Dubai has shocked investors by asking for a debt standstill at Dubai World

[BUTEMBO21]

Good bye Dubai

Hallo Abu Dabi

[Dareus]

The debate is starting to heat up.

A commentator of the prestigious UK newspaper THE TIMES in London thinks Sheikh Mo’d must bear responsibility for this debt disaster and must abdicate so Dubai can become an outer suburb of Abu Dhabi and ruled once again, as it was before 1820, by the Al Nayhan’s (spare us!): “Enough glitzy debt: time for regime change”: http://www.timesonline.co.uk/tol/com...cle6936966.ece

2dayDubai disputes this and argues that there would be no modern Dubai without Sheikh Mo’d (although Sheikh Mo’d is really just continuing his fathers legacy. He’s Sheikh Rashid on steroids in my opinion) and that the Dubai Government’s current strategy regarding the crisis, is to put as much pressure as possible to compel the Dubai World creditors to negotiate a delay in repayment of the loans pending assets sales, by reminding them of the legal reality that the Dubai Government did not officially guarantee the Dubai World liabilities, and cant be legally forced to repay them.

But as the website notes there is human element to this debt drama that is not going to go away, and may still require Dubai Government intervention.

It’s not just the banks and bond holders that are facing Dubai World losses; there are massive contractor’s bills still unpaid from the Palm projects:

Quote:
“Its hard to imagine that an Islamic government will permit holders of the Islamic bonds to lose their money – and if they are protected – so too must all other creditors be protected – as legally Dubai World cannot treat [prefer] some creditors more favourably than others – and if the Dubai Government steps in the underwrite the Dubai World debt as some - but not all - commentators are suggesting – all creditors would have to be treated equally.
In terms of moral right – the strongest case must be for the many out of pocket contractors – some large multi nationals – but many small Dubai businesses and tradesmen.
We alluded to this problem in our review of Palm Jebel Ali – where we noted that many Nakheel [the main Dubai World subsidiary company with cash flow problems] contractors – which include road, bridge, soil stabilization, utility, dredging, contractors - and numerous professional services business’s - were simply not getting paid – and that this was a major investment impediment to the completion of this project: http://www.2daydubai.com/pages/dubai-palm-jebel-ali.php
The banks have the least moral claim for rescue – they created the mess here and elsewhere – but the Dubai World contractors – who as unsecured creditors not unreasonably assumed that the Dubai Government would stand behind this company they owned - are comparatively innocent victims – and must be first on the list to be paid – if a rescue proceeds – as it should in this website’s opinion if the Dubai World assets sales do not repay all debts.”
http://www.2daydubai.com/pages/dubai-world-crisis.php

[bayviews]

Sad as it is, this doesn’t come as any surprise. Indeed a few of us here warned of the very possibility that Dubai was just a “mirage in the desert” many months ago & posted articles to that effect.

I’m sure most here wish Dubai the very best on its long-term recovery prospects. But lets be serious, with all those rows of now surplus “see-thru” towers its not coming back tomorrow.

Dubai wasn’t the first bubble to burst & it certainly not going to be the last.

[egypt69]

Originally Posted by Xusein

It was inevitable, especially in our current enviornment of tighter credit. Even if Dubai can get back to financial stability, they will still have to contend with the massive overbuilding binge made during the good times that will continue to keep the vacancy rate very high for the forseeable future. I mean, all those giant towers that they were building everywhere were nice, but who was buying them? Investors thinking that the prices would keep on going up and up forever. A real estate market dominated by investors is trouble. If Dubai wasn't a bubble, I don't know what is.

Also, when you have a poor credit rating as an individual, it takes a while to fix it back. Same thing will happen to Dubai, even if Abu Dhabi bails them out, it won't be as easy to finance massive projects as it once was. They won't be as eager to lend, seeing the track record. I hope for the best, but I don't think that it will be the same for a while after this. Dubai has been humbled.

+1

Very true. Dubai's going down the drain, its sad, but true.

