During 2008 and 2009, Dubai went through some bad times as many in the international financial world questioned both its stability and the vision of its rulers. Now it is time to note that the international financial world has completely reversed its earlier scepticism, and last week's Dubai government bond issue was over-subscribed by a very pleasing 3.5 times. This success followed another Dubai success on the bond markets earlier this month, when Emirates airline raised $1 billion (Dh3.67 billion).
It is true that the international markets are keen to look for good emerging market bonds to buy, as they seek to diversify away from the faltering economies of Europe and North America. But despite this need to favour emerging markets, it is still important that they are eager for Dubai bonds. It is an astonishing turnaround from the savaging that Dubai received in 2009.
The intensity of the fury directed at Dubai during 2009 felt unnatural. The anger was not just about the need to reschedule many of the emirate's borrowings. It was also mixed in with a lot of jealousy at seeing how fast the emirate and the UAE as a whole had progressed, and delight at finding that Dubai could also have problems, since it seemed to have had such a good run during the beginning of the 21st century.
The leadership of Dubai and the UAE have borne their huge responsibility well in seeing the emirate and country through the crisis. The underlying fundamentals were always strong, and now the markets can see them again. Last week's government bond raised a fairly modest $500 million, but it was focused on setting a price benchmark, with a view to issuing more bonds later. But despite its new-found security, Dubai will never be able to forget the vicious way that the markets turned on it.
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