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Dubai Hotel Offers Free Meal to Credit Crunch Casualties

December 11, 2008 6:22 PM

By LARA SETRAKIAN, ABC News Dubai

We've been cautioned to expect there's no such thing as a free lunch. But in Dubai, the Middle Eastern capital of capitalism, you can get a free dinner.

The one condition is strict: Dubai's Arabian Park Hotel is offering a free upscale dinner for any city resident who's lost his or her job in the economic downturn. Unfortunately for Dubai, layoffs have been in ample supply as the real estate market suffers from the dried-up credit markets and wealth destruction of the past few months. State-owned developers including Nakheel, makers of Dubai's Palm Island and Atlantis Hotel, have laid off hundreds of employees. Last month the offices of Morgan Stanley and Goldman Sachs trimmed 10 percent of their local labor forces.

Downsizing is natural in a downturn. But in the Middle East the cuts come as a shock -- layoffs are a rare concept in this region of family-owned businesses and swollen public sectors. Laid-off personnel tend to take the news personally, in part because they can lose more than their jobs. For most people residency visas come from employers, so those who lose jobs have little time to find new employment before having to leave the country.

There are real assets in Dubai -- world-class businesses like Emirates Airlines, DP World and Jumeirah Hotels -- assets that should help the emirate bounce back from the global slump. Meanwhile, Dubai's downturn could well be circular: slow real estate demand leads to layoffs and the forced exit of expat workers, which further drags down demand for real estate. 

But before they leave town, at least they're entitled to a free meal.

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December 11, 2008 in Lara Setrakian | Permalink | User Comments (1)

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Posted by: Huh | Dec 12, 2008 10:24:19 AM

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