Dubai bets billions that Expo 2020 won’t be a desert mirage

It rises out of what were once rolling sand dunes stretching toward horizon, a feverish construction site by tempo and temperature that has tens of thousands of workers building what looks like a new city in desert of Dubai. This is site of Expo 2020, a world’s fair that will be hosted by a city-state that is alrey home to world’s tallest building, busiest airport for international travel, an indoor ski slope and or modern marvels.

Dubai is betting billions of dollars expo will draw 25 million visitors, encour business and spur furr development of city, a place that has been transformed by its ruling Al Maktoum family over deces from a sleepy port of pearl divers and gold smugglers into a world showcase.

However, preparations for Expo 2020 come as Dubai’s real estate market show signs of faltering amid global ecomic woes. Fears of military conflict across Persian Gulf cloud organizers’ sunny projections. And planning for event, w a year away, highlights contrictions of Dubai and wider United Arab Emirates, a nation governed by hereditary rulers, wildly enriched by its oil reserves and built by foreign labourers.

“We can only again invite, we can only be open, we can only facilitate, we can only give discounts to incentivize m to come,” said Tarek Oliveira Shayya, a board director for Expo 2020 and its chief spokesman. “ response, however, will come from m.”

World’s fairs conjure great wonders of engineering, like Paris’ Eiffel Tower for 1889 fair. light bulb and Ferris wheel dazzled those at 1893 fair in Chicago. X-ray followed at Buffalo’s 1901 fair, and Seattle’s Needle opened to visitors at 1962 fair.

But some of se extravaganzas can also turn sour. 1984 world’s fair in New Orleans went bankrupt and required a government bailout. Expo 2000 in Germany drew 18 million visitors, well short of 40 million expected. Milan’s 2015 expo saw rioting over corruption allegations.

While estimating Expo 2020 will account for as much as 2.5% of Dubai’s gross domestic product during its run, government-backed bank Emirates NBD has warned that world’s fairs “have also resulted in higher than expected costs, increased debt for host cities, ‘white elephants’ and abandoned buildings.”

Dubai functions like a company town. Its marquee employers are state-owned Emirates airline, state-backed real estate developers and or government-associated industries. And those industries helped build Burj Khalifa, world’s tallest building at 828 meters (2,717 feet), largest manme harbour at its Jebel Ali port, and manme, frond-shaped Palm Jumeirah archipelago in Persian Gulf.

city’s well-kwn appetite for megaprojects once inspired a 2016 article from satirical website Onion about Dubai building “ world’s first full-scale replica of Dubai, a multibillion-dollar investment kwn as Dubai Experience built on outskirts of city-state.”

At centre of Expo 2020 site is Al Wasl Dome, a 65-meter-high (213-foot) structure that will see videos and designs projected across it. Its Sustainability Pavilion, which recalls towers of New York’s 1964 world’s fair, will be covered in solar panels and surrounded by similarly panelled “energy trees” to make it a zero-energy structure. Construction crews will also build a network of ros and a connection to Dubai’s driverless Metro line.

All told, construction costs around event are estimated at $7 billion.

“We are building a city,” Shayya said. “We are t building an Expo site. We are building a city and it’s a city that is going to be one of smartest cities in world.”

But Dubai will need to incorporate new city into its sprawling real estate market after six-month expo ends on April 10, 2021. And alrey, that market shows signs of trouble.

Real estate speculation and Great Recession helped drag down Dubai’s ecomy in 2009. A sharp drop in oil prices in 2014 also hurt its ecomy, as has tension between U.S. and Iran and war in Yemen.

Dubai’s real estate market, which has been a major ecomic driver since it allowed foreigners to own property beginning in 2002, has seen its value drop by a third since its 2014 peak. Apartments, villas and office stand empty, and more properties are due to come onto market in coming years, sparking eugh alarm for Dubai’s government to set up a commission to come up with ways of heing off problem.

Expo officials point out that German industrial conglomerate Siemens plans to open an office at site after expo closes. y believe or businesses, drawn by expo, will follow suit.

However, uncompleted “white elephant” projects lurk around Dubai, like Palm Jebel Ali, unfinished twin of Palm Jumeirah. A massive amusement park that recently opened near Expo 2020 site reported a loss of $57 million last year and cancelled an expansion. And Al Maktoum International Airport, envisioned to one day take over for Dubai International Airport, has seen repeated delays to its expansion.

Success for event may also hinge on events beyond Dubai’s control. Flights out of country alrey swing wide around Strait of Hormuz, mouth of Persian Gulf, because of U.S.-Iranian tensions. Yemen’s Houthi rebels, whom UAE has been battling in a Saudi-led coalition for years, have repeatedly threatened to target country.

Expo 2020 officials say ir event will be “apolitical.” Iran will take part, officials say. Qatar, energy-rich nation that UAE and three or Arab countries have been boycotting over a political dispute since 2017, has been invited, and discussions are underway, said David Bishop, an Expo 2020 spokesman. Also taking part is Israel, which Gulf Arab countries don’t recognize.

Construction continues unabated. Parts of UAE’s pavilion, which will look like a falcon in flight, and Saudi Arabia’s exhibition, which will resemble a window looking up to sky, are up. Ors have begun construction under relentless heat and humidity of Dubai, where it can go over 45 degrees Celsius (113 degrees Fahrenheit) in summer.

Two workers have been killed on site, and re have been 43 or “serious incidents” resulting in injuries, said Rob Cooley, vice president of safety and environment at Expo 2020. That’s over course of some 140 million man-hours of labour expended so far, he said, as authorities offer training and cooling areas for workers.

“When se incidents happen y are absolutely tragic, but y are subject to a very, very detailed, thorough independent investigation,” Cooley said. “Just to emphasize: At st are we complacent. We’re also always looking to maintain and, in fact, drive continued improvement.”