Can You Spare $80 Billion, Habibi
Anyone who thought the whole Dubai “thing” was too good to be true can pat themselves on the back. This week, Dubai’s richer sibling Abu Dhabi poured $10 billion into the city-state’s economy to help keep it afloat. Turns out all of those fake islands and towering sky-scrapers are not only of dubious worth, but have resulted in $80 billion worth of debt. While this may seem minor compared to America’s trillion-dollar bailout, that $80 billion is almost the size of Dubai’s entire economy.
Lacking oil and other natural resources, Dubai had always promoted itself as a “sponge” economy — absorbing the excess capital floating around the Gulf and the world. Turns out that free-flowing cash — whether petrol, stock market, tourism or real estate-generated — is no longer in easy supply.
Dubai has a lot of work to do if it want to stay in business. Praise Allah that its deep-pocketed neighbor — and fellow UAE member — appears unwilling to let it go belly up.
At least for now.