HA HA HA
EK made $970m dollar profit in the first six months of this year.... ,SO WHAT ABOUT THIS GUARDIAN ARTICLE :
The International Monetary Fund estimates its total indebtedness at $US110 billion, including the debts of central government, government-related companies such as Dubai World, and other corporations. This is about 140 per cent of GDP - putting the emirate above Greece and Ireland in the world debt league.
Compounding Dubai's problems, much of this debt falls due in the short to medium term. Some $US24 billion is repayable between now and the third quarter of 2012, suggesting that a raft of restructurings are likely soon.
Dubai Holding, the conglomerate owned personally by Sheikh Mohammed, which owns the Jumeirah hotels brand as well as the emirate's once gung-ho private equity group, Dubai International Capital, sent a shiver through UAE markets just before the Eid al-Adha holiday last week with a statement that it was in talks with bankers to restructure its $12 billion or so of debts.
It had missed two debt repayments, and is in serious risk of a formal default. It promises a resolution by the end of this month.
As well as rescheduling, Dubai has also said it will sell assets to repay debts. Some of these will be baubles that the emirate picked up on international markets in the boom years, from the New York retailer Barneys to the Canadian entertainment group Cirque du Soleil and the cruise liner QE2.
Others possibly earmarked for disposal or flotation on international markets include the indigenous businesses built up as part of the core economic strategy: Jumeirah hotels, Emirates Airlines and the DP World ports and shipping group (which contains the old P&O business bought in 2006).
''Is Dubai going to sell the family silver to pay for its profligacy? That would be a big blow to its pride,'' said a local banker.
In particular, another branch of the UAE family might object. Abu Dhabi, the biggest emirate, which plays Washington to Dubai's New York, will want a say in the fate of these and other assets regarded as core to the UAE's global strategy. There are already plans to merge the Dubai and Abu Dhabi sharemarkets, and there has been open speculation about Abu Dhabi taking over Dubai's huge new airport, the modestly named Dubai World Central.
Perhaps the most significant change of the past year has been the relationship between Dubai and the far richer but more conservative Abu Dhabi. The capital bailed out Dubai with $US20 billion of loans at the height of the crisis. These also have to be repaid and it is likely that Abu Dhabi will ultimately want a different kind of return.
Davidson said: ''For the first time in 170 years, Dubai has lost its de facto autonomy, given that its creditor and lifeline is now oil-rich Abu Dhabi, which has clear and unashamed ambitions to centralise the UAE federation and curb any autonomous macro-economic or political activity within its borders.''
Apart from the possibility of Abu Dhabi taking over Dubai's assets, this new subservience to the capital could make itself felt in two other ways, both with serious implications for Dubai: the setting of the emirate's budgets within the overall federal financial structure...........
