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| Version 1 | Version 2 |
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| Climate of fear among Dubai investors | Climate of fear among Dubai investors |
| (about 1 hour later) | |
| By Malcolm Borthwick Editor, Middle East Business Report, Dubai Work has now paused on a number of Dubai construction projects | By Malcolm Borthwick Editor, Middle East Business Report, Dubai Work has now paused on a number of Dubai construction projects |
| Dubai World's decision to ask for more time to pay off its huge debt caused financial markets around the Middle East to tumble last week. | Dubai World's decision to ask for more time to pay off its huge debt caused financial markets around the Middle East to tumble last week. |
| Dubai World has a total of $59bn (£35bn) of debt and wants to restructure $26bn of this. | |
| The news led many analysts here to question not just the ability of Dubai World to pay off its debts, but also the economic model of the Emirate. | The news led many analysts here to question not just the ability of Dubai World to pay off its debts, but also the economic model of the Emirate. |
| Dubai doesn't have the oil and gas wealth of its neighbours, so it expanded aggressively into tourism and real estate during the boom years, but it did so at a price - billions of dollars of debt. | Dubai doesn't have the oil and gas wealth of its neighbours, so it expanded aggressively into tourism and real estate during the boom years, but it did so at a price - billions of dollars of debt. |
| And with credit now harder to come by, and investors reluctant to invest in the property market here, it has been left badly exposed by the financial crisis. | And with credit now harder to come by, and investors reluctant to invest in the property market here, it has been left badly exposed by the financial crisis. |
| Unfortunately expats are having to move to other countries or back home to find work British-born Dubai resident | Unfortunately expats are having to move to other countries or back home to find work British-born Dubai resident |
| But to write off Dubai would be premature - it's a gateway to the Middle East for many international companies, and its infrastructure is years ahead of its neighbours. | But to write off Dubai would be premature - it's a gateway to the Middle East for many international companies, and its infrastructure is years ahead of its neighbours. |
| The response of financial markets and the frenzy of international press coverage of Dubai World's troubles has riled Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum. He says the Emirate is misunderstood. | The response of financial markets and the frenzy of international press coverage of Dubai World's troubles has riled Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum. He says the Emirate is misunderstood. |
| And the Sheikh's defiant response was: "We are strong and persistent, it is the fruit bearing tree that becomes the target of stone-throwers or anything else in their hands." | And the Sheikh's defiant response was: "We are strong and persistent, it is the fruit bearing tree that becomes the target of stone-throwers or anything else in their hands." |
| Global giant | Global giant |
| But what about those who live and work here, what do they think? | But what about those who live and work here, what do they think? |
| Dubai World built up huge debts transforming the city's skyline | Dubai World built up huge debts transforming the city's skyline |
| Nakheel is the company at the heart of Dubai World's problems and has made Dubai famous with its daring and ambitious man-made islands. | Nakheel is the company at the heart of Dubai World's problems and has made Dubai famous with its daring and ambitious man-made islands. |
| Three palm shaped islands are planned, one of which is up and running, and "The World", a cluster of islands kilometres out at sea, is in the early stages. | Three palm shaped islands are planned, one of which is up and running, and "The World", a cluster of islands kilometres out at sea, is in the early stages. |
| The company's slogan is "Where vision inspires humanity", and its projects captured the imagination of investors around the world. | The company's slogan is "Where vision inspires humanity", and its projects captured the imagination of investors around the world. |
| Some of these investors aimed to make a quick buck "flipping" - selling off-plan properties at a profit before they were completed. | Some of these investors aimed to make a quick buck "flipping" - selling off-plan properties at a profit before they were completed. |
| But others just wanted to live or retire in the sun. | But others just wanted to live or retire in the sun. |
| Until recently, Sunil Gomes was development director at Nakheel. He describes the scale of the company. | Until recently, Sunil Gomes was development director at Nakheel. He describes the scale of the company. |
| "Nakheel at its peak probably had about $30bn to $50bn of real estate being developed around the world. It employed 3,800 people," he says. | "Nakheel at its peak probably had about $30bn to $50bn of real estate being developed around the world. It employed 3,800 people," he says. |
| "It was initially formed to build water-based projects in Dubai, and then it expanded internationally, so it invested in projects in the USA, Africa and Asia as well." | "It was initially formed to build water-based projects in Dubai, and then it expanded internationally, so it invested in projects in the USA, Africa and Asia as well." |
| Delayed properties | Delayed properties |
| Palm Jebel Ali is the second in Nakheel's palm trilogy. | Palm Jebel Ali is the second in Nakheel's palm trilogy. |
| One can call it a conniving, conceiving propaganda which has targeted Dubai Dubai businessman Ashraf Abdul Hadi | One can call it a conniving, conceiving propaganda which has targeted Dubai Dubai businessman Ashraf Abdul Hadi |
| It's a vast manmade palm-shaped island, stretching kilometres out to sea, and you can only really get an idea of the scale of it from the air. | It's a vast manmade palm-shaped island, stretching kilometres out to sea, and you can only really get an idea of the scale of it from the air. |
| I went to the Palm Jebel Ali with one investor who has bought a villa there, but the cranes stand idle and we couldn't see any construction work going on. | I went to the Palm Jebel Ali with one investor who has bought a villa there, but the cranes stand idle and we couldn't see any construction work going on. |
