The Copenhagen Climate Summit was being prepped to be the ultimate event, or even the WTO Ministerial conference being held today in Geneva. The developments affecting currencies, gold and oil could have also occupied the economic limelight. However, it was the repercussions of Dubai World's request for a “stand still” on its debts for six months which has awakened the world from the dream that the financial and economic crisis is over. Also, this has demonstrated to the G20 Summit that reforming the economic system using traditional means will not achieve sustainable recovery and growth; rather, this would only induce non contiguous periods of recovery that are laden with risks. The real estate bubble in the emirate of Dubai thus was no different from the one in the United States, or Indonesia, China, the European Union or any other part of the world: As financial institutions supported the growth of the real estate sector, guaranteeing companies and individuals and their risk-laden investments, the international rating agencies overlooked these risks, until the real estate market collapsed, and became bankrupt. The small emirate however, “ventured” further, with their capital being comprised of golden sands, beaches, and waves that benefited well from the warmth of the sun, to build a distinctive tourism sector all throughout the year. Nonetheless, the problem in Dubai cannot be blamed on one responsible party, but rather, it first originated in the international banking and financial system, before being exacerbated by local dynamics that exceeded the principles of fiscal discipline and regulations, and the relevant institutions of the state. These all contributed significantly and in an adventurous manner into the real estate bubble, to the extent that subscriptions exceeding 5 billion dollars were realized in a single Initial Public Offering (IPO), within hours of being listed. On a different note, it is not true that the establishment, any establishment, is what controls the market. Quite the contrary, it is the markets that drive the governments, and burden them with the weight of dreams and visions that are beyond belief; yet, without such adventures, no growth, development or progress can take place, which would continue until the laws of balance come into the picture, and address any imbalances. In fact, Dubai's debts do not exceed one eighth of the losses incurred by Lehman Brothers, the American bank whose collapse shook the most powerful economies of developed nations. Yet, the panicked countries that were affected did not fail in containing the consequences, and in absorbing the shocks of the frequently occurring major financial, which are especially affecting U.S banks. As such, regional and international solidarity with Dubai can help the latter to overcome the crisis of the delay in the repayment of its bad debts. This is because the emirate, which had been driven by ambition- albeit sometimes a wild ambition beyond imagination – with the aim of establishing an economic model that is unique in the world, has been let down primarily by the global economic crisis. This latter dried up the investments in Dubai's mega projects which encroached upon the air and the sea, after having swallowed the desert. Therefore, when the pool of liquidity dried up, and subsequently the investments, it became clear that something will inevitably happen. As liquidity dried up, the marketing of real estate products ceased, at a time when this sector represented three quarters of the volume of economic activities in the emirate, which had nothing but the sands that thirsted for the construction of building, avenues, gardens, water canals and towers, and that could only be quenched by the fountains of imagination and innovation. Dubai and all the emirates that constituted the United Arab Emirates headed by Abu Dhabi, and like any other member country of Gulf Cooperation Council (GCC) headed by the Kingdom of Saudi Arabia, provided work opportunities, first to the citizens of the GCC, and then to citizens of the Arab countries in general, and to Asians, Europeans, Americans and others. Dubai, following suit with the GCC, has invested in many cutting edge projects in other Arab countries and in foreign countries, and as such, Dubai, like the GCC, can be credited with the growth and development of those countries, through their development projects. What the emirate of Dubai thus needs at the moment is the solidarity of the Gulf countries, and subsequently of the Arab world and the world at large. In fact, not only might Dubai be facing material losses, but also the prospect of other competitors emerging to take advantage of the opportunities that arose as a result of Dubai's investments' lack of liquidity. This would establish climates favourable for investments in new areas, which would benefit from the damaged confidence in Dubai. The latter must thus regain this confidence, and strengthen its foundations that must be much stronger than those of Dubai's ambitious towers and legendary skyscrapers. To quote the introduction of the special issue of the French periodical “Le Monde” entitled “The Gulf States – The Arab Renaissance” (February/March 2009), and which tackled the reality in those countries: “Without a doubt, these projects are awe inspiring: Bridges, ports, airports, towers, hotels, museums, ecological cities; the Emirs stop at nothing. The symbol of this extravagant success is Burj Dubai, which symbolizes the madness of engineering, with its height of nearly one thousand meters. But ever since the global financial crisis started affecting the financial tools in the Gulf, everything slowed down, including the investments into building the new tower; a miracle or a mirage? What will come after the numbers and figures about the radical changes that this economic success brought, and which changed lifestyles, customs, traditions and civilizations?” A miracle or a mirage?
