The global consequences of Dubai's debt problems

FOR years, Dubai strove to capture the imagination of the financial world, projecting its young financial centre as a “global gateway” for capital. Last week it succeeded in grabbing attention. Its announcement that it would delay repayment of the debts of Dubai World, a vast government-owned conglomerate, swept through global markets like one of the blinding sandstorms that occasionally afflict the emirate, obscuring the gleam of its skyscrapers.

Like those storms, Dubai’s announcement was so damaging because it reduced visibility. Investors had assumed that the Dubai government was willing to rescue the indebted conglomerates it sponsors, and that Abu Dhabi, its well-heeled neighbouring emirate, was willing, in turn, to rescue Dubai. In particular, they had looked forward to the full and timely repayment of a $3.5 billion Islamic bond issued by Nakheel, a Dubai World subsidiary, on December 14th. ...

A uranium shortage could derail plans to go nuclear to cut carbon emissions

THERE is an awesome amount of energy tied up in an atom of uranium. Because of that, projections of the price of nuclear power tend to focus on the cost of building the plant rather than that of fuelling it. But proponents of nuclear energy—who argue, correctly, that such plants emit little carbon dioxide—would do well to remember that, like coal and oil, uranium is a finite resource.

Some 60% of the 66,500 tonnes of uranium needed to fuel the world’s existing nuclear power plants is dug fresh from the ground each year. The remaining 40% comes from so-called secondary sources, in the form of recycled fuel or redundant nuclear warheads. The International Atomic Energy Agency, which is a United Nations body, and the Nuclear Energy Agency, which was formed by the rich countries that are members of the Organisation for Economic Co-operation and Development, both reckon that, at present rates, these secondary sources will be exhausted within the next decade or so. ...