Abu Dhabi and Dubai Blog

The financial crisis and now two criminal cases that have generated critical headlines in other countries have demonstrated that the emirates remain an absolute monarchy, where institutions are far less important than royalty and where the law is particularly capricious — applied differently based on social standing, religion and nationality, political experts and human rights advocates said.

http://www.nytimes.com/2010/01/22/world/middleeast/22uae.html

“The fundamentals in the market are too strong,” he said. “There won’t be a crash.” These words were spoken last year by the head of the largest state development firm in Dubai. But it seems that things have changed:

Since then, residential real-estate prices in Dubai have slumped by almost 50%. Developers have slashed jobs and scrapped projects. Groundbreaking on the tower was long ago put on hold. The yearlong retrenchment culminated in last week’s surprise announcement that Dubai would seek to restructure $26 billion of debts owed by Dubai World, the holding company for many of the government’s port, infrastructure and real-estate businesses.

http://online.wsj.com/article/SB125988807548075805.html?mod=rss_Today%27s_Most_Popular

Some brief but astute comments from a blogger at the New Yorker:

Last Wednesday, Dubai asked to be excused six months of payments on a debt of fifty-nine billion dollars owned by Dubai World, the state-backed conglomerate. Yesterday, Dubai’s stocks fell 7.3 per cent; today they fell another 5.6 per cent. And the Gulf News, an English-language Dubai newspaper, has reported this online with the headline: “UAE markets bounce back at the end of trading sessions.”

http://www.newyorker.com/online/blogs/newsdesk/2009/12/dubai-in-debt.html