World Expo 2020 and Financial Losses in Dubai | Free Essay Example

World Expo 2020 and Financial Losses in Dubai

Words: 588
Topic: Business & Economics
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World Expo is regarded as an important international venue similar to the Olympics. This world exhibition is aimed at exhibiting products, trade, and innovation that can help the humanity address the major challenges it is facing (“In Depth”). The first world exhibition took place in the middle of the 19th century, and these events have also been seen as platforms for the development of proper communication and collaboration between nations. The exhibition lasts for six months, and it is often a showcase of the host country (Jones). World Expo 2020 will be held in Dubai, the renowned financial hub of the Middle East. The venue will be held in a 438-hectar site near Dubai that is expected to be another remarkable touristic attraction of the emirate. The majority of people focus on numerous benefits associated with the world exhibition, but the event is likely to result in significant financial losses for Dubai.

This emirate concentrates on the development of such segments as tourism and real-estate. Dubai’s officials stress that the emirate will benefit from hosting World Expo 2020 as the event will be associated with the significant development of the infrastructure (Jones). At the same time, it is necessary to remember that this development will require substantial funds that are quite scarce during the period of low oil prices. The country’s economy is not totally reliant on oil prices, but the impact is still rather considerable (Jones). The development of the infrastructure can be a substantial burden for the emirate’s economy.

It is expected that 33 million visitors will come to World Expo 2020, which is associated with the development of the country’s hospitality industry. Nevertheless, the investment is often incompatible with the revenue. For instance, Expo 2010 Shanghai could be regarded as an illustration of financial losses associated with hosting the world exhibition (“In Depth”). The event was characterized by an unprecedented number of visitors as 73 million people came to Expo 2010 Shanghai. However, the total budget of the venue was 18 billion yuan while the revenue was slightly over 13 billion yuan (“In Depth”). Therefore, the number of visitors does not translate into the expected revenue. Some analysts fear that the number of visitors will be lower than expected as the world exhibition has lost its high ranking and became less popular than the World Cup or the Olympics (Jones). Thus, the Emirate of Dubai may experience an oversupply of hotels and transport infrastructure. Furthermore, analysts expect that the event will leverage the development of the real-estate sector (Jones). However, it is also clear that the real-estate prices have already reached quite a high level that can lead to the development of a bubble that, in its turn, can result in another financial crisis (“Amid fears of more bubble trouble”).

On balance, it is possible to note that Expo 2020 Dubai is likely to become a risky undertaking associated with significant financial losses. Emiratis expect that the world exhibition will be an impetus for further economic growth through the development of infrastructure, the attraction of visitors, and the development of the real-estate segment. However, it is necessary to consider possible negative outcomes. Dubai should make sure that the investment will not be excessive as the money may be lost. Many Emiratis tend to have a very optimistic view of the event, but it is time to be more realistic. Making people aware of the culture of the United Arab Emirates is essential, but it should be characterized by thoughtful preparation and responsible allocation of funds.

Works Cited

“Amid Fears of More Bubble Trouble, Who’d Buy in Dubai?” BBC, 2015. Web.

“In Depth: What to Expect from Dubai Expo 2020.” Dubai Chronicle, 2017, Web.

Jones, Rory. “What Does Hosting World Expo 2020 Mean for Dubai.” The Wall Street Journal, 2013, Web.