Posts Tagged ‘moving to’

Share markets across Europe opened over 1% lower this morning as worries over Dubai’s debt problem hit investor confidence. With news from Dubai World that it will delay paying some of its debt, the Asian markets took a sharp dent too.

Not so long ago, Dubai was synonymous with success and prosperity. If there was an extravagant building going up, a bridge ridiculous in ambition falling into place or an absurdly luxurious hotel spring out of the sand, you could bet it was in Dubai. However, problems with Dubai World and Nakheel have thrown a dark cloud over the future of the emirate.

dubai

In fact, this image of a playground of the rich and haven of opportunity was behind hundreds of thousands of people moving to Dubai.  Only recently did figures indicate that 25,000 people a month moved to Dubai in a way not seen since the California gold rush.

However, Dubai World – the conglomerate which led the emirate’s giant expansion drive – had a total $59bn of liabilities. A majority, then, of the $80bn total of Dubai. The news has shocked markets and even – perhaps as a stroke of good news – the prices of oil have fallen 4.5%.

Of course, speculation being the wonderful thing it is, there’s a concern growing that Dubai World will prove unable to pay back its debtors and Nakheel will be unable to finish work on the Palm Jumeriah (that lovely palm-tree shaped development island) and prices and values have started that sharp journey to rock-bottom.

Now though the spiralling price of property and fears as the once staggering-future of Dubai becomes questionable, the biggest fear is that, with banks and builders set to take a big hit, the fall of Dubai’s fortunes could throw the global recession back into the downward swing.

It’s certainly strange to think of this happening in Dubai when it was so very recently seen as development-central, with such over-the-top buildings as the Burj Dubai, being seen as an example of how countries can move away from reliance on oil (albeit in a somewhat tasteless sense) and pulling in money from tourism and investment.

Such a shame.

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