However, in the Gulf, property development is the sector most exposed to the credit crunch, and the one that is most expected to shed more jobs than it already has (Damac fired 200 employees, and Nakheel has cut over 500 jobs). It’s thought that 40 percent loans made by local banks were for residential and commercial development. But banks are now reining back on credit, to rectify the loose lending habits of the past two years.

“Lending conditions are extremely cautious,” says economist Marios Maratheftis of Standard Chartered Bank. “Before, the banks didn’t price in risk. But now, investment in private-sector construction projects will be more expensive. Developers may delay their building, and we might see a fall in demand for unskilled labor. That will mostly affect people from South-East Asia.”

Still, Maratheftis expects job losses to be very limited, because presently there is a shortage of manual labor in the Gulf’s construction industry. Besides, he says, jobs could be created again quickly. “The developers might delay, but they know they can always restart.” He and other economists also expect the governments of Gulf states to step in and buoy their economies by embarking on large-scale infrastructure projects, paying for them not from loans but from their enormous, oil-funded budget surpluses.