四月初，迪拜市政府报告说，今年前三个月，迪拜的废弃汽车数量比去年同期增长了10%。但中国领导人并没有将这一指标视为经济正在恶化的信号，而是将皮卡的出现归因于简单的效率问题:中国政府现在有三辆拖车来运送车辆，而去年只有一辆。汽车回购业务的数字好坏取决于你如何看待，这是迪拜经济和金融状况的一个很好的比喻。10年前，这个酋长国以一种浮华的、金钱无目的的发展理念在全球舞台上抛头露面，但三年前，它的一些旗舰公司几乎违约，导致这个酋长国垮台。该国一直在悄悄地处理债务问题。自2009年底以来，迪拜及其政府相关实体已通过类似于西式破产重组的法令迫使债权人重组了逾200亿美元的银行债务，占总债务的近三分之二。阿联酋的经济也在好转，旅游业和贸易的反弹推动了经济的温和增长。迪拜或许已经从谷底反弹，但要解决债务问题、让经济恢复健康，它还有很长的路要走。迪拜世界(Dubai World)等政府相关实体已经重新安排了很大一部分债务，但它们仍然背负着巨大的负担。迪拜世界是一家大型企业集团，2009年底宣布暂停偿债，引发了这场危机。国际货币基金组织(imf)在上个月发布的关于阿联酋的最新报告中估计，迪拜GREs的总债务——包括银行债务、债券和伊斯兰债券——达到843亿美元，占GDP的60.4%。在过去的两年里，这个债务大山已经减少了大约50亿美元，但GREs今年仍需要展期大约140亿美元的债务。
完全由迪拜银行持有贷款的10.6％的不良贷款，IMF表示，这比可以通过其他5个百分点，今年跳，如果当局设法重新安排其他政府相关实体的债务。尽管稳定的房地产市场显示出的迹象，楼价已经由约60％自2008年以来下降了，而空置率范围从零售物业20％为办公楼30％。迪拜慢慢愈合，但对于它的烦恼没有快速补救。“迪拜解决其问题的唯一办法就是促进经济增长和创造收入，以及贸易方面的出路，”尼尔·卡斯伯特，在律师事务所SNR丹顿的迪拜办事处的高级合伙人。“随着时间的推移它会发生。一个有趣的问题是，如何长时间的银行很乐意继续推出期限？”到目前为止，银行已经别无选择，只能这样做，当局已采取的这一事实充分利用。Exotix, a London-based investment bank specializing in frontier markets, has dubbed the authorities’ strategy “the four B’s” — “bail out bondholders, burn the banks” — and that formula has been remarkably successful, says Ahmad Alanani, the firm’s Dubai-based director of fixed-income sales. “Aside from the speed at which they’ve managed to restructure, what surprised me the most were the terms that they’re getting away with,” he says. “They have pushed the banks to the limits, both local and international.” In April, for example, Dubai International Capital, a private equity firm owned by the emirate’s ruler, Sheikh Mohammed bin-Rashid al-Maktoum, persuaded its lenders — including HSBC Holdings, Lloyds Banking Group and Royal Bank of Scotland Group — to stretch out the maturity of $2.15 billion in loans by five years at an interest rate of just 2 percent. The banks also agreed to extend the maturity of an additional $350 million in loans by three years. Dubai Group, the sheikh’s main financial services holding company, is currently holding talks with lenders in a bid to restructure as much as $10 billion in bank debt. Exotix estimates that Dubai so far has completed six bank debt restructurings, covering $21.9 billion of the GREs’ total bank debt of $34 billion. That is much more than Alanani thought would be possible not long ago. “I was definitely bearish in 2010,” he says. “The restructuring is going so much better than what I was expecting.” What explains the success? Bankers say Dubai has aggressively pursued its debt restructuring strategy from a position of surprising strength. International banks want to preserve their existing commercial ties in the emirate and to continue to do business there, a fact that the emirate is not shy in pointing out during negotiations. “As for local banks, the Dubai government is sitting on both sides of the negotiating table,” Alanani says. “They have a controlling interest in the banks, or there are political relationships that come into play.” Dubai-based Emirates NBD Bank, which is 56 percent government-owned, has been a party in all six of the completed restructurings and is involved in debt talks with five other entities. Khalid Howladar, senior credit officer at Moody’s Investors Service in Dubai, says the strategy works because it forces the creditors to look beyond their own positions and focus on protecting the emirate’s entire financial ecosystem. “The banks take the initial hit and take on the refinancing burden,” he says. “But if creditors were to foreclose, that would trigger a default, creating a systemic stress that affects the entire system — the banks, the corporates and the government.” Even as the global credit crunch began to deflate the Dubai economy in late 2009, Eric Swats, head of asset management at Rasmala Investment Bank in Dubai, saw opportunity. At the time, debts of sovereign-backed entities were trading for as little as 15 cents on the dollar, which the securities firm considered to be an overreaction. “We felt quite confident that the baby was being thrown out with the bathwater,” Swats says. So Rasmala set up a fixed-income fund in March 2009 to invest solely in the debt of companies in the UAE, including those in Dubai. “The bondholders would be paid in full because the local population owns some of those bonds,” Swats says. “The rulers would