“It has absolutely destroyed confidence. Who will do business with Dubai now?” said Christopher Davidson, an expert on Gulf economics at the University of Durham. “Sheikh Mohammed was hinting for years about a full sovereign guarantee behind these developers.
"It will be very difficult for Sheik Mohammed to survive this one," said Christopher Davidson, an expert in Gulf affairs at Britain's Durham University and author of two books on the Emirates. He said Mohammed misled investors by giving them the impression he had money to back his plans."---AP, 4th Dec 2009 ("Dubai ruler's ambition helped sow seeds of crisis.")
“The international financial community, and I know this to be the case in London, won’t do business with Dubai again,” he said. It’s a really devastating scenario.”---Times Online, 5th dec 2009 (Extract taken from the article "Confidence will never retutrn in Dubai.")
"If Dubai were a film trilogy, the first would be called “Riddle of the Sands” and the second “From al-Bling to al-Broke”. The third, “Just Deserts”, looks set to run and run." ---Times Online, 6th Dec 2009 ("Dubai keeps its head in the sand.")
"With such leadership in place, can the UAE remain strong? It is more than likely Abu Dhabi doesn’t think so and will encourage change. In that case, and if as a result Dubai can be brought more fully into the fold, then its financial implosion could represent a golden opportunity for Sheikh Zayed’s dream of a solid, cohesive federation finally to be realised."---Faxts.com, 5th Dec 2009 ("Dubai and Abu Dhabi: implosion and opportunity")
It seems both funny and hard to digest that banks, as big as RBS (the UK government owns a claiming stake of 70% in the bank) and HSBC (UK's largest bank by market capitalization), were so naive in lending such big amounts without any security or guarantee.
Everybody was making money when the desert sun was shining brightly. And all hell broke loose with one announcement about a delay (not a write-off) in payment. As for the British press it got another opportunity, post the property slump, to go after Dubai.
Much of this is understandable as Dubai with its vision managed to lure investors to a desert without oil. Investors who could have very well gone to more established and mature markets.