A glimpse at the economic scene in the Gulf.

The Gulf. The Oil Boom. The construction frenzy. Swanky new multi-billion dollar cities. Unimaginable prosperity. Equally unthinkable profligacy. Millions of unemployed foreigners finding a job of a lifetime, and going back home with their pot of gold.

These are some of the images that flash through the mind when one thinks of the Gulf. The Arabian Gulf. For long a source of livelihood for millions of unemployed of the world, and also a source of rich pickings for businessmen and traders from around the globe, the Gulf has generated awe, envy, hatred, frustration, etc., in equal amounts.

Is it now time to do a reality check to see where the Gulf stands today in the most severe global recession in decades? With recession hammering the western, especially the American economy out of shape, the repercussions are being felt throughout the world, in varying degrees.

The Gulf, however, has, so far, escaped the worst effects of the recession, though there are certain vulnerable pockets that have taken a beating. For example, the construction industry in the UAE, especially Dubai, has taken a frontal blow to its second most important industry, after oil, with projects worth billions of Dirhams coming to a halt, and several new equally grand projects put on hold.

It is definitely an unreal atmosphere in Dubai today, used as it is to the sights and sounds of construction activity 24/7. Added to it is the obligation to cut back on oil production, that continues to be the number earner of cash, the UAE is expected to record a slower rate of economic growth in the current financial year. On the other hand, Big Brother, Saudi Arabia is expected to continue with its strong show, and in fact, has been acknowledged as the strongest Gulf economy by the World Bank in their recent report, followed by Algeria, surprisingly for many, and then by the UAE.

What the future holds for these economies cannot be predicted with any degree of certainty. However, the fact that these countries have not been affected by the recession as much as the west does signify certain positives in the way these economies are structured, and run.

Especially, the Banking sector in the middle east is considered safe and sound, and not known to indulge in overtly risky products, unlike their American counterparts. Of special significance is the role played by the Islamic Banks, that subscribe, by and large, to an ethical system of investment and accounting. As a matter of fact, those Islamic Banks that had strayed from the original system, have indeed, suffered in the crisis.

All eyes are on the Gulf to see how the region copes with the current crisis, that is expected to last at least for a few more years.

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