Originally Posted by Kreed

LOL, . Fool, my nation is the United States. What has your dinky, dusty ass, pitiful wasteland achieved in which the US hasn't achieved multiple times over, and then much more in which you'all cant even dream of achieving in even a eternity.. before your puny toy-land even existed? Please, enlighten me with this 8th wonder of the world information you possess.

Watch your language there, have some respect and cut down on the ignorance while you're at it, otherwise you'll find yourself in trouble.

[الاقتصاد الكلى ا]

Dubai's leader Sheikh Mohammad is a visionary man, he took Dubai to a spot where millions of people out of the sheer base instincts of their heinous minds begin to envy Dubai's success.

I congratulate Sheikh Mohammad and his team for their success, wish Dubai more of the same.

No doubts that Dubai made some blunders in its path, relying on glitzy projects a little too much, less on developing indigenous human "capital" but that should be addressed if Sheikh Mohammad's vision of Dubai is to be realized.

It's great to see so many western media and forum members getting all excited over Dubai asking for a mere postponement of its debt payments.

[Xusein]

Well, the "western media" for the most part is getting a bit scared more than excited because of the billions that the banks (especially British) have plonked into Dubai that could potentially ignite another crisis if things go bad enough.

[الاقتصاد الكلى ا]

Dubai's leader Sheikh Mohammad is a visionary man, he took Dubai to a spot where millions of people out of the sheer base instincts of their heinous minds begin to envy Dubai's success.

I congratulate Sheikh Mohammad and his team for their success, wish Dubai more of the same.

No doubts that Dubai made some blunders in its path, relying on glitzy projects a little too much, less on developing indigenous human "capital" but that should be addressed if Sheikh Mohammad's vision of Dubai is to be realized.

It's great to see so many western media and forum members getting all excited over Dubai asking for a mere postponement of its debt payments.

[Xusein]

Err, why did you just repeat what you wrote earlier.

[Matthias Offodile]

P P wrote:
I've lived in Dubai for the past five years and it's sad to see what the media is making of this situation.

Everyone living in Dubai respects Sheik Mo. He is a wise man and has led Dubai to be what it is today.

For someone that is outside, it is maybe easy to make nasty comments about the place and its leaders, but you have to live it to be worth hearing.

The most amazing thing about Dubai is how safe the place is. I am European and have lived in several countries across Europe, NONE of them compares to the UAE. There's never a concern about your personal safety here.

The other thing is tolerance... My god I've never seen a place like this, a place where every imaginable culture lives side by side in harmony.

I could find a lot of bad things to talk about, but I prefer to think about the many good things that make me choose to live here.

I rather be safe here than worrying every day about being stabbed in the UK or shot in the US.

A default on a loan, who cares??? Mostly the people who will get hurt from this are the bloodsuckers who have been filling their pockets on the success of Dubai. Let them swallow this one, next time they will be wiser.

Peace!
December 6, 2009 7:59 PM GMT on community.timesonline.co.uk
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faris ca wrote:
Why international media is against dubai?? The Dubai is one of the greatest city in the world. There is no racism in Dubai. You can see all types of nationalities living here happily.. Whats Happening in European countries and australia?? The Main thing is that Dubai ruler is very kind and great personality.. Not like the cruel rulers of your countries who killed thousands of innocent peoples in iraq and afganisthan.. Dubai will come back. We are confident under the rule of HH Sheikh Mohammed
December 6, 2009 4:58 PM GMT on community.timesonline.co.uk
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Gurvinder Singh wrote:
I have lived in Dubai for nearly 5 years, before & during the boom years.

Sheikh Mohamed and his administration have done a fantastic job of making Dubai one of the best places in the world to work and enjoy life.

He has successfully tread a very fine line in balancing Islamic tradition with modernising his Emirate and that is no small task.

Dubai has a very good infrastructure and manpower base and is the preffered work and residence place for many people like myself.

As in numerous financial meltdowns whether it is South East Asian crisis or Latin American crisis and the Sub Prime crisis and now the Dubai crisis is that banks and financial institutions have taken investment risks to maximise their return knowing fully well what they are getting into.

The problem is that there was too much global liquidity chasing higher rates of return which many of the banks are unable to achieve in the developed economies.

Many people and banks have earned huge fees and income from their investments in Dubai and now need a scapegoat for the downside of their investment.



