Dubai or Don’t Buy?

Dubai one of the seven emirates of the United Arab Emirates (UAE) is like the peasant who married the princess. Dubai was a small fishermen’s and oyster divers’ village until the 1960s when its huge deposits of oil were discovered. Seemingly limitless possibilities opened before Dubai’s wide-eyed citizens who wanted to rule it all — the land the sea and the air — and see their name splashed across the world’s headlines. They’ve since erected skyscrapers galore for habitation tourism and business. Dubai’s Burj Al Arab consistently voted the world’s most luxurious hotel stands on an artificial island with a private bridge leading to the mainland.

But Dubai sought to go higher still. Its Burj Khalifa the world’s tallest building at 2717 feet dwarfs every structure in the vicinity.

Even as Dubai aimed for the heights (and world records) the country’s innovators also focused on the ground with a project called the Palm Islands three man-made islands built in the shape of a palm tree.

The three islands named the Palm Jumeirah the Palm Jebel Ali and the Palm Deira boast residential leisure and entertainment centers and add about 325 miles of beach to Dubai.

The result is unusually beautiful. In 2001 the Jumeirah Palm project was initiated with great fanfare. The homes splendid mansions in the grandest Oriental style seemed straight from a fairy tale. They were ready in 2006.

But the project entitled “The World” a plan to create artificial islands in the shape of the world map that would serve as private resorts for the world’s billionaires flopped. Some of them had been sold and 70 percent of them had reached various stages of construction when about a year ago the bottom quite literally fell out.

It turned out that “The World” developer Dubai World — owned by Sheikh Mohammed bin Rashid Al Maktoum the prime minister and vice president of the UAE as well as Dubai’s absolute monarch — went bankrupt at the end of 2009 to the tune of $25 billion. Only “Greenland ” a showpiece personally owned by Sheikh Mohammed was populated.

And all the other “countries” of “The World”?

Britain’s Telegraph reported last week that the islands are sinking back into the sea and navigational channels connecting them to the mainland are “silting up” — in other words becoming clogged by silt the grains or particles of disintegrated rock.

Britain’s Sun went a step further in predicting that the project would shortly be completely discontinued.

What happened to Dubai? They forgot to do their marketing homework. Who really needed the skyscrapers or the extravagant homes on the various islands? En route to their multiple entries in Guinness they accrued huge debts. Their sloppy bookkeeping and poor understanding of the supply-demand dynamic made for one of the region’s more spectacular fiascoes.

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