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Dubai metro contractors owed $3bn 8, January 2010

Posted by thegulfblog.com in The Emirates.
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Days after the opening of the world’s tallest building in Dubai, the spendaholic Emirate has been brought firmly back to earth by threats to the completion of its new, highly publicised and much vaunted metro system. Essentially, it appears that the Dubai government has not paid its Japanese contractors almost $3bn and they are – understandably – slowing down construction work on the remaining unopened stations as a negotiating tactic.

The FT reports that part of the problem stems from the spiraling costs of the development, doubling to more than $7.6bn.

Burj Dubai opens 3, January 2010

Posted by thegulfblog.com in The Emirates.
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The world’s tallest building, the Burj Dubai, opens on the 4th January 2010. It is a potent symbol no matter which way you look at it. Either it represents the ultimate, hubristic and gaudy folly of Dubai’s arrogance or it is a daring symbol of change and progress; a pointer to Dubai’s ambition and – they hope – their future.

Some facts and figures:

  • It cost: $800,000,000 or $4,100,000,000,000 or $1,400,000,000,000 depending on who you believe
  • It is 818 meters or 2,684 feet tall
  • It has more than 50 lifts some going as fast at 40 miles per hour (allegedly)
  • It has 160 floors
  • Although Dubai is not a country known for its abundant water resources, there will be a $218 million fountain in the Burj Dubai lake shooting water some 150 meters into the air
  • It will surely have one of the gaudiest hotels in the world (designed by Armani) rivaling only the Burj al Arab in hideous over-the-top opulence

Here’s a rather nifty video taken from the very top.

Who blinked first? 18, December 2009

Posted by thegulfblog.com in The Emirates.
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With Abu Dhabi agreeing to give Dubai some $10 billion, there are many interesting questions to be asked about the conditions that are now attached and what this means for some Dubai’s autonomy. The best discussion of this is available, of course, on the Suq Al Mal blog.

Dubai: No lessons learned 15, December 2009

Posted by thegulfblog.com in The Emirates.
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There’s a peach of a post over at Suq Al Mal discussing an absurdly triumphal editorial in a Dubai newspaper.

One would have thought that recent events would have resulted in a bit of introspection and restrained behavior.  Unless of course one was familiar with the region.
Today’s Khaleej Newspaper (Dubai) has a lead article entitled “We Can Do It”. Here is the first paragraph.
“GLOBAL crisis or not, Dubai has done it again. It has once again shown the world, beyond doubt, its ability and willingness not only to meet its obligations but any challenge to its unrivalled status as the most dynamic global financial and trading hub in the Gulf region.”
I’m not sure precisely what Dubai has done.
As I understand things, the kindly Shaykh up the road has sent around US$10 billion to be used to settle Dubai’s debts.  And Dubai is mailing the check.   How that shows ability is beyond me.  And how living off the kindness of strangers beats back challenges to a postulated “unrivalled status” also escapes me.

Dubai’s fundamental problem 30, November 2009

Posted by thegulfblog.com in The Emirates.
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Dubai is in a mess. One of the many reasons that it finds itself in such a predicament is because of a rather profound lack of transparency. Markets hate not knowing. It inevitably leads them to a pessimistic spiral. Statements that people should “shut up” speculating and worrying about the state of Dubai’s economy and that things are going “along nicely” are not worth the paper they are written on if they are not backed up by a transparent paper trail. Indeed, these ridiculous statements were ignored by the international markets much to Sheikh Mohammed bin Rashid al-Maktoum’s annoyance.

There is a truly fundamental problem here. Sheikh Mohammed bin Rashid al-Maktoum is used to people doing what they are told: he is the ruler, they are the ruled. Yet, in situations like this, he is not dealing with a few sycophantic Emirati bankers, fearful of a loss of patronage, but savvy international bankers, journalists and the like. They will need more than his ‘mighty word’ that things are alright. Indeed, their mistrust has been proven 100% correct: his word clearly means nothing, having being proven to be 100% incorrect and wrong.

This is the kind of thing that happens when someone is so rarely told ‘no’. At this point I am reminded of two leaders. The first is King Canute, who is said to have believed that he could stop the tide coming is as he was some kind of divine King: alas he couldn’t. The second is Gaddafi and his ridiculous speech at the UN a few months ago, a clear a demonstration as there has ever been of an idiot that no one has dared to say no to in 40 years.

The reaction to ban the Sunday Times in Dubai for an unflattering cartoon is typical and not a little pathetic.

And, just for good measures, here’s a (far better) cartoon from The Times’s excellent Peter Brookes.

It has been interesting to note the overbearing tone of near-gleeful Schadenfreude in the British and American press at Dubai’s embarrassing and ignominious default. The tone varies from superior to rude.

…the sea will wash away those hideous palm-shaped islands where our cheaper celebs spend spring weekends, the expat apartment blocks will crumble into dust, the scorpions will return and Dubai will be what it was in the 1960s, a frowsy fishing port in a scorched and very backward Third World country, with a moral code for the indigenous population drawn from AD 1335.