Dubai's Déja Vu

The expression, you'd think they'd have learnt by now springs to mind as we read that City watchdog, The Financial Services Authority is said to be looking at exposure losses for UK Banks that have invested in Dubai World, the holding investment company wholly owned by the Dubai Government. Many were surprised as they thought that the structure of the islamic bonds or Sukuks implied state backing. However, as the Dubai stock market slid by 7%, the government has confirmed that Dubai World is not a government department and that it will not jump in to save the company - the creditors need to take responsbility for their actions. Dubai has been hitting the headlines regularly from its controversial workforce building those skyscrapers to its environmental record in constructing that palm and more recently the bling, bling reputation it gained with its avalanche of shiny celebrities used to promote the place. For those looking for a more detailed view, check out the FT, Le Figaro or the UK Times or the BBC who come up with a background view on what went wrong. Dubai World's website announces that the sun never sets on Dubai,. Their mission is to generate global socio-economic growth and sustainable stakeholder wealth through diversified investments, executing innovative projects and key strategic partnerships.

As someone once said, if it seems too good to be true, then it probably is.........