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Dubai World -- A dream built on bubbles

UAE FM: economic crisis in Dubai has ended

The foreign minister of the United Arab Emirates says the economic crisis in Dubai has ended. Sheikh Abdullah Bin Zayed al-Nahayan made the comments during a visit to the West Bank.

Dubai World

Dubai World is one of the key forces behind the growth of the city-state. The conglomerate´s businesses range from shipping to property to construction of artificial islands.

Total debt

The firm´s debt amounts to nearly 60 billion US dollars. That´s about three-fourths of Dubai´s overall debt.

What lead to the crisis?

Dubai shows fragility of dreams built on bubbles

Dubai shows fragility of dreams built on bubbles

"Dreams are not limited. You should keep on moving." The well-known quote from the Emir of Dubai Sheikh Mohammed, posted on Dubai´s Sheikh Zayed Road, has inspired people and nations worldwide to dream big and realize their dreams. But a dream built on bubbles is doomed to burst, sooner or later, as has happened in Dubai.

Reason 1: over-development of high-end luxury projects

The ongoing global economic downturn has diverted much of investors´ capital preference, leaving some of the high-class projects in Dubai unable to attract buyers or tenants as people have expected. And as a result, their book value continued to shrink.

Reason 2: relies too much on foreign capital

Many economists agree that Dubai relies too much on foreign capital and large-scale construction projects. The government has borrowed massively to fund its property boom.

Will the crisis bring in great influence to the world?

- How will Dubai crisis affect China?

- Real impact remains uncertain

- Real impact remains uncertain

China´s stock market dropped more than 100 points following Dubai´s announcement. However, experts say the current impact is more on a mental level.

- How will Dubai crisis affect the world?

<a href=http://english.cctv.com/program/newshour/20091127/102984.shtml>- Dubai debt shakes European bank shares</a><br><a href=http://english.cctv.com/20091128/102657.shtml>- Oil prices fall on concerns of Dubai debt crisis</a><br><a href=http://english.cctv.com/20091130/102410.shtml>- Dubai debt crisis sounds new alarm for tightening risk management</a>

- Dubai debt shakes European bank shares
- Oil prices fall on concerns of Dubai debt crisis
- Dubai debt crisis sounds new alarm for tightening risk management

- Is the influence overstated?

- Dubai´s ruler: World misunderstands debt crisis<a></a><br><a href=http://english.cctv.com/20091128/101572.shtml>- UAE newspaper criticizes markets for overreacting</a><br><a href=http://english.cctv.com/program/bizchina/20091202/101975.shtml>- EU: Dubai debt troubles should have little impact</a><br>- <a href=http://english.cctv.com/program/bizchina/20091207/102951.shtml>Investors: Dubai crisis overstated</a>

- Dubai´s ruler: World misunderstands debt crisis
- UAE newspaper criticizes markets for overreacting
- EU: Dubai debt troubles should have little impact
- Investors: Dubai crisis overstated

How to get out of the crisis?

Dubai World restruction plan unveiled

Dubai World restruction plan unveiled

Dubai World plans to restructure about 26 billion US dollars in debt out of the estimated 59 billion it owes. This news is reassuring investors that the emirate´s debt problems can be contained, and pushed global markets edge higher.

Dubai World mulls four options of debt repayment

Dubai World, one of Dubai´s largest and most important conglomerates, is considering four options of repaying its total 59-billion-U.S. dollars debts and liabilities. Dubai World could still meet the Dec. 14 deadline on the 4 billion dollars payment of a sukuk, or Islamic bond, from its flagship real estate developer Nakheel under one option being considered by advisers to the conglomerate, according to a state-run newspaper The National.