Is Dubai a Better Market than Panama?

I noted in a Washington Post article late last year, as in many other journals, the announcement of the world's tallest building, the Burj Dubai. As the Post told us...

Developers of a 1,680-foot skyscraper still under construction in oil-rich Dubai claimed Saturday that it has become the world's tallest building, surpassing Taiwan's Taipei 101 which has dominated the global skyline at 1,667 feet since 2004. The Burj Dubai is expected to be finished by the end of 2008 and its planned final height has been kept secret. The state-owned development company Emaar Properties, one of the main builders in rapidly developing Dubai, said only that the tower would stop somewhere above 2,275 feet. When completed, the skyscraper will feature more than 160 floors, 56 elevators, luxury apartments, boutiques, swimming pools, spas, exclusive corporate suites, Italian fashion designer Giorgio Armani's first hotel, and a 124th floor observation platform.

Very impressive. Indeed, everything about Dubai's real estate market is impressive, even astonishing, and has been for several years. I have spoken with a few people active in global real estate markets who accept that Panama has a "hot" market, but dismiss it as poor in comparison to Dubai. I was not a Latin American specialist when I began my search for a good business environment. I have business experience in the Middle East. Why would I choose Panama over a nation like Dubai? To them, the difference is obvious. The difference is obvious to me too, but a different difference than the one they are talking about.

The profits from a real estate development are not realized in months. Years are required. As a result, security and stability are of great importance. Dubai is a tiny island of modern wealth and "Western style" super-consumption in the midst of an ocean of traditionalism and anti-Western anger. There are assuredly thousands of Middle Eastern residents, probably far more, who see what's happening in Dubai as being decadent and disgusting. Dubai is the epitome of all that these Arab traditionalists hate and wish to drive from their ancestral lands. Should they want to strike out against that which they despise, it will be far easier to do it near home than outside the region. The Burj Dubai is every bit as "symbolic" today as the World Trade Center was in 2001. It is argued that the authorities in Dubai are aware of the potential for a disaster and have their situation under control. The same was said of the Shah of Iran prior to that fateful week in 1979 when it all came crashing down. Should the day come that I see reports of a "terrorist attack" in Dubai, I may be shocked, but I will not be surprised. Dubai is the wrong market for me.

I cannot predict the future any better than anyone else. The future is beyond our ability to predict with any certainty, but common sense assures me that Panama is far more secure and stable than Dubai. It is a good market for business and a good market for me.