World Expo 2020 May Turn Dubai into Favourite Tourist Haunt

There is every possibility that an international meeting in Paris next month may trigger billions of dollars of fresh investment in Dubai. And, if plans are not handled carefully (and this is a big if) the move may contribute to the kind of boom-and-bust cycle which nearly bankrupted the Emirate four years ago.

Dubai is in the race with Izmir in Turkey, Sao Paulo in Brazil and Yekaterinburg in Russia for the right to host the 2020 World Expo. A vote of the 167 member states of the Paris-based Bureau International des Expositions is expected to choose among them at an assembly on Nov. 26-27.

Holding the world’s fair would be a defining moment for Dubai, marking the transformation of the Emirate of 2.2 million people into a top global centre for tourism, trade and finance.

But it would carry a risk. Anticipation of a spike in demand due to the World Expo could cause property developers to build too many residential and commercial projects, and investors to pour too much money into them, inflating a speculative bubble that would eventually burst.

Such a bubble popped in 2008-2010, when the global financial crisis caused Dubai property prices to
crash by more than 50 percent, shaking financial markets around the world.

“If Dubai wins the World Expo 2020 bid, we will witness another boom in the property market,” said Khalid Kalban, chief executive of Dubai-listed property developer Union Properties

“Hopefully this will be a planned boom rather than a speculative one, which we saw before,” he said.