Tuesday, December 01, 2009

Dubai Debt Crisis

What's my take?

Well.. what is yours?

I have been to Dubai and Fujairah a few years ago. Apart from that, I have seen a lot of photos on the internet. Dubai is the in "grove", whatever that means, lolz.

I have seen the buildings, the tallest building in construction, the Burj Al Arab, the reclaimed palm shape islands, the huge malls etc. They say it is for tourism, real state business, and that many investors are coming in to buy condos, to put up businesses etc.. They want to make Dubai the financial capital of the middle east which it is, IMO.

However, my impression of the construction BOOM is an EXCESS of too much of everything. And it is not, I say NOT, anchored on real economic engines like China's or India's.

I felt, a few years ago, that something was wrong about it - but I just can't pin point which and what was wrong. The PR and media blitz blinded so many. For one, the native population is too small that each native can probably own several dozens of condo units....what with the frenzy of building something and anything here or there - a few months ago. As if money spent all over was bottomless, lolz.



IMO, the problem would persist for years...if not decades to come... so?

I am out!

Some notes from different sources:
Global financial markets were recently rattled by news that Dubai’s main investment arm, Dubai World, was seeking at least a six-month delay on repaying its $60 billion in debt.

Dubai's ruler says the emirate's economy is "strong and solid," despite a financial meltdown in the former Arab boomtown. Sheik Mohammed bin Rashid Al Maktoum says the world does not understand Dubai's announcement on restructuring the emirate's deeply indebted conglomerate, Dubai World. The debt crisis dragged down the main stock markets in the UAE for a second day on Tuesday, and caused other markets in the Gulf to plummet.

Fear of huge losses among Dubai lenders and the risk of default contagion to other countries sent global markets tumbling last week. Gulf bourses have also been hit this week, with the Dubai Financial Market sliding 5.6 per cent yesterday. Abu Dhabi’s stock exchange closed down 3.6 per cent, Qatar was off 8.3 per cent and Kuwait 2.7 per cent.