Asia's Muslim miracle state about to go bust

Dubai, site of the world's tallest building and largest shopping mall, and only recently something of an economic miracle, is in serious trouble:

Concerns about Dubai's ability to repay some of its debts have sent share markets around the world reeling.

Dubai is seeking to delay the repayment of billions of dollars in debt held by the partly government-run company Dubai World.

Around 40% of this debt is owed to European banks, which are apparently sitting on a mountain of very iffy loans to developing countries.

Update: All of that extravagant spending and wheeling and dealing in the deserts of Dubai is going to prove costly even for those who had nothing to do with the excesses:

Australian shares have plunged in the wake of the Dubai Government asking for a six-month debt moratorium for its investment vehicle, Dubai World.

At 1200 AEDT, the benchmark S&P/ASX200 index was down 115.8 points, or 2.46 per cent, at 4,592.80 points, while the broader All Ordinaries index had fallen 112.2 points, or 2.37 per cent, to 4,615.4 points.

Macquarie Private Wealth associate director Lucinda Chan said the news had "shocked" the market following what had been a good recovery in markets worldwide from the global financial crisis.

I'm just guessing that filling all of the rentable space in the magnificent Burj Dunai might prove difficult. It could turn out to be the world's tallest white elephant.