not default on their own.” Rasmala invested a few million dollars of its own capital in the now-$40 million fund, which it expanded in 2010 to cover the entire Gulf Cooperation Council, a group that encompasses Bahrain, Kuwait, Oman, Qatar and Saudi Arabia as well as the UAE. The markets are responding to Dubai’s strategy. Honoring bondholder obligations has helped restore the emirate’s creditworthiness, allowing the government and its entities to tap the markets. In April, Dubai’s Department of Finance issued a $1.25 billion sukuk through its trust certificate issuance program, which was established in October 2009. The deal included a five-year, $600 million tranche priced to yield 4.9 percent, or 403.1 basis points over comparable U.S. Treasuries, and a ten-year, $625 million tranche priced to yield 6.45 percent, or 445.7 basis points over Treasuries. By comparison, the department had to pay 6.39 percent to sell a five-year sukuk in 2009. Citigroup, Dubai Islamic Bank, HSBC and the National Bank of Abu Dhabi were book runners on the deal. With $4.5 billion in orders, Dubai’s sukuk was three times oversubscribed. “Investors were happy with the steps taken by the government over the last three years to counter the impact of financial crisis and prudent measures to control costs and manage its budget deficit,” said Abdulrahman al-Saleh, director general of the Dubai Department of Finance, in a statement. The sukuk was also supported by a healthy appetite for Islamic investments, says Adnan Halawi, head of fixed income at Zawya, a Dubai-based financial news and data provider. Just a few days before the Department of Finance’s sukuk, an issue of $1.75 billion by Saudi Electricity Co. had attracted demand of more than $15 billion. Like Saudi Electricity, Dubai wanted to tap into that investor base: institutions and family offices in the Arab world that want to invest only in instruments that adhere to shari’a law, which prohibits the levying of interest or investing in entities involved in forbidden activities such as gambling or alcohol. Halawi says the sukuk’s success illustrates the progress that Dubai has made. In late 2009 the emirate appeared to be on the verge of defaulting after state-owned Dubai World shocked global markets by declaring that it would seek a standstill on the $25 billion in debt it had racked up during the boom years. Today, Dubai is accessing the capital markets at historically low rates, says Exotix’s Alanani. “The bond market has forgiven Dubai completely,” he adds. “It really shows how the markets are so myopic.” Other market indicators also suggest growing confidence in Dubai. Credit default swaps on the emirate’s debt were trading at 385 basis points late last month, well below the peak of 974 basis points in February 2009 but well above precrisis levels of 154 basis points in August 2008, according to financial information provider Markit. CDS rates on Dubai Holding’s debt stood at 939 basis points last month, down from a peak of 2,176 in December 2009. Even in situations where creditors have balked at Dubai’s restructuring plans, the emirate has largely succeeded in getting its way. In February, New York–based Monarch Alternative Capital, which invests largely in distressed debt, won a $45.5 million claim in the U.K.’s High Court against Drydocks World, a shipbuilding and repair business with operations in Dubai, Indonesia and Singapore. The hedge fund firm is among a minority group of creditors fighting a proposed $2.2 billion restructuring plan that includes a five-year moratorium on debt repayments. A few weeks after the High Court ruling, however, Drydocks filed a claim with a special tribunal at the Dubai International Financial Center, which operates and regulates Dubai’s financial marketplace. The claim was filed under Decree 57, which Sheikh Mohammed laid down in 2009 to govern the debt restructuring at Dubai World and its subsidiaries. The decree states that if at least two thirds of creditors agree to a restructuring proposal, the tribunal has the power to make it binding on others involved in the claim. Drydocks’ filing, which effectively negated the U.K. ruling, was the first time a Dubai entity had used the decree. Unlike bank creditors, Monarch