Nov. 21 (Bloomberg) -- Dubai defied the economic crisis last night as stars flocked to South African billionaire Sol Kerzner's Atlantis resort for a $20 million party that included the world's largest fireworks display dazzling enough to be seen from space and a performance by pop singer Kylie Minogue.

The 2,000 guests of the Atlantis, located on a man-made island in the shape of a palm, were treated to a champagne reception and an ``Atlantean Feast'' and danced the warm night away to Minogue's performance of ``Better the Devil You Know'' followed by Samantha Ronson, a DJ friend of actress Lindsay Lohan, mixing 1980s pop music.

``I love Dubai, I love the architecture'', basketball player Michael Jordan said in an interview on the red carpet before the party. ``It's the second time I've been here, I'll be back.''

Last night's extravaganza was the latest attempt of the emirate to cling on to its reputation as the international jet set's hub in the Arabian Peninsula, even as the boom may be ending, spending is hurt by the credit crisis and stocks decline. The Standard & Poor's 500 Index dropped 6.7 percent yesterday, bringing the year-to-date decline to 49 percent.

Boom Years

The second-largest sheikhdom in the United Arab Emirates has become the Middle East's premier tourist, financial and commercial destination, benefiting from an inflow of petrodollars and investments from international institutions that have set up offices to tap Persian Gulf wealth after a six-year oil-price boom.

Guests were served a dinner including Atlantic lobster and tiger prawns hosted by Michelin-starred restaurateurs Nobu Matsuhisa and Giorgio Locatelli, who have opened venues in the $1.5 billion Atlantis. The sister of the original Bahamas hotel boasts 1,500 rooms, a dolphin bay and a water park.

The 924 square-meter Bridge Suite, which costs 155,000 dirhams ($42,000) a night excluding breakfast, may be the most expensive hotel room in the world. Atop a curved dome bridging the hotel's two towers, the suite includes a butler service and a 16-seater dining room.

Debt Finance

Moody's Investors Service said Oct. 13 Dubai may need support to finance its $47 billion debt, more than its gross domestic product.

Growth in the U.A.E. may slow to about 4 percent as the financial crisis damps global expansion, Central Bank Governor Sultan Bin Nasser al-Suwaidi said today. On Aug. 28, al-Suwaidi said the economy would expand 6.6 percent this year and ``stay strong through 2009'' if oil prices remained above $60 a barrel. The price of oil has plunged 65 percent from its July peak, to $49 a barrel today, as slowing global growth damps demand.

Bollywood star Priyanka Chopra, clad in a shimmering green floor-length gown and a crown as the ``Goddess of the Atlantis,'' started the fireworks display that some guests found distasteful at a time of crisis, and others saw as an attempt to keep up appearances. The show was designed by Grucci, which has produced displays for six U.S. presidential inaugurations. Fireworks exploded along the 43 kilometer-long palm-shaped shoreline and from each window of the hotel.

Jackson, Branson

Janet Jackson, the singer, and Richard Branson, chairman of Virgin Group Ltd., boogied to Ronson's classics including Aretha Franklin and Bell Biv DeVoe. Lohan, a shoeless Mischa Barton and model Jade Jagger chatted and smoked cigarettes on the steps of the stage.

``We're very aware of the fact that the economy is not great,'' Kerzner, 73, said in a Bloomberg Television interview on Nov. 18. ``Nevertheless, compare that to the $1.5 billion investment and the importance of the return and the coverage that one needs to achieve it, one believes we've built something that's quite unique, on a grand scale, and that deserves and will grab the attention of world media, that's the best way of marketing and launching the product.''

Kerzner is splitting the cost of the party with Dubai government-owned Nakheel PJSC, developer of the Palm. Nakheel, which is planning two larger manmade islands and a 1 kilometer- high tower, said this week it is scaling back some of its projects as the financial crisis squeezes credit facilities and slows the regional property market.

Nakheel is among Dubai state-owned ``highly leveraged companies'' that need capital restructuring, Citigroup Inc. said in a Nov. 18 report. The ``Dubai dream'' may be over as lower oil prices will leave smaller fiscal surpluses among its crude- exporting neighbors to invest in the emirate, the report said.

Sultan bin Sulayem, Nakheel's chairman, declined to discuss the weakening of the real-estate market, responding only, ``I don't think it will get worse.''

To contact the reporter on this story: Ayesha Daya in Dubai adaya1@bloomberg.net

Last Updated: November 21, 2008 06:28 EST