The race between Gulf states to build the biggest airport, tallest skyscraper or glitziest hotel is turning into a competition simply to convince banks to keep lending to the oil-rich region.
Emirs, presidents and sheikhs of the six members of the Gulf Cooperation Council meet in Kuwait next week with the days of easy credit over following a year of debt defaults and deferred payments. State holding company Dubai World said Dec. 1 it was seeking to restructure $26 billion of borrowing.
“Financing will be harder to attract for all companies in and related to the Gulf in the next few quarters as international banks will be loath to have any association with regional corporates and governments, regardless of their stability,” said Emad Mostaque, who helps manage $100 billion at Pictet Asset Management Ltd. in London.
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