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Reality bites Dubai

The emirate is beginning to recover from the financial shocks of the past year. But several challenges remain, not least servicing its large debt pile. Sudip Roy reports.

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SEPARATING MYTH FROM reality is not easy in any developing economy and never more so than in Dubai. This is a city fuelled by rumour, exaggeration and excess.

Mohamed Alabbar, Emaar

"I thought I was a conservative. I think I could have been more conservative"

Mohamed Alabbar, Emaar

But thanks to the global economic shocks some of the hyperbole that accompanied Dubai’s transformation over the past decade from desert to high-octane urban metropolis has dissipated. Even the emirate’s biggest cheerleaders, such as Mohamed Alabbar, chairman of Emaar Properties, are adopting a more cautious tone. "We’ve learned the art of managing business, which has changed forever in my opinion," Alabbar said in a recent interview with CNN. "I thought I was a conservative. I think I could have been more conservative." He added: "I am much harsher in the operation now." It’s as close to an admission as one will get from a senior Emirati that mistakes were made; that Dubai’s phenomenal growth was unsustainable.