Though their newspapers are censored Dubai has not cheated anyone or misled anyone. The idea of Sovereign guarantee was never promised and was the assumption of lenders and investors. They did present a rosy picture and lulled many into a complacent mood rubbing their hands gleefully on the fat returns they would make.


Who better to make a villan than Sheikh Mohamed an Arab who bested many countries and organisations be it management, entreprenuership or profitability.

Sheikh Mohamed may be dictatorial but we must acknowlege his contribution. A man and a Govt who has brought his Emirate country from nowhere into the 22nd century as a respected global entity.

Success needs no explanation and failure tolerates no excuse.

Be sure the resolution to this crsis will be time consuming but be sure Sheikh Mohamed and his teamn of International managers and advisors will resolve this crisis honourabl
December 6, 2009 4:31 PM GMT on community.timesonline.co.uk
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R A wrote:
Good to see somebody being honest about the Dubai way of doing business as it would never be said here. The followings sums it up. Smoke and Mirrows, Robbing Peter to Pay Paul and pulling the wool over the world's eyes.
December 6, 2009 6:29 AM GMT on community.timesonline.co.uk
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Emarati M. wrote:
Adam Jones

Thanx aloot for ur comment, there is a media fuzz about Dubai, maybe they hate to see Dubai as a successful city.
December 5, 2009 9:50 PM GMT on community.timesonline.co.uk
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Andrew Crystall wrote:
Hey

First of all

Who is Christopher Davidson, an expert on Gulf economics at the University of Durham?

I have not heard about this university b4

He is not in Harford or even lives in the UAE to analyze the situation deeply, then why I should trust his word against Shiek Mohamed
Who is by the way a man we love and adore, not just because of his money or his position; he is a loving father and a fair Prince. He never said no to an Emarati people. We love him and he loves his country and the citizen. Who are to say that he wants to be liked!!!!!!!

We don't treat our prince the way u do in Britain
We have trust on them, we believe on their abilities to role.

There is no doubt that the financial crisis has an affect world wide even in the UAE, but our leaders are smart enough to go over this problem without any damages. Trade is a business once you loose and another time you make lot of money.

Hypothetically, if 1 project failed or they had a financial problem Sheik Mohamed failed??

The exact opposite happened he proved that he is a great leader by stepping up and go over any consequences of the financial crisis.

Believe it or not, meanwhile, most of the salaries were raised and most of the projects are due soon. Even there are new projects will be on the reality ground very soon

So please, up to date your information, and a tip for the writer do not analyze a person you don't met or seen or even read about. Define failure, I bet you, you can't find this word in Emarati dictionary.

Finally, be professional in your job don’t just write a piece of unreliable article or writing fabrication about the leader or his brother.
December 5, 2009 9:48 PM GMT on community.timesonline.co.uk
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Tracy Sharpe wrote:
Mr Jones...well said..You made my day.
December 5, 2009 7:56 PM GMT on community.timesonline.co.uk
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Ray Smith wrote:
Interesting to see that the last four paragraphs of this story were rather amateurishly censored out of the print edition of the paper given away free at the Dubai 7s rugby today. Hardly the transparency to inspire investor confidence.
December 5, 2009 6:56 PM GMT on community.timesonline.co.uk
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wazdan wazdan wrote:
Dubai boom gone with the wind.
December 5, 2009 5:36 PM GMT on community.timesonline.co.uk
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J J wrote:
Jim McLean is absolutely right. Nobody is gonna do business with Dubai again. This is a country with zero transparency and an obscure court system. Those RBS execs who lent $5B to Dubai World without proper guarantees should be fired!
December 5, 2009 11:31 AM GMT on community.timesonline.co.uk
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For more comments by Brits and others living in Dubai:

http://www.timesonline.co.uk/tol/new...cle6945325.ece

[xAbd0o]

Come'on guys let be honest, Dubai have enough money to pay the $3.5bn and more they earn WAY more than that yearly $3.5bn is nothing to them, I just don't understand is the debt on the government or the companies?

[Xusein]

The debt is for the companies, but they are owned by the Dubai government.