wasn’t really interested in preserving the financial ecosystem in Dubai, says Moody’s Howladar. “They’re not worried about the long-term economic viability in Dubai,” he notes. “They’re trying to maximize their gain, which is completely rational.” Drydocks’ restructuring plan seemed to be on its way to completion, but talks stalled again after an early-May ruling by the Singapore Court of Appeal that put into doubt the ability of a portion of the creditor group to gain control of a drilling rig in exchange for dropping its claims. Now Drydocks’ management says it expects to finalize its plans by August. Drydocks is not the only high-profile debt restructuring on the horizon. This month a $1.25 billion sukuk issued by DIFC Investments matures. DIFC Investments owns and operates office buildings in the Dubai International Financial Center, a complex where many investment and commercial banks have their Middle East headquarters. The firm reportedly plans to pay off the debt by raising at least $900 million through a five-year syndicated loan and using its own cash for the remainder. “Dubai leaders have been adamant that the DIFC [sukuk] would be repaid,” says Karim Nassif, a credit analyst at Standard & Poor’s in Dubai. “What’s not clear is how the debt would be settled.” Some observers speculate that the Department of Finance could use some of the proceeds from its recent sukuk issue to cover DIFC’s obligation. In the meantime, S&P placed DIFC on credit watch in April, indicating a 50-50 chance that the agency would lower its B+ rating within 90 days. DIFC Investments sold the floating-rate sukuk in 2007, and like other Dubai entities it hopes to sell assets to raise the $1 billion it needs to pay off its debt. Among the assets said to be on the block is SmartStream, a software company that provides data to banks, bought by DIFC Investments in 2007. Jebel Ali Free Zone, an entity known as Jafza that provides offices, warehouses and land to companies in Dubai, is facing a November due date for a $2 billion sukuk it issued in 2007. In a filing with Nasdaq Dubai in early May, the free zone said it wanted to introduce a call option to repay its debt six months ahead of schedule; this would give Jafza flexibility to redeem the sukuk with fresh bank financing. The biggest single financing hurdle on the horizon is two years off, when the $20 billion Dubai Financial Support Fund comes due. That bailout fund was extended in equal portions by the UAE central bank and the government of Abu Dhabi, the wealthiest of the seven emirates in the federation, along with a consortium of Abu Dhabi–based commercial banks. In the meantime, the recent sukuk issues and debt restructurings are buying time for Dubai to get its house in order, says Moody’s Howladar. “They’re hoping that in the interim the operating environment and global markets will improve,” making asset sales and other types of income-generating measures viable, he says. Dubai Holding and DIFC Investments had about $870 million and $457 million, respectively, in assets classified as “held for sale,” Moody’s reports, citing year-end 2010 financial statements. An improvement in the local economy, if sustained, should help Dubai get back on track. The IMF predicts that the economy will grow by 3.7 percent this year, driven by stronger trade and a revival of tourism. “Dubai has bounced back and managed to shift the focus and attention onto those segments of the economy that are doing phenomenally well: the three pillars of logistics, trade and tourism,” says Exotix’s Alanani. Regional political trends have given Dubai a boost. In the year since the Arab Spring movement began, Gulf governments have granted their citizens lavish boosts in already generous welfare packages, including pay raises of 50 percent or more, in a bid to forestall domestic instability. “If you’re from Saudi or Qatar, the nearest holiday is Dubai,” says Moody’s Howladar. And unrest in Bahrain and North Africa has sent businesses and high-net-worth refugees fleeing to Dubai. Sibling emirate Abu Dhabi will likely bridge any liquidity gap Dubai might face. Abu Dhabi recently has had to pump up its own cash-strapped GREs following a construction spree. But with a sovereign