A year after Dubai's debt crisis first roiled global financial markets, glimmers of confidence are returning to the city-state that became synonymous with skyscrapers and a man-made archipelago. But the threat of more debt-restructuring pain remains a dark cloud over the emirate, investors and officials say.
Dubai World, one of the government's flagship conglomerates, shocked the financial community a year ago when it announced it would ask creditors to delay repayments on its $23.8 billion debt pile, leading investor confidence in the emirate to plummet.
The conglomerate, like other Dubai government-owned groups, built up debts during years of frenzied spending that included some of the world's most extravagant real-estate projects developed by its Nakheel unit—seen to be at the center of Dubai's financial problems—and on the purchase of international properties by investment arm Istithmar World as prices peaked.
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