Dubai: the downside of the boom

[Kshasty]

Although Dubai nearly approached total default in 2009, January 4 of the new year is once again the Big Day in Real Estate; the world's tallest building - the Burj Dubai or Tower of Dubai - opens in the emirate, which is three times bigger than Moscow and has the financial appetites of the universe. The building has 160 floors of hotel rooms, as well as very expensive apartments, offices and shops.

The tower should be entered into the Guinness Book of World Records on five counts: its height, number of floors and a few other technological building records. And if you go to the top, which is 818 meters high, you can see Tehran, Baku or Cairo, at least in theory.

However, those who deal with global finances, debts and defaults see something else from the height of the Burj Dubai: an unfair system of reselling real estate before it has been built (options), which involves banks in the sort of construction booms that very often end in the collapse of construction companies, massive bankruptcies, loss of money by private investors and loss of trust in financial institutions in general. But the most difficult question is whether government guarantees could be trusted when they back up many-billion-dollar bank loans even in the oil-rich Middle East? Also, have we overcome the period of wildcatting and unjustified and unverified banking and financial risks, or have we not learned anything from last year's financial crisis?

http://en.rian.ru/analysis/20091229/157416217.html