wealth fund fattened by the revenue from $120-a-barrel oil, it’s not likely that Abu Dhabi would let Dubai founder, analysts say. But there are major risks ahead, led by the weakness in the euro zone and the danger of Greek default. Instability in Europe would make it much harder for Dubai to roll over its maturing debt, the IMF warned in its recent report. Yet continued strength in Asian economies is helping to boost Dubai Inc.’s bottom line. “It’s a cliché, but its position as a hub helps drive that business,” says Moody’s Howladar. “In four or five hours’ flying time, you have a couple of billion people in both directions.” Seaport operator DP World recently pointed to strong business in Asia as the main factor boosting cargo volumes at its ports by 9.5 percent in the first quarter of this year. The bulk of the gains came from DP World’s businesses in the Indian subcontinent and in Far East markets, which together saw a 14.6 percent jump in trade. Dubai International Airport has also reported double-digit growth. Passenger traffic in March reached 4.85 million, an increase of 15.4 percent over the same month in 2011. March was the third straight month that the airport exceeded the 4.5 million mark. Traffic for the first quarter was up 16.1 percent. Dubai is leveraging the prosperous airport, and other solid parts of its economy, to raise capital. Officials said recently they were looking at financing an expansion of the airport by securitizing revenue from Dubai Duty Free, the airport’s giant mall. Do all these efforts mean Dubai has adopted a more sober development philosophy that favors sustainability over glitz? Well, perhaps not. In early May, Drydocks World announced a partnership with a Swiss company to build a series of underwater hotels, the first of which would be located off the shores of Dubai and Abu Dhabi. Plans for the Water Discus Hotel show a futuristic collection of disk-shaped buildings — some submerged beneath the sea and some standing above it on stilts — that would house a deluxe hotel. Rooms would be outfitted with special lighting to enhance views of the sea and marine life. “Our expertise lies in developing future strategies aimed at advancing the construction of technology-driven pioneering projects in the maritime sector,” Khamis Juma Buamim, Drydocks’ chairman, said in a statement.
完全由迪拜银行持有贷款的10.6％的不良贷款，IMF表示，这比可以通过其他5个百分点，今年跳，如果当局设法重新安排其他政府相关实体的债务。尽管稳定的房地产市场显示出的迹象，楼价已经由约60％自2008年以来下降了，而空置率范围从零售物业20％为办公楼30％。迪拜慢慢愈合，但对于它的烦恼没有快速补救。“迪拜解决其问题的唯一办法就是促进经济增长和创造收入，以及贸易方面的出路，”尼尔·卡斯伯特，在律师事务所SNR丹顿的迪拜办事处的高级合伙人。“随着时间的推移它会发生。一个有趣的问题是，如何长时间的银行很乐意继续推出期限？”到目前为止，银行已经别无选择，只能这样做，当局已采取的这一事实充分利用。Exotix, a London-based investment bank specializing in frontier markets, has dubbed the authorities’ strategy “the four B’s” — “bail out bondholders, burn the banks” — and that formula has been remarkably successful, says Ahmad Alanani, the firm’s Dubai-based director of fixed-income sales. “Aside from the speed at which they’ve managed to restructure, what surprised me the most were the terms that they’re getting away with,” he says. “They have pushed the banks to the limits, both local and international.” In April, for example, Dubai International Capital, a private equity firm owned by the emirate’s ruler, Sheikh Mohammed bin-Rashid al-Maktoum, persuaded its lenders — including HSBC Holdings, Lloyds Banking Group and Royal Bank of Scotland Group — to stretch out the maturity of $2.15 billion in loans by five years at an interest rate of just 2 percent. The banks also agreed to extend the maturity of an additional $350 million in loans by three years. Dubai Group, the sheikh’s main financial services holding company, is currently holding talks with lenders in a bid to restructure as much as $10 billion in bank debt. Exotix estimates that Dubai so far has completed six bank debt restructurings, covering $21.9 billion of the GREs’ total bank debt of $34 billion. That is much more than Alanani thought would be possible not long ago. “I was definitely bearish in 2010,” he says. “The restructuring is going so much better than what I was expecting.” What explains the success? Bankers say Dubai has aggressively pursued its debt restructuring strategy from a position of surprising strength. International