Dubai dropped the first shoe - its request for a debt repayment standstill. And what a big shoe it was. Still causing shockwaves.
Not only have Dubai and the region been affected but there have been knock-on effects. European banks - who reportedly hold some US$35-45 billion of Dubai debt - have seen their shares fall. As have European companies where Dubai and other GCC countries are shareholders.
Real estate investors in major centers are reportedly licking their lips thinking about potential fire sales of assets - the Adelphi Building in London and so on.
Let's take a look at some repercussions closer to home.
Following Dubai's real estate boom, everyone who was anyone in the real estate game had to have at least a $1billion dollar project. And like Dubai, the more adventurous ventured from their home markets. Jordan, Egypt, Tunisia, Morocco and so on. Dubai even has a sky scraper building in Doha. Salam Resorts in Bahrain and Oman. Sama Dubai.
Now that bankers and investors have belatedly rediscovered risk (but perhaps as usual only temporarily) there is bound to be a slowdown.
What is the fate of the projects a-building? And what is the fate of new developments?
Not likely a positive development (sorry for the pun) for some of the less rich, less resilient economies.
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