Just when it looked as if the international financial system was finding its feet, suddenly there is a crisis in Dubai, one of the United Arab Emirates, where a Government-owned property development company Dubai World has asked for a moratorium on its debts.

This has serious implications for the world economy and it’s no wonder the stock markets have a bad dose of the jitters. You won’t hear much talk of “green shoots of recovery” for the next few days until the picture becomes a bit clearer.

My colleague Suzanne Lynch writes today: “Tremors from the shock request by Dubai’s flagship government-owned holding company for a debt standstill reverberated in global equity markets yesterday, triggering a steep sell-off in Asia and heavy losses on Wall Street.

“While European markets staged a modest but nervous rally after heavy sell-offs this week, investor sentiment remained jittery amid a scramble to assess the broader fallout of the problems of Dubai World, the developer of some of the world’s most ambitious property projects on the sands of United Arab Emirates.”

The present writer has visited the UAE a number of times. It’s a fascinating part of the world. There are many Irish people making their living there and they must now be rather worried. A piece I wrote in 2002 on an unusual property development scheme gives a flavour of the place:-

Desert island dream 

 (First published in The Irish Times 27 July 2002)

If you ever regretted you weren’t around when the Pyramids were being built, take a trip to Dubai in the United Arab Emirates (UAE) and you can witness the construction of a project which its promoters are calling “the eighth wonder of the world”.

It is difficult not to find Biblical echoes in this development whereby two artificial islands in the shape of a palm-tree are, in the words of the construction company, being “raised out of the sea”. Some 85 cubic metres of rock and sand are being taken from quarries throughout the UAE, a small state in the Persian Gulf with substantial oil reserves.

Dubai is one of seven sheikhdoms in the UAE and is ruled by the wealthy Maktoum family, famous in the racing world, not least in Ireland, for the vast sums they have spent to indulge their passion for horses.

Dubai is also well-known for its duty-free airport but, in recent years, the Maktoums have been developing it as an international tourist destination. That’s one of the motivations for creating The Palm, Jumeirah, and The Palm, Jebel Ali, as the two islands are called.

But the islands will also be residential communities. Over the years, many foreigners have come to work in the UAE, attracted by the fact they pay no tax on their earnings. But until now, non-nationals could not own property and had to rent instead. This will change with The Palm.

The idea is attributed to Sheikh Mohammed bin Rashid al Maktoum who, in addition to being Dubai’s Crown Prince is also Minister of Defence for the UAE. Initially, it was planned to build only one island, but now two identical ones are under construction: the first about 30 minutes’ drive from Dubai airport, the second 15 km further away.

The first of the buildings on The Palm, Jumeirah, will be available for occupation by the end of 2004 with The Palm, Jebel Ali, ready one year later. The cost of reclamation, roads and basic infrastructure is estimated at $ 1.5 billion, provided by the Government of Dubai and various banks, both local and international. Almost 700 construction workers are involved and the equipment for this Pharaoh-like project includes seven dredgers, 15 barges and 14 boats. The first Palm will be mainly residential, the second aimed at attracting tourists. Each Palm is surrounded by a crescent-shaped island, the back of which acts as a protective breakwater. There will be 40 luxury hotels on each of the two crescents, including the Kempinski, Hilton, Le Meridien and Sofitel chains.

A total of 6,000 residences will be built on the two islands, many of them villas with private swimming-pools.

The UAE claims to have more nationalities among its workforce than there are member-states of the United Nations. Cultural diversity reaches new levels with the variety of construction styles available, ranging from “Middle East” to “Tropical”, “Spanish Mexican”, “Gothic”, “Ranch Style”, “Ottoman” or “Mediterranean”.

It might give some visitors a headache but the promoters boast that these varied styles will reflect “the eclectic tastes of the people that will live on The Palm”. The developers make much of the fact that what they call their “unique, colossal, visionary” project is already visible from space – like the Great Wall of China – and they show satellite photographs to prove it. A high-speed monorail adds a futuristic touch.

Expecting him to be shy and retiring like most rich people, I was surprised to discover while researching this article that Sheikh Mohammed has his own state-of-the-art Internet website – www.sheikhmohammed.co.ae – which features material on The Palm ( “Live the eighth wonder of the world”) as well as his latest “quotable quote”, which is: “Whilst reaching for our goals, we must break away from what’s routine, and make creativity intrinsic to everything we do”. You can e-mail him from the website, in a variety of categories ranging from “Thank You messages” to “Poetry”.

The sheikh himself composes poetry (“to express my inner self in an artistic way”) and also sets a special multi-layered riddle each year with a substantial reward for the person who provides a solution in poetic form. You can even send e-mail postcards to your friends from the website with a poem by Sheikh Mohammed, such as ‘Mother’ which is intended for Mother’s Day and concludes “O Mother! Nurturer of true men/May Allah bestow upon you goodness/For your patience and your charity.”

Recently the sheikh decreed that prison inmates who memorised all or part of the Koran should have their sentences reduced.

All this is reminiscent of The Arabian Nights but the sheikh is also a hardheaded businessman and his family are absolute rulers of Dubai which, like the other sheikhdoms of the UAE, does not permit political parties, trade unions or elections. These restrictions have not inhibited foreigners coming to Dubai seeking work and an estimated 98 per cent of the UAE workforce in the private sector consists of non-nationals. The better-paid among them appear to be snapping up houses on The Palm, where prices range from €478,000 to €1.3 million. “We totally sold out the first island,” a spokesman said. A 10 per cent deposit is required and buyers come from the Gulf region, Europe and the Indian subcontinent.

Some observers will find it an exciting development, others may see it as an exercise in questionable taste, but either way it is hard to disagree with the view of promoters that “there is nothing like it under the sun, by the sea or on the water”.