banks want to preserve their existing commercial ties in the emirate and to continue to do business there, a fact that the emirate is not shy in pointing out during negotiations. “As for local banks, the Dubai government is sitting on both sides of the negotiating table,” Alanani says. “They have a controlling interest in the banks, or there are political relationships that come into play.” Dubai-based Emirates NBD Bank, which is 56 percent government-owned, has been a party in all six of the completed restructurings and is involved in debt talks with five other entities. Khalid Howladar, senior credit officer at Moody’s Investors Service in Dubai, says the strategy works because it forces the creditors to look beyond their own positions and focus on protecting the emirate’s entire financial ecosystem. “The banks take the initial hit and take on the refinancing burden,” he says. “But if creditors were to foreclose, that would trigger a default, creating a systemic stress that affects the entire system — the banks, the corporates and the government.” Even as the global credit crunch began to deflate the Dubai economy in late 2009, Eric Swats, head of asset management at Rasmala Investment Bank in Dubai, saw opportunity. At the time, debts of sovereign-backed entities were trading for as little as 15 cents on the dollar, which the securities firm considered to be an overreaction. “We felt quite confident that the baby was being thrown out with the bathwater,” Swats says. So Rasmala set up a fixed-income fund in March 2009 to invest solely in the debt of companies in the UAE, including those in Dubai. “The bondholders would be paid in full because the local population owns some of those bonds,” Swats says. “The rulers would not default on their own.” Rasmala invested a few million dollars of its own capital in the now-$40 million fund, which it expanded in 2010 to cover the entire Gulf Cooperation Council, a group that encompasses Bahrain, Kuwait, Oman, Qatar and Saudi Arabia as well as the UAE. The markets are responding to Dubai’s strategy. Honoring bondholder obligations has helped restore the emirate’s creditworthiness, allowing the government and its entities to tap the markets. In April, Dubai’s Department of Finance issued a $1.25 billion sukuk through its trust certificate issuance program, which was established in October 2009. The deal included a five-year, $600 million tranche priced to yield 4.9 percent, or 403.1 basis points over comparable U.S. Treasuries, and a ten-year, $625 million tranche priced to yield 6.45 percent, or 445.7 basis points over Treasuries. By comparison, the department had to pay 6.39 percent to sell a five-year sukuk in 2009. Citigroup, Dubai Islamic Bank, HSBC and the National Bank of Abu Dhabi were book runners on the deal. With $4.5 billion in orders, Dubai’s sukuk was three times oversubscribed. “Investors were happy with the steps taken by the government over the last three years to counter the impact of financial crisis and prudent measures to control costs and manage its budget deficit,” said Abdulrahman al-Saleh, director general of the Dubai Department of Finance, in a statement. The sukuk was also supported by a healthy appetite for Islamic investments, says Adnan Halawi, head of fixed income at Zawya, a Dubai-based financial news and data provider. Just a few days before the Department of Finance’s sukuk, an issue of $1.75 billion by Saudi Electricity Co. had attracted demand of more than $15 billion. Like Saudi Electricity, Dubai wanted to tap into that investor base: institutions and family offices in the Arab world that want to invest only in instruments that adhere to shari’a law, which prohibits the levying of interest or investing in entities involved in forbidden activities such as gambling or alcohol. Halawi says the sukuk’s success illustrates the progress that Dubai has made. In late 2009 the emirate appeared to be on the verge of defaulting after state-owned Dubai World shocked global markets by declaring that it would seek a standstill on the $25 billion in debt it had racked up during the boom years. Today, Dubai is accessing the capital markets at historically low rates, says Exotix’s Alanani. “The bond market has