"The Abu Dhabi building we've been working on in the last five to six years has been stopped, and that's painful," Gehry told Bloomberg News last winter.

Saadiyat is Arabic for "happiness," but the island's travails illustrate a broader, and decidedly unhappy, emerging trend. Abu Dhabi is the wealthiest city in one of the wealthiest countries, and it had long seemed immune to the global financial crisis ravaging Europe and the United States. But the city's economy is finally showing clear signs of deterioration, prompting the first budget cuts in years and threatening the future of Saadiyat and other ambitious projects.

As in so much else of the world, the main culprit is the real-estate sector. Private and state-owned developers built scores of skyscrapers, office buildings, apartment complexes, and gated communities over the past five years, banking on an expectation that Abu Dhabi's population would spike as expatriate business people flooded the city because of its oil, lack of taxes, and safety.

But the economic slowdown in Europe and the U.S. dramatically reduced both the numbers of corporations choosing to expand into the UAE and the numbers of tourists able to afford the high price of vacationing here. That, in turn, has led to a glut of empty buildings and hotel rooms, decimating the city's tourism and real estate markets and dragging down its broader economy.

"The economy of Abu Dhabi is unsustainable," said Nasser bin Ghaith, a British-trained economist in neighboring Dubai. "Every major project in Abu Dhabi begins with petrodollars spent by the government, but at some point these companies have to stand on their own, and they haven't been able to do so."

The slowdown is forcing Abu Dhabi's government to bail out high-profile businesses like Aldar Properties, a major developer that built the city's Formula One race circuit and Ferrari World theme park. The city's government spent nearly $10 billion last year on various forms of financial assistance to Aldar, which is partially state-owned, retiring some of its debt and buying some of its unfinished or underperforming properties, including both the race track and the amusement park.

Still, it's far from clear that the Abu Dhabi government can wring more out of Aldar's projects than the developer itself. Ferrari World and the Formula One circuit are situated on Yas Island, which had been envisioned, like Saadiyat, as a major tourist attraction. Tourists have largely stayed away, however, because of its distance from downtown Abu Dhabi. Stars 'n' Bars, an American-style restaurant overlooking the water, was empty during a visit earlier this week except for a group of heavy-drinking Eastern Europeans taking turns mangling love songs on a karaoke machine. Nearby hotels also appeared largely deserted.