It seems that Dubai is progressing well in its quest to reduce the number of private vehicles on the roads by making its mass transit more accessible to users. Latest figures show that more than 10% of the population now use public transport (up from only 6% two years ago) with over 208 million passengers recorded in H1. Of that number, 94 million used taxis, 54 million public buses, 53 million the metro and 7 million water transport.

Another feather in Dubai’s cap came with the news that it will host the prestigious World Energy Forum 2012 in October. This will be the first time that the convention has not taken place at the UN in New York and will prove to be an eventful period for the emirate’s hotels as attendees will include ministers, ambassadors and other high flying dignitaries.

A recent report has indicated that Dubai has over hotel 11,000 rooms in construction phase which will add to its current inventory of over 75,000 rooms in its 580 listed hotels. These will be sorely needed if the annual growth (23% last year) continues in the same upward trend.

The real estate sector continues to be a harbinger of positive news for the local economy. The value of residential property transactions in H1 was over US$ 1.9 billion of which US$ 1.1 billion related to Q2 activity. An additional 6,100 new units, ready in H2, will bring Dubai’s villa inventory to nearly 65,000 whilst the number of apartments will increase by an additional 12,000 to 414,000 over the same period.

The end of July marks Q2 reporting season for local companies and so far so good. The country’s largest bank, Emirates NBD, came in with H2 profit up a massive 274% to US$ 490 million. The bank’s total assets (US$ 81 billion), customer loans (US$ 57 billion) and customer deposits (US$ 56 billion) were all heading north. In addition, Etisalat announced a 17% Q2 profit increase to US$ 520 million after several quarters of declining returns, with Revenue rising 4% to US$ 2.25 billion.

The DFM Index started the week at a bullish 1536 but as fresh eurozone problems emerge, it weakened almost  2% to close at 1510 – albeit on thin trading of around a daily US$ 35 million. Whilst the beginning of July had seen a mini revival in the local bourse, this will not help some brokerage firms from going out of business. The number of entities has halved since last year and it will be no surprise to see this current figure of 50 halving again before the end of the year.

As global economic gloom continues unabated, there has been a significant easing of investor concerns about the state of Dubai’s creditworthiness. This is reflected in the fact that the cost of insuring Dubai’s sovereign debt is at its lowest point since November 2009 with 10 year bond yields heading well south of 5%.

This rate compares favourably with eurozone countries such as Greece (27.48%), Spain (7.37%) and Italy (6.44%).

Just to confirm that the eurozone is going down the toilet, its lynchpin, Germany, was left reeling with the news that Moody’s had lowered its credit outlook from “stable” to “negative”. Maybe the markets – and apparently most of the world – know more than the vacillating decision-makers who are responsible for this economic mess. It is probably too late for the leaders to be more proactive, rather than reactive, in their approach to solving this massive debt crisis.

To add to the global economic problems, the unusual weather patterns are affecting food supply. Unprecedented drought conditions in the US are being held responsible for soaring food prices, including record highs for both corn and soybeans, and furthermore wheat prices have risen over 50% since the beginning of June. European heat waves have resulted in similar problems. The end result is that there will be inevitable food price hikes everywhere and a situation far worse than the 2008 global food crisis which was the catalyst for social unrest and political changes in so many countries.

As some wise economist pointed out – if the whole world is stuffed then we are all stuffed.

Over the coming weeks, Greek, Spanish and Italian leaders may well be told by the other eurozone countries to “Go Your Own Way”. Whether they do  or not remains to be seen but time is rapidly running out for all stakeholders involved in this debacle, which has got the potential to bring the world to unprecedented political turmoil and social unrest.