A few years ago, an adviser went to Sheik Mohammed bin Rashid al-Maktoum with a plan for a tall office building. “Only 90 stories?” the ruler of Dubai asked. The aide was sent back to the drawing board, with instructions to design the highest structure not just in Dubai, not just in the Middle East, but in the world. When the Burj Dubai has its grand opening in January, it will be an 818-meter monument to the visionary autocrat who dreamed the Dubai dream and, as it turns out, a conspicuous symbol of the hyper-ambition that now threatens the emirate with financial ruin.
Sheik Mo, as he’s dubbed by the media, was tweeting in London last week when officials back home stunned financial markets by announcing a request for a six-month repayment standstill on part of the sheikhdom’s $80 billion debt. The immediate issue is Dubai’s inability to come through on a $3.52 billion tranche due in mid-December. Yet, with some 400 property projects already reportedly frozen in Dubai, the news raised the specter of a gigantic default that would sink exposed creditors around the world. “Inspired by Islamic artifacts,” read the sheikh’s post on Twitter during a visit to the British Museum as share prices from Tokyo to New York were about to plunge in response to Dubai’s announcement.