Diriyah Gate, UAE banks, migrant workers in the Gulf

The construction of the new Diriyah Gate tourist development in Saudi Arabia started in the past couple of weeks, but the plan raises concerns that the authorities are repeating their past mistakes with other megaprojects and diverting resources away from areas that will play a more important role in diversifying the economy. Elsewhere, comments from the UAE’s central bank governor that the country’s banks can withstand shocks of any size were extremely sanguine. While a banking crisis seems unlikely, the current downturn will result in stress on banks’ balance sheets that will ultimately hold back the economic recovery.