The Impacts of Dubai's Financial Crisis

658 Words3 Pages
Dubai Financial Crisis: Dubai is usually described as a city or country despite in its own right though it's a constituent member of the United Arab Emirates that has six other emirates. The emirate experienced a huge financial crisis that had a huge impact on several economies across the globe as reported by analysts. The financial crisis was characterized by the government's inability to refinance massive debts that was taken by Dubai World, its largest owned company. The major impact of the crisis across the globe contributed to panic situations in financial markets since banks and financial companies experienced losses in global markets. The genesis of Dubai's financial crisis is attributed to the debts that were taken by Dubai World that accounted for approximately 75 percent of the emirate's debt and an estimated 50 percent of Dubai's $25 billion remittances. The company requested for a six-month standstill for the servicing of its $59 billion debt that included a $3.5 billion bond, which was to mature in December 2009. In addition to the normal lack of transparency, the religious holiday in the region contributed to the extreme market conditions that resulted in risk-minimization and defensive actions (Chandler, 2009). One of the countries that suffered from this financial crisis was India because of its huge exposure in the region to the point that there are approximately 4.5 million Indians who live and work in Dubai. The other effects of Dubai's financial
Open Document