The tiny hot and hostile camel ridden desert of the emirate of Dubai spent more than $60 billion building the so-called “Eighth Wonder of the World,”. This was a group of man-made, palm-shaped islands in the Persian Gulf, which attracted billionaires and multi-millionaires from all over the world. Now debt from the faltering venture and other soured investments have put Dubai in the hole for $80 billion.
Real estate values at the Palm Islands are down over 50%, and construction has stopped on further extensions. Even more embarrassing, Dubai had to approach fellow emirate Abu Dhabi with hat in hand to ask for a temporary bailout; in February, Abu Dhabi bought $10 billion in five-year bonds.
As a result, Dubai’s Sheikh Mohammed bin Rashid Al Maktoum’s net worth is down an estimated $6 billion in the past year, making him the biggest loser on Forbes’ annual list of the world’s 15 richest royals. His savior, Abu Dhabi’s ruler, Sheikh Khalifa bin Zayed Al Nahayan, didn’t fare much better. His fortune is down $5 billion thanks to plummeting oil prices, enough for him to slip from second to third among the world’s richest royals.
Though royals largely inherit their riches along with their titles, these monied monarchs are not immune to the global downturn, and they’ve suffered the effects of the global depression along with their subjects. The credit crunch, real estate collapse and stock market declines have wreaked havoc on many of these historic fortunes. Collectively, the richest royals lost $22 billion over the past year, down 17% to $109 billion. Twelve of the 15 are poorer than a year ago; two are worth the same.
Fortune: $12 billion (down $6 billion)
Age: 59
Ruler of Dubai, an emirate of the United Arab Emirates, was forced to ask for a handout from neighbor Abu Dhabi when credit markets tanked. State-owned Dubai World owns DP World Ltd., the third-largest international port operator; Istithmar World, a private equity firm that acquired Barney’s New York in 2007; and Nakheel PJSC, builder of palm-shaped islands in the Persian Gulf. Growth of such assets required high level of borrowing; when credit markets contracted, concerns arose about its $80 billion combined government and state-owned company debt.
After months of bickering, Abu Dhabi bought $10 billion worth of five-year bonds; a permanent fix is still being hammered out. One of the largest racehorse owners in the world, his Darley Stud owns 68 stallions and operates stables in six countries, including Japan, Australia and the U.S.