forgiven Dubai completely,” he adds. “It really shows how the markets are so myopic.” Other market indicators also suggest growing confidence in Dubai. Credit default swaps on the emirate’s debt were trading at 385 basis points late last month, well below the peak of 974 basis points in February 2009 but well above precrisis levels of 154 basis points in August 2008, according to financial information provider Markit. CDS rates on Dubai Holding’s debt stood at 939 basis points last month, down from a peak of 2,176 in December 2009. Even in situations where creditors have balked at Dubai’s restructuring plans, the emirate has largely succeeded in getting its way. In February, New York–based Monarch Alternative Capital, which invests largely in distressed debt, won a $45.5 million claim in the U.K.’s High Court against Drydocks World, a shipbuilding and repair business with operations in Dubai, Indonesia and Singapore. The hedge fund firm is among a minority group of creditors fighting a proposed $2.2 billion restructuring plan that includes a five-year moratorium on debt repayments. A few weeks after the High Court ruling, however, Drydocks filed a claim with a special tribunal at the Dubai International Financial Center, which operates and regulates Dubai’s financial marketplace. The claim was filed under Decree 57, which Sheikh Mohammed laid down in 2009 to govern the debt restructuring at Dubai World and its subsidiaries. The decree states that if at least two thirds of creditors agree to a restructuring proposal, the tribunal has the power to make it binding on others involved in the claim. Drydocks’ filing, which effectively negated the U.K. ruling, was the first time a Dubai entity had used the decree. Unlike bank creditors, Monarch wasn’t really interested in preserving the financial ecosystem in Dubai, says Moody’s Howladar. “They’re not worried about the long-term economic viability in Dubai,” he notes. “They’re trying to maximize their gain, which is completely rational.” Drydocks’ restructuring plan seemed to be on its way to completion, but talks stalled again after an early-May ruling by the Singapore Court of Appeal that put into doubt the ability of a portion of the creditor group to gain control of a drilling rig in exchange for dropping its claims. Now Drydocks’ management says it expects to finalize its plans by August. Drydocks is not the only high-profile debt restructuring on the horizon. This month a $1.25 billion sukuk issued by DIFC Investments matures. DIFC Investments owns and operates office buildings in the Dubai International Financial Center, a complex where many investment and commercial banks have their Middle East headquarters. The firm reportedly plans to pay off the debt by raising at least $900 million through a five-year syndicated loan and using its own cash for the remainder. “Dubai leaders have been adamant that the DIFC [sukuk] would be repaid,” says Karim Nassif, a credit analyst at Standard & Poor’s in Dubai. “What’s not clear is how the debt would be settled.” Some observers speculate that the Department of Finance could use some of the proceeds from its recent sukuk issue to cover DIFC’s obligation. In the meantime, S&P placed DIFC on credit watch in April, indicating a 50-50 chance that the agency would lower its B+ rating within 90 days. DIFC Investments sold the floating-rate sukuk in 2007, and like other Dubai entities it hopes to sell assets to raise the $1 billion it needs to pay off its debt. Among the assets said to be on the block is SmartStream, a software company that provides data to banks, bought by DIFC Investments in 2007. Jebel Ali Free Zone, an entity known as Jafza that provides offices, warehouses and land to companies in Dubai, is facing a November due date for a $2 billion sukuk it issued in 2007. In a filing with Nasdaq Dubai in early May, the free zone said it wanted to introduce a call option to repay its debt six months ahead of schedule; this would give Jafza flexibility to redeem the sukuk with fresh bank financing. The biggest single financing hurdle on the horizon is two years off, when the $20 billion Dubai Financial Support Fund comes due. That bailout fund was extended in equal portions by the UAE central bank