Rampant consumerism in the United Arab Emirates -- home to Dubai, the self-styled capital of conspicuous consumption -- could damage the economy and hinder the Gulf oil producer's efforts to become self-reliant, a government report said.
..."The expansion of consumer spending at the expense of savings and investments has, and will continue to have, adverse effects on the local economy," the department said.
"This alarming consumption rate could, in the future, constitute a big hurdle in the face of any plans to transform the country from being a consuming to a producing nation."
In Abu Dhabi, the UAE capital, families spend about 60 percent of their monthly salaries, according to a survey conducted last year, the department said.
Should we be worried that the U.S. was not as vigilante in these matters? Consumer spending definitely blew well past 60% of income, that is certain.
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With oil near record highs, the Persian Gulf is awash in cash, stimulating a return to some very conspicuous consumption.
Ferrari S.p.A. says sales in the Middle East leapt 32% last year. BMW Group's Rolls-Royce Motor Cars says the UAE, a country with a population of just 4.6 million, is now one of its top five global markets. All those expensive cars clogging the roads have given rise to another must-have status symbol: a prestigious license-plate number.
"Everyone has a nice watch, a nice car," says Abdullah Al-Mannaei, organizer of the city government's monthly auction of desirable numbers. "It's not enough to just have a Ferrari anymore."
Hundreds of men in starched robes descend on an opulent hotel here to vie for the most distinguished digits. Earlier this year, Abu Dhabi businessman Saeed Khouri made headlines and the Guinness Book of World Records when he paid $14 million for the tag simply sporting a "1." (The auction can be viewed on YouTube.) His cousin, stockbroker Talal Khouri, paid $9 million for "5" -- the second-largest sum ever paid for a license plate.
-via WSJ
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