"Dubai model" was the vision of one man

The city state's rapid growth revolved around the ruler Sheikh Mohammed bin Rashid al-Maktoum, who outlined his ideas in a book, "My Vision", where he suggested other Arab countries could replicate Dubai's success.

Now the model -- always controversial among Gulf Arabs since it involved building shining cities in the desert at breakneck speed through the import of foreign residents, finance and labour -- is on the ropes.

Questions will surface over what went wrong.

This week Dubai said it wanted to delay payment on billions of dollars of its total $80 billion debt, sending global markets plummeting as investors feared defaults could hit the global economy just as it was recovering from the financial crisis.

"Where next for the ruling family in Dubai?" said British historian Christopher Davidson. "The massive loss of legitimacy that the ruler is now facing, the massive loss of legitimacy that his son and crown prince face after lying to the World Economic Forum last week -- where do these guys go from here?"

Sheikh Mohammed, whose face and words grace posters all over town, told the forum this month that the worst had passed for Dubai which was well-placed to pursue its development plans.

The news that investment vehicle Dubai World could not pay a $3.5 bln bond was released just before the Muslim Eid al-Adha holiday and UAE national day on Dec. 2. Local media have almost entirely avoided comment on the debacle.

"Dubai could not be more transparent and open about the challenges it is facing due to the global economic downturn as it has been", the English-language Gulf News said. The Arabic daily al-Khaleej praised the UAE's investment climate.

There is uncertainty about what assets are owned personally by the ruling family, directly by the government or simply sponsored either by the ruler or the goverment.

ENVY OF THE REGION

Dubai was the envy of other Gulf states such as Saudi Arabia and Qatar, who nevertheless sought to ape some of Dubai's ideas, such as business free zones, financial centres, advanced infrastructure and welcoming Western capital and expertise.