In U.A.E, Weakened Dollar Slows Dubai Tower's Race to the Skies

The U.S. dollar's fall has triggered wage strikes from foreign workers, shown at the foot of Burj Dubai skyscraper.
The U.S. dollar's fall has triggered wage strikes from foreign workers, shown at the foot of Burj Dubai skyscraper. (By Ellen Knickmeyer -- The Washington Post)
By Ellen Knickmeyer
Washington Post Foreign Service
Friday, December 7, 2007

DUBAI, United Arab Emirates -- The foreign workers building the Burj Dubai skyscraper average up to a new floor every three days as developers race to raise the tallest structure mankind has ever built.

In the four years that it has taken laborers to climb more than 150 floors over Dubai's congested freeways and skyline, the U.S. dollar has fallen with equal steadiness. Its decline has helped trigger unprecedented wage strikes and a rock-throwing protest this fall by the foreign construction workers, who are paid in local currencies pegged to the dollar.

For the Arab builders and business leaders rushing to convert the temporary boon of Dubai's oil reserves into lasting prosperity, U.S. policymakers and consumers have committed one of the few unforgivable sins in this desert boom town: They've slowed the building down.

"We don't want the United States to fail, but we don't want to go under with them," said Yasar Narrar, a strategy adviser to the executive office of the ruler of Dubai, Sheik Mohammed bin Rashid al-Maktum. Dubai is one of seven states in the United Arab Emirates.

Last month, the Emirates became one of the first Arab countries in the Persian Gulf to declare the dollar's fall a crisis. Local currencies' peg to the dollar was hindering growth and squandering the opportunities presented by $99-a-barrel oil, said Sultan Nasser al-Suweidi, the governor of the Emirates' central bank. He urged that the rest of the gulf states follow the example of Kuwait, which switched its peg from the dollar to various currencies in May.

Saudi Arabia, the gulf's wealthiest kingdom and its strongest supporter of the dollar, squelched calls for a change in currency policy at a summit of gulf leaders this week. But pressure continues on gulf governments to lessen the region's link to the dollar.

The Emirates is in the midst of a $60 billion frenzy of construction projects, according to government figures. Projects include not only buildings and roads but manmade islands in the gulf that are shaped like palm trees and the globe and are dotted with villas, beaches and golf courses for the world's wealthy.

To build and tend their kingdom, the Emirates' 800,000 citizens imported millions of foreign workers, including 700,000 construction workers. Nearly one in five people in the kingdom is a construction worker; most are from India.

As recently as last month, some construction workers on the Burj Dubai and other projects made the equivalent of as little as $109 a month. Back home in India, where the dollar has fallen 14 percent against the rupee in the past 18 months, remittances that workers here sent to their families steadily lost value.

"I work here, and I can't save anything. I'll ruin my family," said Ram Chandra, 33, a mason from the north Indian state of Rajasthan.

Chandra spoke in Sonapur, outside Dubai. Though its name means "City of Gold" in Hindi, Sonapur is a bleak, sand-blown labor camp housing 50,000 construction workers. Men sleep 10 to 12 to a room in tightly packed rows of concrete barracks. Chandra sat with four other workers perched on cots or squatting on the concrete floor. They wore sleeveless T-shirts and shorts or faded towels worn like the wraparound dhoti skirts commonly found in India.

Other barracks had laundry strung from bare beams. A sewage tanker made its evening rounds of the camp's septic tanks, filling the air with a gurgle and reek.

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