Sheik Mohammed bin Rashid al-Maktoum, right, attends the Dubai World Cup, March 28
A few years ago, an adviser went to Sheik Mohammed bin Rashid al-Maktoum with a plan for a tall office building. "Only 90 stories?" the ruler of Dubai asked. The aide was sent back to the drawing board, with instructions to design the highest structure not just in Dubai, not just in the Middle East, but in the world. When the Burj Dubai has its grand opening in January, it will be an 818-meter monument to the visionary autocrat who dreamed the Dubai dream — and, as it turns out, a conspicuous symbol of the hyper-ambition that now threatens the emirate with financial ruin.
Sheik Mo, as he's dubbed by the media, was tweeting in London last week when officials back home stunned financial markets by announcing a request for a six-month repayment standstill on part of the sheikdom's $80 billion debt. The immediate issue is Dubai's inability to come through on a $3.52 billion tranche due in mid-December. Yet, with some 400 property projects already reportedly frozen in Dubai, the news raised the specter of a gigantic default that would sink exposed creditors around the world. "Inspired by Islamic artifacts," read the sheik's post on Twitter during a visit to the British Museum as share prices from Tokyo to New York City were about to plunge in response to Dubai's announcement.
While the Anglophile sheik kept a stiff upper lip, Dubai's inability to pay its debts is a heavy blow to an ego that easily dwarfs Dubai's gleaming new 160-story skyscraper. In the wake of the 2008 global financial meltdown, Sheik Mohammed repeatedly waved off predictions of Dubai's demise, staunchly defended his economic development model and dismissed Western media criticism as a bigoted slur on an Arab success story. "I can safely say that we have succeeded in containing the risks of the global financial crisis in record time," he said last April. Indeed, even as the property bubble was bursting and throwing thousands out of work in his realm a year ago, Dubai played host to probably the biggest party ever thrown in the Middle East: a $20 million red-carpet extravaganza, with fireworks visible from outer space, to celebrate the opening of the $1.5 billion Atlantis hotel and resort.
Jealous rivals and cynical pundits will revel in Sheik Mohammed's fall from grace, but none can deny Dubai's remarkable accomplishments — or ignore the fact that only an ambitious dreamer could have made them happen. In the 1980s, when Dubai's neighbors were either hibernating behind a curtain of oil wealth or dabbling, sometimes disastrously, in Middle East politics, Sheik Mohammed began transforming oil-poor Dubai from an Arab backwater into a global city. Within a decade Dubai had a world-class air carrier in Emirates Airlines and a glamorous, iconic "seven-star" hotel, the Burj al-Arab, as high as the Eiffel Tower. Within another decade, Dubai had become truly a global hub — the largest international financial center between Singapore and Europe, a regional headquarters for global brands from investment banking to bespoke tailoring, and a destination for more than 6 million tourists a year.
"In the beginning," Sheik Mohammed once told an Arab journalist, "they said that Dubai was crazy." Certainly few Arab leaders have demonstrated such a relentless drive to succeed. He imagined Dubai as a great city from Islam's rich heritage, a Baghdad or a Cordoba. His immense appetite for work is matched by a passion for play. He is a world-class thoroughbred racer and breeder and, at 62, he remains a celebrated equestrian who engages in arduous endurance races across hundreds of miles of terrain. Doubtless it takes a politician of supreme self-confidence not only to write Arabic poetry but to post it in volumes on his website. In an interview with a Kuwaiti newspaper in 2003, the sheik explained what linked all his endeavors: "I love success. I despise failure."
It would thus be crazy to write off Sheik Mohammed, or Dubai, for that matter. The sheik is a hereditary leader whose ruling tribal lines date back to 1833. Although he only formally became Dubai's ruler in 2006 upon the death of a brother, he has been the driving force behind the emirate for three decades. Of equal importance, his ambition and competence have made him a leading figure — presently serving as Vice President, Prime Minister and Defense Minister — in the United Arab Emirates, the country created by a confederation of seven Arab sheikdoms in 1971. No leader in the U.A.E., or perhaps in the Arab world at large, can rival Sheik Mohammed's global connections in politics and business.
For a lifeline out of the crisis, Sheik Mohammed will certainly look again to Abu Dhabi, whose vast oil deposits make it by far the richest U.A.E. entity. It stepped up with $10 billion in support immediately after the global crash in 2008 and can be expected to do so once more; Abu Dhabi's ruling al-Nahyan family, as cautious as the al-Maktoums are daring, knows that it, too, will be dragged back by the demise of Dubai. A glance at the $600 billion–plus balance sheet of Abu Dhabi's sovereign wealth fund puts Dubai's debt crisis in a softer light. And, as far as Dubai's leaders are concerned, the problem is largely limited to egregious overborrowing by one company in one sector: Nakheel, the Dubai World subsidiary behind huge property projects like the Palm and the World, built on injected sand off the Gulf coast. "It will take a bit of time, but Dubai will come back," a Dubai insider told TIME. "It will come back stronger, because the crisis will help create a more sustainable model for the future."
That remains to be seen, but the world cannot afford the failure of Sheik Mohammed. Whatever Dubai's excesses, this metropolis on the desert edge — not Cairo, Beirut, Tehran or Tel Aviv — has become the Middle East's crossroads of cooperation. In a region where conflicts still rage, Dubai has become a place where Arabs and others have learned to go to build a future together. In a 2007 speech to international business leaders, Sheik Mohammed chastised Arabs who preferred "to sit around waiting, praising our glorious past and blaming others for our failures and our problems." Instead, he said, "We have to arm ourselves with courage and work quickly and seriously, to tackle the reasons that put our region behind the rest of the world." Sheik Mohammed is a dreamer whose ego proved too large to contain. But his big dream remains the Middle East's hope.