Normally oil rich Gulf states are immune to recession, slowdown, deflation type expressions that are often heard in less endowed geographies. Their confidence is built on the edifice of unrelenting demand for oil from all corners of the world. Though there is the occasional cacophony of cleantech, renewable energy and alternative fuels, the fossil fuel monopolised by the Arabian Gulf still remains formidable energy resource.
But there are clear signs that the leadership of Gulf economies is fast fading. Dubai, the glitziest among the GCC, is slipping into a recession. It's overheated property market bubble is about to burst.
Gone are the days when the rest of the Gulf has met Dubai’s phenomenal boom with a mixture of envy and emulation. Now there are hints of pleasure at the idea that the epicentre of bullishness may be humbled. But there are worrying questions for the others, too. Could the Dubai property slump prove contagious? Will the Gulf Co-operation Council pull together to protect the region’s economy? Should its planned monetary union be set aside as governments focus on protecting their own currency?