Debt standstill?

25 November 2009

There has always been something soulless about the flashy developments in the Gulf, and especially in Dubai, a place that had become a byword for bland, characterless luxury. No doubt it is pleasant for those fortunate enough to enjoy the delights the city offers and the climate must be nice, but I have been under the impression that there is too much of a dark side to the labour market that has underpinned Dubai’s rapid development. Dubai never fascinated or excited me.

Very few people have been immune to the global economic crisis, and it has affected Dubai too. Feeding on easy credit and consumed by hubris, it has expanded too far, too fast. Now, Dubai World is seeking a debt standstill, which sounds like an euphemism for not servicing its debts, because it cannot meet the obligations. Even worse, the officials seem to have been giving misleading information on the financial health of Dubai World and others to the investors.

If anything symbolizes the strange world of huge money constantly made almost from thin air and gushing around the world like merciless flood water, and the economy based on such money that had crashed so spectacularly, then Dubai would be a strong contender. Economies will recover, at varying speed and at different junctures, but is it possible that there will be little left but desert in Dubai?

The city may have been just a cruel mirage that sucked in money and people.