Dubai World lessons.

One can only marvel at the audacity of the planners and architects of Dubai. The size and scale of the buildings and undertaking is simply colossal. Apart from the two artificial islands, Dubai had an indoor ski slope, an underwater hotel, a space port, a sports city, numerous skyscrapers and hotels and an area that was to recreate the seven wonders of the Earth. Disneyland on a stupendous scale.

Yet, there was something nagging me even before I read that Dubai World, the owner of the company building this city is bankrupt. How could they attract enough people to occupy the apartments that went for 2.5-5 million and the villas on the artificial islands that went for a lot more? Not only that, but how were the people (the occupants) to maintain cash flow to finance such lifestyles? Along came the Obama meltdown and Dubai World is in hock for $60B.

Did anyone wonder about the feasibility of the financing? Or, were they just enamoured with the idea of a planned community? Some banks (supposedly the British and other European banks) did not do enough due diligence. Dubai World seems to have been built in the air. Even sand had to be imported! It shows you what happens when people disregard realities of finance and just forge ahead because they love the idea.