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Dubai, Bankers and the state of "The World"

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posted on Jan, 28 2011 @ 11:07 PM
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I seen this article and I immediately giggled a little. I remember on all of the mainstream cable stations(Discovery, Nat Geo, and History Channel) touting Dubai as a powerhouse of wealth and innovation. It seems like a powerhouse of fraud and poorly engineered pile of sand topped with money swindling. I think that somebody(like the bankers) are operating some kind of scam in Dubai. This attracts most of the big spenders sucking them like a leach promising them their own little piece of the world. All while doing less than average planning and construction to save all of the money "they" can.

Do you think that this is a high stakes scam? Here is the article I found on "The World".


DUBAI (AFP) – A cluster of 300 artificial islands off Dubai's coast in the shape of a global map is stable, its developer Nakheel insists, despite a court claim alleging that "The World" was neglected and eroding away.
"There is no issue with the stability of The World islands that are approximately 70 percent sold and handed over," a Nakheel spokesman said when asked about the allegations.
"The island purchasers (have) the responsibility to proceed with their developments in due course," he added.

The islands, many of which represent individual countries and which can only be accessed by boat or helicopter, were meant to be one of the Gulf city-state's crowning developments.

Builders have announced plans for a few of the islands, but development has yet to begin on most of them.

A company contracted to provide logistics support to the islands filed a claim with a tribunal that handles cases related to the emirate's troubled Dubai World conglomerate, alleging that third-party developers had not been encouraged to develop the islands, and said they were being hit by erosion.

Nakheel subsidiary The World LLC "did not develop the project as anticipated at the time of the agreement and the project has lain largely undeveloped," according to the claim filed by Penguin Marine Boats Services LLC.

Penguin is contracted to pay "a licence fee of 5 million dirhams ($1.36 million dollars) per annum" to conduct operations, but the lack of development on the islands means it has "been unable to develop its business opportunities," the claim said.

Additionally, "the navigation channels... are presently so ill-defined and the water depths have been so seriously eroded due to reclaimed sand silting up the navigation channels that major reclamation works will henceforth be required," it said.

A lawyer for Penguin Marine, Richard Wilmot-Smith, was quoted by local media as having told the tribunal that "the islands are gradually falling back into the sea."

Nakheel dismissed the allegations as "misleading and mischievous statements."

"The wholly incorrect and unsupported assertion relating to the state of The World islands was made in the context of a legal case brought against The World LLC by a logistics provider," the spokesman said.

"Nakheel will continue to protect the interests of its operations and stakeholders and take such action as is appropriate in the circumstances," he added.

The spokesman said that the case "was dismissed with costs awarded in favour of The World LLC. We are vindicated by the court's decision."

However, a final judgment with reasons for the decision has not yet been posted to the tribunal's website, where judgments appear after they have been issued.

Abu Dhabi-based English-language daily The National said that the tribunal ruled against Penguin but has not yet given its reasons for doing so.

Lawyers for Penguin Marine declined to comment, and the company's general manager Alex Labor said only that "Penguin's position is... what our lawyers said during the trial."

Nakheel, which developed Dubai's iconic palm-shaped islands and the Atlantis luxury hotel among other developments, was hard-hit by the global economic crisis, which led to a sharp fall in Dubai real estate prices.

Nakheel was to split from parent company Dubai World, which rocked global financial markets when it announced in November 2010 that it needed to freeze debt payments, under a debt restructuring plan..


http://news.yahoo.com/s/afp/20110128/wl_mideast_afp/uaeproperty litigation_20110128112334

Here is the picture of what the world is supposed to look like. (I think)





Here is some snipits of some interesting information on Dubai's debt restructuring plan.


Dubai Group LLC, the investment company seeking payment relief on $6 billion of loans, appointed eight banks to represent creditors in two committees as it tries to speed up agreement on a debt restructuring plan.


Dubai Group, controlled by Dubai Holding LLC, is one of several companies in the emirate seeking to restructure loans after property prices and asset values slumped and credit markets froze. Dubai World, one of the emirate’s three main state-owned holding companies which controls port operator DP World Ltd., reached a deal in October with more than 70 banks to restructure $24.9 billion of debt.

www.bloomberg.com/news/2011-01-24/dubai-group -said-to-set-up-two-bank-restructuring-committees.html

I believe that this was all orchestrated in conjunction with the market slump and the bankers somehow.
Or am I just paranoid?lol

edit on 28-1-2011 by liejunkie01 because: (I think)

edit on 28-1-2011 by liejunkie01 because: (no reason given)

edit on 29-1-2011 by liejunkie01 because: spelling




posted on Jan, 28 2011 @ 11:37 PM
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I changed the thread title because I thought it fits better with the whole banker scam idea.



posted on Jan, 29 2011 @ 12:01 AM
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Yep, I remember when they started building all that stuff, and thinking how strange it was.

But then I heard somewhere that the king? said they were doing it because eventually they would run out of oil, and "tourism" was their backup plan.

So, now what are they going to do? Construction has stopped, tourism is not so good, and the "over developments" are sinking.

Yes, I think Dubai was scammed.



posted on Jan, 29 2011 @ 02:07 AM
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reply to post by sodakota
 


some little facts, Dubai is 1 of the state or emirates in the federation of 7 emirates that makes up United Arab Emirates. the start of the rise of dubai some 10 years ago was not because of oil...as compare to the rest of the emirates, oil was not the factor of the rise of dubai, it has always been real estate, unfortunately..there are many greedy people who capitalised on the demand back then and demanded high price for real estate rental, this is due to the fact that unskilled labours who made up of the large populations that earns very less and the high rollers who earns extremely disgusting amount of monies but giving less of what they know, the the high rollers are willing to pay any amount for their wants but in between the labours and the high rollers, there is a big gap of middle income earner, who is like me..who thinks that the price of rental for a 1 bedroom apartment back in end of 2008 is disgustingly high to the likes of 130k/ year and the owner demands that you paid off the rental in 1 cheque before you even moved in!

bare in mind that, the local populations is slightly around 1 million for the entire UAE and UAE have a population of around 3 million plus population, therefore the large chunk of the populations is foreigners living and working here.many of the development ideas and stuff like that were not make up solely by the locals..it is probably brainchild of the locals but was ill conceived or ill advice by erm..(foreigners), you know those high stakes foreigners, who left dubai the moment there is a slight indication of crisis faster than you can say "YES!" ...

as for the impact of those illl conceived projects, whether they are environmentally negative or economically unfeasible, i guess the good sides of the crisis does wake up the people here, they need a more sustainable economy, be it real estate or tourism, the sharp drop in prices does help to readjust the real estate price to a realistic price.. i give you an example :

when i first arrived in dec 2008, i cannot even rent a decent room for 5k/month let alone an apartment and now i am renting a good 1 BR apartment for 5k/month that was previously going for 10k/month, the previous tenants who left the apartment in june 09, rented it at 10k/month in feb 09, and i rented the same apartment for 5k/ month in june...is crazy..

in summary, i looked at dubai's economic crisis as a whole, if you want an example of a really free market, check out the rental of prices, it drops sharply because of demand and supplies. secondly, dubai is still consider an emerging economy, it has not reached the maturity stage of many other economies, in terms of best practices, policies and many more.

and finally, what dubai is missing is a diversify economy and not soley based on real estate/tourism, it should make a transition into a more knowledge based economy and attracting more middle income expats and not going after disgustingly ugly, unrealistic high paying jobs.



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