After being pestered about it during all this crazy building they’ve been doing (the international community’s line going something like, “Dudes, you don’t have that much oil”), Dubai yesterday finally shed some light on their financial situation, and, whoops:
Concerns have mounted in recent months that Dubai is on the verge of collapse after embarking on one of the most ambitious and fastest building programmes the world has ever seen. In recent years, Dubai has wowed the world with iconic constructions including the Palm Jemeirah, the world’s biggest man-made island, and the Birj Dubai, the world’s tallest building, and Birj Al Arab, the seven-star hotel shaped in a sail.
But since the onslaught of the financial crisis, admiration has turned to concern about how Dubai, with is very limited oil supply, is funding the growth.
Speculation has mounted that Dubai was struggling under a mountain of debt and would have to start selling assets or get bailed out by Abu Dhabi. Property prices in Dubai have plummeted by as much as 40pc in two months.
So, now onto solutions:
For Sameer Al Ansari, chief executive of Dubai International Capital, the way out of the financial crisis is for the Gulf to keep spending. Mr Al Ansari, one of Dubai’s most important investors, was asked “How to get confidence back in the economy” at DIFC Week and said “seize the day”.
Another radical answer to the same question was to re-open the ancient trading routes. Victor Chu, head of First Eastern Investment Bank in Hong Kong called for the re-establishment of the ancient trading routes between China and the Gulf.
Now think what happened to Venice. In 1500, the city was at the very zenith of its economic power. It was the hub of the European economy, the place where Christendom, the Levant and the Orient met. The wealth it derived from trade and finance was what made possible the monuments we admire today, just as it made possible the armies and navies with which the Venetians vanquished their rivals.
Then came Columbus.