Affect of Recession in the Uae Economy

Years ago people who sacrificed their sleep, family, food, laughter and other joys of life were called ‘Soldiers’ but today they are called ‘Shareholders’. Shareholders across the globe are in peril including Prince Walid Bin Talal, who had, at one stage lost about 5 billion dollars. The Foreign Institutional Investors (FIIs) withdrew 11 billion dollars from the Indian stock market during the crisis and left the stock market reeling.

The global financial crisis is sucking countries into a world of deep recession. The effects seem to be, actually, beyond the imagination of political leaders of major economies. There are conflicting statements from economists on how long the crisis is expected to last or if we have reached the end of the tunnel; most analysts and economists are noncommittal. Governments are taking some serious, unseen actions but we need to wait and watch for the outcome.

Dubai suffered the world’s steepest property slump in the global recession, with home prices dropping 50 percent from their 2008 peak, according to Deutsche Bank AG.

As the CBC notes, things went South quickly in Dubai: Hundreds of billions of dollars worth of building projects were delayed or cancelled. Thousands of jobs disappeared. Dubai, playground of the über-extravagant, suddenly found itself facing the very real possibility that its biggest state-owned company, Dubai World, could go into bankruptcy. It warned it was having trouble making debt payments on $59 billion US — money borrowed to pay for all the excess.

Global Impact

The CBC also notes that Dubai World has holdings worldwide:

Dubai World is Dubai’s main holding and investment enterprise, but its holdings range far beyond the Persian Gulf area … Another Dubai World holding — DP World — operates Centerm, a container terminal in Vancouver’s inner harbour. DP World acquired the terminal when it bought the marine terminal assets of P&O Ports in 2006, and plans to spend $140 million to expand it. That...