This week, Dubai has been hosting the World Economic Forum’s 5th Summit on the Global Agenda, which is a precursor to their annual meeting in Davos. The three-day event was attended by more than 1,000 industry experts whose aim was to discuss the main global problems. No surprise then that they concluded the most pressing of difficulties was the eurozone crisis – and its contagion effect.

It is somewhat ironic that Dubai was chosen as the venue for this prestigious event since the emirate is bucking the global trend by going in the other direction with a market that is thriving despite all the international problems.

Dubai’s flagship, responsible to a large extent for the local boom in the 3 ‘Ts’ – tourism, travel and trade – is Emirates. This week, there was a doubling of its half-year profits as at 30 September, with revenue surging 17% to US$ 9.7 billion and with costs being trimmed, its net profit more than doubled to reach US$ 463 million. Passenger numbers continued to increase – to 18.7 million – whilst load factors were on the right side of 80%. Iata’s Q3 return saw global demand increase by 4.1% over the corresponding period in 2011 whilst ME traffic was more than three times higher at 13.3%.

These figures are staggering when compared to other airlines. For example, Iberia is said to be losing US$ 1,600 per minute which has resulted in their owners, IAG, having to reduce capacity by 15% (25 planes) and cut payroll numbers by 23%. (Even more trouble for the Spanish economy). Philippine Airlines have asked their civil aviation authority to reject Emirates’ application to add extra flights to Manila next year using the reason that they face “a commanding undue advantage”. Some excuse to disguise their own inefficiencies! Then there is Air Canada that restricts Emirates to three flights a week to their country – fifty-three less than the number of EK flights to London, not to mention their other four UK destinations.

The importance of the aviation industry to the burgeoning local economy was reiterated by flydubai’s CEO, Ghaith al Ghaith, as he received the ME’s Low Cost Airline of the year award for the three-year old airline. There is no doubt that the company means business, with the Maldives becoming their 11th new destination in the past year.

Trade – and, in particular, on-line – will receive a boost with the proposed introduction of a PayPal office in Dubai. (Interestingly it is the fourth opening this year of a major internet player, with Facebook, LinkedIn and Twitter already here expanding business interests). It is estimated that the regional online-payments market is worth over US$ 9 billion and PayPal is hoping to double its share to 10% and expects major growth as this segment matures.

The pick-up in the real estate sector is highlighted by the fact that according to a recent report, the UAE has the fastest growing demand for office and retail space in the world as the market saw a 48% net rise in Q3 compared to the previous year. What should be a quiet time for the industry saw commercial property sales in excess of US$ 545 million. It is expected that 2012 will see a further 800k sq mt added to the existing inventory of 6.1 million sq mt. The recovery is a reflection of the stronger economic fundamentals being found in the emirate.

One such company that is benefitting directly from this upturn in the real estate market is Emirates Steel which has seen its production increase by 33% in the first nine months of the year. The recovery in Dubai’s property sector is the main reason that it has seen a 10% upturn in the production of its steel-reinforcing bars and iron rods, commonly used in construction.

Another Jebel Ali-based company, Conares Metal Supply, has launched a new range of rebars following a US$ 85 million capital investment program.

In the same sector, Dubai’s second largest contractor, DSI, announced that it had won three contracts for mechanical, electrical and plumbing work valued at US$ 87 million for two in Abu Dhabi and one for installing utilities in 58 office buildings in Taif, Saudi Arabia. The market is awaiting its upcoming Q3 results, with interest as this year has not been an easy one for the company.

The Dubai Financial Market Index had yet another lacklustre week with a Wednesday close of 1617 – exactly the same as its Sunday opening. The market was closed on Thursday for the Islamic New Year.

Although not in the same league as neighbouring Abu Dhabi, Dubai’s oil sector is showing promising signs with news that oil exploration is on the increase. Currently it pumps daily about 60k barrels (compared to the capital’s 2.6 million + barrels) and is hoping that this figure will rise with potential opportunities especially with on-shore shale fields. If only it can return to the glory days of the early 1990s, when 400k barrels were coming from the emirate’s oilfields.

Whilst Dubai continues to prosper with an air of confidence not seen since the halcyon days of 2006/2007, the same could not be said for other regions. The troublesome Japanese electronics industry epitomises the dire trouble in which that country has fallen. Three of the largest players reported deficits and may be heading for bankruptcy; Sharp and Panasonic have forecast losses this year of US$ 5.6 billion and US$ 9.6 billion respectively whilst Sony’s Q3 loss came in at a comparatively respectable US$ 194 million.

With these three giants on their knees, and its auto industry suffering because of the Chinese boycott and global slowdown, the Japanese economy shrank 0.9% in Q3 and it is widely expected to have already slipped into recession.

In South America, speculation is growing that Argentina will select default rather than settle with its so-called holdout creditors. It is only eleven years ago that the country last reneged on its loan commitments but it had quickly regained the confidence of the capital markets. Now history is about to repeat itself, with President Cristina Fernandez de Kirchner likely to trigger a default as yields on its 20-year euro-denominated bonds rise  4.15 % to a five-month high of 16.93%. This followed a US court ruling that the country must pay holders of debt from its record US$95 billion 2001 default.

Following the US presidential election, all eyes are on that nation’s still-unresolved financial crisis and the so-called fiscal cliff – a raft of tax increases and spending cuts of more than US$ 600 billion that will kick in on 01 January 2013 if the two political parties cannot compromise on how to settle the issue. If no settlement is reached within the next six weeks, the country will probably go into recession.

The eurozone debt crisis is gradually beginning to bite into global growth and unless there is some resolution to the debacle then it is hard to see any positive resolution to the economic malaise. The region‘s economy shrank for the a second quarter and is mired in a recession from which it will take a long time to recover. Increasing unemployment, reduced tax income and increased benefit spending will not help economic recovery or overcome debt repayments by the various governments.

Greece continues to tread water and is being kept afloat by its European partners. The Greek economy is in tatters and simmering civil unrest – as a result of the drastic austerity packages introduced at the behest of the troika – will bring further turmoil to the country.

In Spain, Prime Minister, Mario Rajoy, continues to believe that he will not have to request an international bailout. He will have done well if he can continue this façade until the end of the year.

Meanwhile, eurozone’s second and third largest economies, France and Italy, are rapidly heading in the same direction. France has just lost its AAA rating whilst Italy’s debt at 120% of GDP is second only to Greece. There is worse news on the horizon

The Carnival is Over for Greece and there is a good chance that three other members of Club Med – Spain, Italy and France – will follow.