DUBAI CRISIS: WHAT AILS DUBAI? AND WHY SHOULD WE CARE?
In order to transform its economy as a major tourist and financial hub, Dubai borrowed US$80bn. However, it suffered a massive property slump in last year’s credit crisis. Now, it is not able to repay its liabilities, and asking borrowers to postpone repayments. There were 53 lakh Indians in the Gulf, of which 31% were in the UAE, mostly employed by construction sector for Dubai’s real estate boom. The Gulf region accounts for over half the total inward remittances worth over USD 25 billion annually from expatriate Indians, out of which 10% of overall remittances to India could be from construction workers. If Dubai were to default, there would be repercussion in other parts of world, where banking would take a hit from lending to Dubai. Though the overall size of the liabilities are not very big compared to US banking problems, this could be a taken as an excuse for the markets to correct at lower levels.
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PURPOSE & DISCLAIMER:
For the first time in my life i am doing something that i am good at, in public. This blog is purely a cut-copy-paste work baring a few personal views. Their is a glut of sites, blogs, pages and views about investment & savings. Still understanding and finding the right instrument is difficult. This is an endeavor to simplify the complicated financial jargons and products to make it understood by laymen.
As the URL name suggests, it’s for laymen by a layman of finance. This blog is strictly meant for me, my family and my friends and their few friends. The blog is not meant for experts & gurus of finance.
The author of this page is not a registered financial advisor. One should not construe anything written here to be financial advice. All information is a point of view and is for educational and informational use only.