According to experts, a short-term escalation is unlikely to force the majority of 90% of the foreign population to leave the country. Low taxes, high security, high-quality housing and infrastructure remain strong arguments in favor of the UAE. In recent years, the authorities have deliberately changed the "social contract" with expats, introducing "golden visas" and allowing full ownership of businesses in order to turn the country into a permanent home for talented people from abroad.
Nevertheless, the war has already made adjustments: banks and hedge funds have activated emergency plans, airlines are changing routes, and Dubai stock indexes have sagged under pressure from developers.
The real estate market, overheated by the previous growth, has come to a pause: buyers and sellers have taken a wait-and-see attitude, although interest in transactions remains.
In the event of a protracted conflict, stability can be seriously tested. Some wealthy Asian families are already reviewing their plans for the region. However, the UAE's key advantage is the mobility of capital and labor, which can also be a plus: as soon as tensions subside, the same factors can quickly bring those who have left back.
Market veterans who have survived crises from the Gulf War to the pandemic remain confident. According to them, each crisis proved one thing: the sustainability of the region is important. For now, daily life in Dubai continues as usual, and major deals, such as the purchase of an American energy company by a consortium with Qatar's participation, are taking place despite the escalation.
However, analytics show that the longer the fighting lasts, the more they begin to slow down activity in mergers and acquisitions. The oil situation above $100 per barrel and the blocking of the Strait of Hormuz add to uncertainty, threatening the global economy with inflation and slowing growth, which could eventually affect investor sentiment in the Persian Gulf region.
Source: Bloomberg