and the government of Abu Dhabi, the wealthiest of the seven emirates in the federation, along with a consortium of Abu Dhabi–based commercial banks. In the meantime, the recent sukuk issues and debt restructurings are buying time for Dubai to get its house in order, says Moody’s Howladar. “They’re hoping that in the interim the operating environment and global markets will improve,” making asset sales and other types of income-generating measures viable, he says. Dubai Holding and DIFC Investments had about $870 million and $457 million, respectively, in assets classified as “held for sale,” Moody’s reports, citing year-end 2010 financial statements. An improvement in the local economy, if sustained, should help Dubai get back on track. The IMF predicts that the economy will grow by 3.7 percent this year, driven by stronger trade and a revival of tourism. “Dubai has bounced back and managed to shift the focus and attention onto those segments of the economy that are doing phenomenally well: the three pillars of logistics, trade and tourism,” says Exotix’s Alanani. Regional political trends have given Dubai a boost. In the year since the Arab Spring movement began, Gulf governments have granted their citizens lavish boosts in already generous welfare packages, including pay raises of 50 percent or more, in a bid to forestall domestic instability. “If you’re from Saudi or Qatar, the nearest holiday is Dubai,” says Moody’s Howladar. And unrest in Bahrain and North Africa has sent businesses and high-net-worth refugees fleeing to Dubai. Sibling emirate Abu Dhabi will likely bridge any liquidity gap Dubai might face. Abu Dhabi recently has had to pump up its own cash-strapped GREs following a construction spree. But with a sovereign wealth fund fattened by the revenue from $120-a-barrel oil, it’s not likely that Abu Dhabi would let Dubai founder, analysts say. But there are major risks ahead, led by the weakness in the euro zone and the danger of Greek default. Instability in Europe would make it much harder for Dubai to roll over its maturing debt, the IMF warned in its recent report. Yet continued strength in Asian economies is helping to boost Dubai Inc.’s bottom line. “It’s a cliché, but its position as a hub helps drive that business,” says Moody’s Howladar. “In four or five hours’ flying time, you have a couple of billion people in both directions.” Seaport operator DP World recently pointed to strong business in Asia as the main factor boosting cargo volumes at its ports by 9.5 percent in the first quarter of this year. The bulk of the gains came from DP World’s businesses in the Indian subcontinent and in Far East markets, which together saw a 14.6 percent jump in trade. Dubai International Airport has also reported double-digit growth. Passenger traffic in March reached 4.85 million, an increase of 15.4 percent over the same month in 2011. March was the third straight month that the airport exceeded the 4.5 million mark. Traffic for the first quarter was up 16.1 percent. Dubai is leveraging the prosperous airport, and other solid parts of its economy, to raise capital. Officials said recently they were looking at financing an expansion of the airport by securitizing revenue from Dubai Duty Free, the airport’s giant mall. Do all these efforts mean Dubai has adopted a more sober development philosophy that favors sustainability over glitz? Well, perhaps not. In early May, Drydocks World announced a partnership with a Swiss company to build a series of underwater hotels, the first of which would be located off the shores of Dubai and Abu Dhabi. Plans for the Water Discus Hotel show a futuristic collection of disk-shaped buildings — some submerged beneath the sea and some standing above it on stilts — that would house a deluxe hotel. Rooms would be outfitted with special lighting to enhance views of the sea and marine life. “Our expertise lies in developing future strategies aimed at advancing the construction of technology-driven pioneering projects in the maritime sector,” Khamis Juma Buamim, Drydocks’ chairman, said in a statement.考虑到迪拜因为在巨大的棕榈树形状的人造岛屿上开发豪华住宅等宏伟项目而陷入困境，水下酒店的宣布引起了不少金融和法律专家的惊讶，他们认为，如果迪拜想要恢复金融健康，就需要保持清醒的态度。正如SNR Denton的Cuthbert所说，“Drydocks需要专注于它的核心业务，而不是酒店，更别说水下业务了。“••