Ambitions wreck Dubai’s economy

It appears to be a case of a man’s ambition sounding death knell for a robust economy. Some years ago, Sheik Mohammed bin Rashid al-Maktoum trashed a 90-storey building plan and ordered it be replaced by the highest building in the world.

As it unfolds, Burj Dubai, a 818-meter monument dedicated to Dubai’s visionary despot, now poses a threat of financial wreck.

What crippled Dubai’s economy
Last week, financial circuits in Dubai were dumbfounded when the officials asked for a six-month delay in paying off sheikdom’s $80 million debt. In addition to this, concerns were being raised regarding Dubai’s incapacity to clear a $3.52 billion tranche payable this December. Some 400 building projects already frozen in Dubai exposed the risk of a mammoth evasion that can engulf creditors across the globe.

Throughout the global recession of 2008, Sheik Mohammed brushed aside its effect on Dubai’s economy and repeatedly defended its economic development model. "I can safely say that we have succeeded in containing the risks of the global financial crisis in record time," he was quoted as saying in April last year.

Despite tremors of global meltdown clearly being felt in his kingdom with rupture of the property bubble and thousands of jobs being lost, Dubai hosted a $20 million extravaganza to mark the opening of the $1.5 billion Atlantis hotel and resort.

Containing the damage
To survive this crisis, Sheik Mohammed will look towards the rich oil reserves of Abu Dhabi. It released a stimulus of $10 million instantly after the economic crash of 2008 and similar measures are expected to be adopted again.

Abu Dhabi’s $600-million surplus balance sheet looks promising enough to help Dubai steer clear of a looming economic debacle.

The biggest threat for Dubai’s economy is posed by Nakheel, the company behind ambitious projects like the Palm and the World, constructed off the gulf coast.

"It will take a bit of time, but Dubai will come back. It will come back stronger, because the crisis will help create a more sustainable model for the future," a Dubai insider said.

The present threat to Dubai’s economy affects the world at large, as this metropolis has become a junction for co-operation in the Middle East. In a region constantly hit by clashes, Dubai is the only place where people come together to build a future.

During a speech to international business leaders in 2007, Sheik Mohammed said, “Instead of sitting around waiting, praising our glorious past and blaming others for our failures and our problems we have to arm ourselves with courage and work quickly and seriously, to tackle the reasons that put our region behind the rest of the world."

Sheik Mohammed’s larger than life dreams have brought Dubai to this state of financial instability; however, it is his very ambition that continues to be a source of hope for the Middle East.