rss feedDubai captures global attention – first for dazzling skyscrapers, now paying for them
Dubai, as you’ve seen, has caught the world’s attention in recent days, largely because of the possibility that developers might not be able to repay their debt on time.
Dubai World, which The New York Times describes as the main investment arm, stands an estimated $59 billion in the hole.
The newspaper reported that Dubai World floated the idea of not repaying interest on that debt for half a year.
It also ran a piece talking about how Dubai World wants to temporarily stop paying for all or part of its debt.
Yes, that can rattle markets.
If there’s any symbol of the rocket-like growth in Dubai, it has to be the Burj Dubai, the more than $4 billion structure which is the world’s tallest at 818 meters, or 2,684 feet.
It’s on the list to take the world’s tallest building title away from the Taipei 101 Tower.
There are reports that the Burj Dubai – which was scheduled to partially open on Dec. 2 – will now welcome the public inside in January.
It’s easy to marvel at the structure from afar – what with the planned Armani Hotel looming inside the structure designed by architect Adrian Smith.
A few years ago, back in the good old days, a U.S. television crew was able to marvel at the soaring building, take viewers on a tour and stand on top.
It’s a great video to watch because I know how rare it is to visit such a building.
It’s more sobering, of course, to realize the back end of any financial deal, namely paying for it.
From the Times article:
Now that the boom has gone bust, both in Dubai and in the United States, Dubai is stuck with a glut of real estate that no one wants to buy or rent….Now, just as Bear Stearns was a harbinger of a string of failures of overly leveraged investment banks, the concern is that Dubai could be the canary in the coal mine for heavily indebted countries.
Earlier this year, there were reports of workers from other countries – who arrived to find opportunities – leaving Dubai because of the poor economy.
It wasn’t that long ago – in April 2008 – when The New York Times ran a glowing travel article about Dubai, complete with a photo gallery showing an opulent lifestyle that mirrored a glossy magazine (actually, a Web site that has sharp, rich, dense colorful photographs is better to say these days) but could be experienced.
Here’s the beginning of that travel piece:
YOU name it, Dubai has it. Or if it doesn’t have it, it’s building it. Or if it’s not building it, it’s dredging up an island to put it on. The busiest of the seven United Arab Emirates is growing so fast that its newest developments can only be measured in hummingbird flaps.
Also, apparently, there’s a set of islands in Dubai designed to reflect a world map – or that’s what Michiel van Raaij writes in this Eikongraphia blog post.
The islands are called The World and you can watch the developer’s video introduction about the project.
I think this island project is amazing. I mean: Would we have thought of it?
Thinking about this project as Dubai World tells the world that it can’t pay its debt right now is, well, an illustration of context.
It’s easy to use hindsight as a tool, as you know.
I only use it in reference to the article’s first sentence because financial instability – or the possibility of it – is something that I don’t think the world markets want Dubai to have.
Markets do come back.
The question, of course, is when, to what extent and in what form. But it’s safe to say that we’ve seen enough dips in the U.S. and world economy in recent months.
But this bump in Dubai could be a big one – even markets in Asia dropped because of the news.
This news means many things for many people.
Among them: The owners of the Taipei 101 Tower.
They’ll get to keep the title of world’s tallest building for at least one more month.
Really, though, it’s a strange way to hold on to the title. Right now, I question whether anyone really cares anymore.
NOTE: The message in the red box in the video is from the YouTube operator and not from me.
UPDATE: It looks like Dubai is going to receive help from the central bank of the United Arab Emirates.
