Dubai has borrowed $80billion (£48bn) to finance construction designed to reinvent it as a centre for tourism. But with the real estate market collapsing, the millionaire's playground is sliding into financial disaster.
Dubai World, the state's main holding company, which owns assets ranging from the iconic Palm Island and various ports around the world, sent the world's stock markets into a panic last week with the news that it wants creditors to give it a six-month standstill on its debts. It owes some $59bn.
But with neighbouring Abu Dhabi set to bail out Dubai, Sheikh Mohammed, who is vice-president of the United Arab Emirates, will still continue his racing interests.
That is also good news for the Dubai World Cup, which takes place on 27 March at the new Meydan racecourse. The grandstand, which will hold 80,000 people, has cost £1.2bn alone.
But the coming months are certain to be difficult for the Sheikh.
One bloodstock agent, who spoke under condition of anonymity, said: "His involvement may be good for British racing, but continuing to splash out at the sales while Dubai World owes a fortune to creditors clearly sends the wrong message. Is it ethically correct?
"It will be interesting to see what people make of the opening of Meydan, with all its opulence, while Dubai is in financial crisis. I should imagine Sheikh Mohammed is going to feel very awkward."
