Lehman was a bad call the UAE avoided

It came down to the wire. After more than two weeks of financial turmoil of unprecedented scale for the economy of Dubai and the broader UAE, triggered by the request for a payment freeze and debt restructuring by Dubai World, an 11th-hour relief package arranged by Abu Dhabi has managed to avoid what would have otherwise been an imminent default on the government-owned group’s most immediate liability to come due. It seems that crisis has been averted.

It is inevitable that over the next few days, many commentators will start wondering what all the fuss had been about.

They would assert, naturally with the benefit of hindsight, that the conclusion was inevitable and that there never should have been any real doubt about the timely and successful repayment of all outstanding debt of the group and all other strategic commercial entities owned by the Dubai Government, given the collective scale of economic resources available to the UAE Government and the dire potential consequences of failing to do so.