Dubai: The World comes down to earth

Dubai is one of those places where apparently limitless amounts of money have fuelled stupendous excess.
There's the Burj Al Arab, the giant hotel that reaches into the sky like an unfurling sail, has Rolls-Royces to run around in and gold taps round every corner.
Then there's The Palm, the man-made archipelago where celebs and footballers have invested in an exclusive crescent of private islands just off the Dubai coast. A few miles down the coast is The World, an even bigger private archipelago built in the shape of a globe.
You wouldn't call it modest. But it may be about to learn a few lessons in humility, for it turns out that the money wasn't so limitless after all.
Yesterday, the London Stock Exchange had one of its worst days in eight months as investors got the shakes when they learned that Dubai may be about to default on the £48bn it owes investors.
And one of the most hobbled outfits of the lot is the company behind The World.
Why would that bother the London Stock Exchange? Because it turns out that some of our banks are owed rather a lot of that money – including, wait for it, the Royal Bank of Scotland.
So, here we go again.
This unpleasant surprise says two things.
It shows once again that the global financial markets that began to emerge at the end of the 20th century are still waiting for some 21st century control systems to kick in.
But the real shock for investors has been the spectre of a part of the oil-rich Middle East suggesting it might need to go cap in hand to investors.
Weren't these supposed to be the rich guys – the last men standing after the credit crunch?
Dubai is part of the United Arab Emirates, the federation of states around the Arabian Gulf that seemed to turn into a giant construction site when the global economy was at its height.
Now, one of the reasons why stock markets have been a-quiver is that it wasn't clear whether the other emirates were going to do the decent thing and bail Dubai out. This is partly because the way state corporations operate in the UAE is a lot less open than it is here.
But this isn't the first time that Dubai has had to borrow a few quid, and the fear was that its bigger brother, Abu Dhabi, might leave it to sink or swim – taking the loans from UK banks with it.
To put it in perspective, the billions involved are small compared to the amount of money that got flushed down the toilet when financial markets keeled over last year.
Here we are a year on from the banking collapse and even oil Sheikhs are trying to renegotiate their credit card debts. What has The World come to?