Dubai doesn't have the oil and gas wealth of its neighbours, so it borrowed heavily to expand aggressively into tourism and real estate
A week after concerns about debt problems at one of Dubai's biggest firms sent ripples around the financial world, Malcolm Borthwick, editor of the BBC's Middle East Business Report asks British ex-pats and Emiratis about the lasting impact of this turbulent period.
Property company Nakheel made Dubai famous with its daring and ambitious man-made islands.
Expats say Dubai's roads are now a lot quieter
The company's slogan is "Where vision inspires humanity" and its projects have captured the imagination of investors around the world.
Some of them aimed to make a quick buck selling off-plan properties at a profit before they were completed. Others just wanted to live or retire in the sun.
Three palm shaped islands are planned, one of which is up and running, and The World, a cluster of islands kilometres out at sea.
Nakheel is also the company at the heart of Dubai World - the group whose request last week for more time to pay off its massive debts sent investors around the world running for cover.
I went to the Palm Jebel Ali, the second in Nakheel's palm trilogy, with one investor who has bought a villa there.
It is a vast manmade palm-shaped island, stretching kilometres out to sea, but the cranes stand idle and we couldn't see any construction work going on.
She was due to move in this year, but now doesn't know when it will be ready.
She is part of a group of 600 homeowners who are unhappy about the delays in the delivery and registration of their properties.
Climate of fear
Dubai's ruler says the Emirate is misunderstood
There is a climate of fear among property investors here, where property prices have fallen 50% from their peak.
Some talk of being intimidated or even threatened by developers after airing their grievances and many won't talk to the press.
The British investor I spoke to didn't want to be identified for fear of reprisals or being forced to leave the country.
"The decision for Nakheel to ask for more time to pay their debt will have an impact on us," she said.
"We thought we were coming out of recession and the market was coming back. But because of what has happened in the last week, people are going to start selling their investments.
"I know people who are going down to the stock market and just want to take their money out."
Outside the English Pub on Dubai's Creek there is an old red phone box. Inside, is a crowd of punters, most of whom have come to watch English football on television.
"I don't think it will have much difference on people who live here," said Wayne Smith from Sheffield in the north of England.
"It may cause some problems on the big projects, but everything seems all right as far as we can see with the naked eye. Dubai's a great place to live."
His partner remembers a few years ago when three times as many people were arriving in Dubai as were leaving. But earlier this year this trend reversed, she said.
"People who are living here know what's happening.
"There have been a lot of redundancies and there are certainly not as many people on the roads. Unfortunately expats are having to move to other countries or back home to find work."
But many Emiratis here feel the press has been overly eager to attack Dubai.
"One can call it a conniving propaganda which has targeted Dubai," said local businessman Ashraf Abdul Hadi who runs runs the Bin Hadi Group, a real estate and trading company.
"They didn't draw a line between the government of Dubai and private companies. When you go for debts on private companies you always go for rescheduling payments. The media takes it as an opportunity to attack Dubai."
Many investors believed that either Dubai or the Federal Government of Abu Dhabi would step in to pay off Dubai World's debt.
But as markets panicked and investors digested the shock news, the Government of Dubai sought to distance itself from underwriting Dubai World's debt saying that it was private and not sovereign debt - even though it is a government-backed company.
This has been a public relations disaster for Dubai on a big scale. Dubai's ruler feels the Emirate is misunderstood and investors feel they have been mislead.
But to write off Dubai would be premature. It is a gateway to the Middle East for many international companies and its infrastructure is years ahead of its neighbours.