Dubai World’s delayed payment fallout

The fallout of the Dubai World default, delaying payment on their debts until May 2010 or so, has not yet unfolded. However, three things are apparent: First, the debts of Dubai World, a large corporation dedicated to Dubai’s development, have been referred to interchangeably with the debt of the sovereign state Dubai. Second, the other emirates of the UAE have refused to bail out Dubai/Dubai World. Third, the marketplace is responding in a way that indicates fragility and that it is bracing for more such defaults.

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