures are minute and a finance-mathematical interpretation on a nation by nation scale will show Dubai in the upper third. How about California by comparison? Also to be considered are the facts that the speculative investments in Real Estate- and Financial Investments are not debts of the UAE or Dubai, but those of US and European banks.

In the USA, after the crash of Lehman Brothers, 140 banks had to close and disappeared permanently from the scene. For 2010 not only the USA expect a further peak in bank collapses.

The bottom of the bank defaults in the USA is not even in sight. The fall out of the American and European money destruction have also hurt the UAE and Dubai, but have not shaken it. But now the consequences of the irresponsible fiscal policy are coming home to roost to the countries of inventors or better perpetrators, New York, Tokyo, London and unfortunately Frankfurt.