Yet while the economic impact of the announcement by the country’s largest construction company that it will default on debts is undoubtedly serious, the Emirate’s Dutch expat community say life is unlikely to change for them.

Stock markets plunged when Dubai World – the government-owned conglomerate responsible for the vast number of building projects in the country – said it may have to default on nearly 59 billion dollars of debt. The ripple effect has been felt all over the world and analysts say the announcement will have serious repercussions for the government of Dubai.
 
Surprise
Writer and journalist Jim Krane, who has reported extensively from the region, told Radio Netherlands Worldwide the news came as a surprise to most: “Dubai isn’t really that forthcoming about facts about its financial situation, and Sheikh Mohammed bin Rashid al-Maktoum has until now been giving lots of reassurances about Dubai’s willingness to repay its debt and abilities to repay it. His word has generally been very good. People were very shocked, very surprised that his assurances didn’t come to fruition this time.”
 
End of excess?
One question now being asked by many is whether the excesses that Dubai has traditionally been known for - particularly in the field of construction - will come to an end? Although the Sheikh now admits the pace of development was out of control, those who live there don’t expect life to become any different. Jan Demmink is a founding member of the Dutch society in Dubai: “I don’t expect major problems… Yes, the government has delayed payments to contractors in Dubai – and of course that has a ripple effect – but don’t forget: most people working in Dubai cover the Middle East, they travel to Kuwait and Saudi and Abu Dhabi, and that will continue.”
 
Regime will suffer
Jan Demmink and Jim Krane agree the real impact will be felt in the building trade, which has suffered since the start of the economic crisis more than a year ago. But Jim Krane also says the regime will suffer badly:
“The leadership is grapping with a really, really big problem. This is Sheikh Mohammed’s biggest leadership challenge yet since he took office and since he’s been running the city. Now it’s really unclear whether the city can emerge intact. This is a huge imbroglio that it’s caused – Dubai stands a chance of actually losing its leadership position in the gulf to some of its rival neighbours.”

Radio Netherlands/ Expatica