Dubai Sheikh Lashes Out Over Debt Crisis

Earlier this week, Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum said the media exaggerated his emirate’s debt crisis, and that the world is being misled over how Dubai would solve the problem. The Sheikh also verbally attacked international investors by saying, “they do not understand anything.”

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Speaking in an e-mailed statement, the Sheikh, who is also prime minister and vice-president of the United Arab Emirates, said “The media hype is exaggerated and will not hurt our perseverance. Dubai World is independent from the [UAE]government.”

“We are strong and persistent,” he added. “It is the fruit-bearing tree that becomes the target of [stone] throwers.”

Dubai World, the state-run company behind the sheikhdom’s property boom, began talks with banks yesterday on how to fix the $26 billion debt. It is also seeking to delay pay backs on less than half of its $59 billion of obligations, easing the possible damage to banks recovering from the credit crisis.

Analysts are saying there is now deep distrust towards Dubai, and a lot of work needs to be done to repair that.

Meanwhile, despite the emirate’s financial problems, Sheikh Mohammed still found the time to purchase some racing horses. Two days before Dubai sent shockwaves across global stockmarkets, he bought eight horses for almost $2 million.

“The horse side of the business is the private enjoyment of Sheikh Mohammed, so therefore has nothing whatever to do with the government, or government funds and the restructuring,” said John Ferguson, the Sheikh’s horse buying adviser.