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In global crisis, oil insulates Gulf

Economists say that Arab states such as Saudi Arabia will feel the pinch, but a year of record oil prices provides a deep cushion.

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Credit worries? Arab developers appear confident the global economic crisis will not slow down building in the Gulf. Here, a man examines a project slated for Dubai.

Kamran Jebreili/AP

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Against the backdrop of an imploding global financial system, one of the world's richest men unveiled plans to build the world's tallest building in Saudi Arabia.

Prince Alwaleed bin Talal bin Abdul Aziz revealed a display model of Kingdom City, a $26.7 billion mini-city to be constructed near the Red Sea port of Jeddah. At its center will be a tower more than a kilometer high (the exact height is a secret) for offices, luxury residences, and a five-star hotel.

With a fortune estimated by Forbes at $21 billion, Prince Alwaleed, chairman of Kingdom Holding Company, doesn't have to worry about getting a line of credit, even in these financially shaky times.

Still, his apparent confidence about the future reflects the predominant view in oil-rich Saudi Arabia and its Gulf neighbors about how the fiscal tsunami sweeping the rest of the globe may affect them.

Despite repercussions here that have included a downward slide in oil prices and trouble in stock markets, government officials and outside experts forecast that their region will suffer, but not as much as most.

Saudi economist and consultant Ihsan Buhulaiga says that events emanating from Wall Street in recent weeks have created "a very serious crisis" already impacting Gulf nations.

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