One of the emirate's largest investment companies, state-owned Dubai World, has asked for a delay on repaying its US$60 billion debt until at least May. The company's real estate arm, Nakheel - whose projects include the palm-shaped islands in the Gulf - shoulders the bulk of money due to banks, investment houses and outside development contractors.
This has added to fears among investors that have existed for some time since the recession hit, over the financial health of Dubai. But it gets even worse.
All together, the state-backed networks nicknamed Dubai Inc. are a bewildering US$80 billion in the red and its oil-rich neighbour Abu Dhabi has even opted to let its fellow emirate hang this time after bailing Dubai out earlier this year.