| She was due to move in this year, but now doesn't know when it will be ready. | She was due to move in this year, but now doesn't know when it will be ready. |
| The investor is part of a group of 600 homeowners who are unhappy about the delays in the delivery and registration of their properties. | The investor is part of a group of 600 homeowners who are unhappy about the delays in the delivery and registration of their properties. |
| Climate of fear | Climate of fear |
| Nakheel's woes come after property prices in Dubai have fallen by 50% from their peak. | Nakheel's woes come after property prices in Dubai have fallen by 50% from their peak. |
| Expats say Dubai's roads are now a lot quieter | Expats say Dubai's roads are now a lot quieter |
| There is a climate of fear among property investors here - some talk of being intimidated or even threatened by developers after airing their grievances and many won't talk to the press. | There is a climate of fear among property investors here - some talk of being intimidated or even threatened by developers after airing their grievances and many won't talk to the press. |
| The British investor I spoke to didn't want to be identified for fear of reprisals or being forced to leave the country. | The British investor I spoke to didn't want to be identified for fear of reprisals or being forced to leave the country. |
| "The decision for Nakheel to ask for more time to pay their debt will have an impact on us," she says. | "The decision for Nakheel to ask for more time to pay their debt will have an impact on us," she says. |
| "We thought we were coming out of recession and the market was coming back. | "We thought we were coming out of recession and the market was coming back. |
| "But because of what has happened in the last week, people are going to start selling their investments. | "But because of what has happened in the last week, people are going to start selling their investments. |
| "I know people who are going down to the stock market and just want to take their money out." | "I know people who are going down to the stock market and just want to take their money out." |
| 'Great place' | 'Great place' |
| So what do other expats here in Dubai think about all of this? | So what do other expats here in Dubai think about all of this? |
| Dubai's ruler says the Emirate is misunderstood | Dubai's ruler says the Emirate is misunderstood |
| I went down to the English pub on Dubai's Creek to find out. | I went down to the English pub on Dubai's Creek to find out. |
| Outside there's an old red British phone box and inside is a crowd of punters, most of whom have come to watch English football on television. | Outside there's an old red British phone box and inside is a crowd of punters, most of whom have come to watch English football on television. |
| "I don't think it will have much difference on people who live here," says Wayne Smith from Sheffield, who has been living in Dubai on and off for the past seven years. | "I don't think it will have much difference on people who live here," says Wayne Smith from Sheffield, who has been living in Dubai on and off for the past seven years. |
| "It may cause some problems on the big projects, but everything seems all right as far as we can see with the naked eye. Dubai's a great place to live." | "It may cause some problems on the big projects, but everything seems all right as far as we can see with the naked eye. Dubai's a great place to live." |
| His partner used to work for a removal company, but left the company by mutual consent earlier this year. | His partner used to work for a removal company, but left the company by mutual consent earlier this year. |
| She remembers a few years ago when three times as many people were arriving in Dubai as were leaving, but earlier this year this trend reversed. | She remembers a few years ago when three times as many people were arriving in Dubai as were leaving, but earlier this year this trend reversed. |
| "People who are living here know what's happening," she says. | "People who are living here know what's happening," she says. |
| "There have been a lot of redundancies and there are certainly not as many people on the roads. | "There have been a lot of redundancies and there are certainly not as many people on the roads. |
| "Unfortunately expats are having to move to other countries or back home to find work." | "Unfortunately expats are having to move to other countries or back home to find work." |
| 'Media attacks' | 'Media attacks' |
| But many locals or Emiratis here feel the press has been overly eager to attack Dubai. | But many locals or Emiratis here feel the press has been overly eager to attack Dubai. |
| Ashraf Abdul Hadi is a local businessman who runs the Bin Hadi Group a real estate and trading company. | Ashraf Abdul Hadi is a local businessman who runs the Bin Hadi Group a real estate and trading company. |
| "One can call it a conniving, conceiving propaganda which has targeted Dubai", he says. | "One can call it a conniving, conceiving propaganda which has targeted Dubai", he says. |
| "They didn't draw a line between the government of Dubai and private companies. | "They didn't draw a line between the government of Dubai and private companies. |
| "When you go for debts on private companies you always go for rescheduling payments. The media takes it as an opportunity to attack Dubai." | "When you go for debts on private companies you always go for rescheduling payments. The media takes it as an opportunity to attack Dubai." |
| Many investors believed that either Dubai or the federal government of Abu Dhabi would step in to pay off Dubai World's debt. | Many investors believed that either Dubai or the federal government of Abu Dhabi would step in to pay off Dubai World's debt. |
| But as markets panicked and investors digested the shock news, the government of Dubai sought to distance itself from underwriting Dubai World's debt, saying that it was private and not sovereign debt - even though it's a government-backed company. | But as markets panicked and investors digested the shock news, the government of Dubai sought to distance itself from underwriting Dubai World's debt, saying that it was private and not sovereign debt - even though it's a government-backed company. |
| This has been a public relations disaster for Dubai on a big scale. | This has been a public relations disaster for Dubai on a big scale. |
| Dubai's ruler feels the Emirate is misunderstood and investors feel they have been misled. |