It was felt around the world, but perhaps the most punishing in the ever-cynical British press.
Unfortunately the ‘Dubai Machine’ was not at its tip-top performance, and whomever was in charge of media on that day must of been out of the office celebrating Eid Al Adha, because they created a media vacuum that the press love as they can make things up and call on non-experienced ‘experts’ who really have no idea.
Lets set the story straight.
1 - Dubai World is NOT the country. Saying that ‘Dubai World’ has a $59b financial problem is not the same as saying that Dubai (or the United Arab Emirates) is bust! Dubai World is an investment company that manages and supervises a portfolio of businesses and projects for the Dubai government across a wide range of industry segments and projects that promote Dubai as a hub for commerce and trading. It is not, however, guaranteed by the Dubai Government.
2 - Some might argue that $59b is not a huge sum when compared with some other corporate bailouts (e.g. when Lehman Brothers went into bankruptcy protection, it owed more than $600 billion). In reality, Dubai World still has a lot of valuable divested assets, so their only shortfall is a US$3.5-billion loan, which the company is unable to repay by its December deadline.
3 - Concerns over the fallout from Dubai’s debt problems contributed to the main European stock indexes falling over 3% on 26 November. This was followed by drops in Asian stocks on 27 November. However the European stock markets rebounded as investors’ fears subsequently subsided as they decided the estimated debt wasn’t big enough to trigger a systemic failure in global financial markets.
4 - And pretty much anything else you’ve heard around this subject is just false. Dubai is as bankrupt as 1920s Germany (The Guardian) - not true. India may take over Dubai as Russian oligarchs shoot at each other on the Burj Dubai (The Independent) - certainly not true. “There are not that many people when you go out shopping, and there are almost no Westerners in the bars and clubs,” according to Sarah, speaking to the BBC - we don’t know where she’s going - certainly not the places this office socialize at! It’s not a fiscal Armageddon. It’s just not, in global terms, actually that significant.
But what sells newspapers?
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