Dubai’s New Mega-Projects Alarm Bank of America Merrill Lynch - Middle East Real Time - WSJ:
"As Dubai again announces one new mega-project after another, warning signs are growing that the emirate could repeat the same mistakes that nearly brought it down in 2009.
Bank of America-Merrill Lynch is worried that new plans such as the Mall of the World are reminiscent of the days preceding Dubai’s property market crash when the emirate spent billions of dollars building spectacular hotels and artificial islands off its coast. Once the economic crisis hit the region, Dubai was unable to service the vast pile of debt it had amassed in previous years to fund these projects and had to resort to its neighbor Abu Dhabi’s help and ask creditors to defer payments to stave off financial collapse.
Last week, the emirate’s ruler Sheikh Mohammed bin Rashid al Maktoum unveiled plans to build Mall of the World, a 4.5 million square meter project with a price tag of $6.8 billion that will contain 100 hotels, a cultural district and shopping boulevards -all temperature-controlled to ensure a steady flow of tourists even during the scorching summer heat."
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