What can we learn from Dubai?
It has been revealed that the Dubai authorities are in debt to the tune of $60 billion as their attempt to push Dubai to the head of the worldwide investment market has spectacularly backfired. While there is no doubt that the state has improved its worldwide profile and worldwide standing over the last decade much of this has been done on the back of significant and ever-growing debt.
However there is most certainly a firm base for the future, even if the Dubai property market may have downside in the short term, and investors will be monitoring the situation very carefully. It is ironic that initially the Dubai property market was one of the more stable areas of the worldwide investment arena as the credit crunch hit home and the recession began to cause problems in other areas of the world. However, once investors decide to cash in their chips we saw something of a domino effect which very soon lead to distressed selling and various regulatory changes in the set up of the Dubai banking sector.
When you bear in mind that the UK government has invested nearly £200 billion into the quantitative easing program, the $60 billion debt accumulated by the Dubai authorities seems miniscule in comparison. However, there are some significant differences between the UK economic investment programme and the way in which the Dubai authorities literally piled their debt higher and higher as they chased overseas investors.
Share this..
Related stories
Gilts market unmoved by Bank of England MPC
The gilts market was unmoved after the Bank of England's decision to suspend the quantitative easing program was confirmed today. In reality the closure of the quantitative easing program, at least in the short term, was well flagged and very much expected by analysts and investors. However, the minimal movement in the gilts market would appear to indicate investors are now happy that the UK gover...
Read MoreScottish Executive announces a £95 million investment for jobs
As we approach the next UK budget, on 22 April, it is rumoured that up to £1 billion will be slashed from the Scottish executive budget under the guise of "efficiency savings". In a move to combat the potential issue of a £1 billion reduction in the Scottish budget, the ruling SNP party has today announced a £95 million investment into the jobs arena which they believe will help Scotland bounce...
Read MoreWill budget cuts at HMRC affect the future?
HM Revenue and Customs is in the headlines for all the wrong reasons at the moment with billions of pounds outstanding due to technical problems with historic tax data although if forecast budget cuts of up to 25% are confirmed by the government then the situation could get much worse. As doomsday a scenario as it may seem, many believe that HM Revenue and Customs is already operating on a redu...
Read MoreWhy is Hershey now the favourite in Cadbury takeover saga?
Despite the fact that US outfit Kraft Foods is currently the only company with a takeover bid on the table for Cadbury it would appear that the Cadbury directors and a number of UK banks are willing to back a counteroffer by Hershey. However, let's not forget there is also the figure of Ferrero in the background which has expressed an interest in Cadbury with rumours of a potential joint offer wit...
Read MoreTenants warned of landlord scams
Tenants up-and-down the UK have this week been warned of potential landlord scams by the housing charity Shelter. It seems that up to a million people in the UK could already have fallen victim to landlord scams which could see deposits retained, excessive fees for work, unlimited guarantees given instead of deposits and one of the most alarming scams which involves crooks break into empty propert...
Read More