Sunday 29 November 2009

The Dubai Crisis

The tragedy of the black hole in Dubai’s finances is that it has dealt a blow not only to its own reputation but to that of the United Arab Emirates -- and beyond that to the Arab Gulf as a whole. One might even go so far as to say that it has dealt a painful blow to the entire Arab world.

Until the crisis broke -- with the announcement last Wednesday that Dubai was seeking a six-month moratorium on the debt of Dubai World, its government-owned holding company -- the Arab Gulf was widely recognized as the real success story of the Arab world.

It had become a pole of modernity, of high-finance, of high-tech enterprise, of education and culture, of spectacular universities and museums. It had attracted international attention and admiration.

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