Comment: Dubai restructuring just a start

* username: rupertbu

When a significant announcement is made, a phrase often leaps to the fore that embodies a consensus response to what has been said.

After Dubai World unveiled its much anticipated restructuring proposal for its debts last week, the overwhelming reaction seemed to be that of “a step in the right direction”. Yet the phrase was swiftly followed by a “but”.

Some of the caution is linked to details that have still to be thrashed out – significantly, whether bank creditors of Dubai World will receive interest and, if so, at what level. That will help decide just how much pain the creditors will be asked to endure. But the other reason for some caution is more symptomatic of the hammering Dubai’s credibility has suffered.