Dubai does better

* username: rupertbu

Dubai has learnt some lessons from its November trauma. Then, it so botched a request for a standstill on the debts of Dubai World, a state-owned conglomerate, that fears about the solvency of the statelet started to swirl. It made a cryptic announcement just as the emirate closed for several days to mark Eid, leaving investors confused, unable to get answers and fearing the worst. This week, announcing the terms of that same restructuring, the city-state showed a surer touch.

The announcement of proposed terms for reorganising the debts of Dubai World (and Nakheel, a property subsidiary) was clear and professional, not vague and delphic. Dubai has shown that it is beginning to understand that, when dealing with international marketplaces, it must be transparent and unequivocal.

Dubai has also realised that it cannot trample foreign investors. The statelet has refused to guarantee Dubai World’s debts, but it has volunteered to make considerable sacrifices to private backers. This is shrewd: Dubai relies on the investment of strangers. It cannot be seen to hang them out to dry at the first opportunity.