Recession came into picture Dubai World is Government Company having central role in Dubai economy during the construction boom. They borrowed a sum of US $ 60 billion for investing in real estate development . During the recession, investors from USA and other countries whom invested their money at Dubai want it back. Economic growth has fallen sharply from nearly 8 percent in 2008 to under one percent.
What Happened then More than half of the construction projects in the United Arab Emirates, worth $582 billion, have been put on hold.. Some projects are still going ahead to the value of $10 billion bailout from the UAE's capital, Abu Dhabi.. But, many workers are unemployed and stuck here..
Gulf countries Other Gulf countries were in a position / condition to help UAE by providing subsidiaries . The Saudis, along with other states, have concentrated on infrastructure projects and helping the private sector take a larger role in developing the non-oil and gas sectors. Kuwait Funded for Future Generations of $250 billion. Even Libya had provided $50 billion in its Oil Reserve Fund.
Effect on Global Market Economists fear that the latest Dubai financial crisis could have a major impact around the world. So there was a sudden hike in oil price of $42->$70/barrel. Directly affects the global market as the price of crude oil plays the vital role in the global economy.
Effect on Indian Economy A large number of Indian companies have exposure in the region, and over 4.5 million Indians live and work there.. Indian tourists -nearly 5 lakh tourist visit every year –alomost 5% impact on Dubai economy. Indian workers in Dubai–00.05 % remitance to Indian Economy Investment by Indian bankers ,companies are 2% to Dubai economy. Indian exposure to Dubai economy –staggering 10 to 12 % intermsof investing in properties ,hotel and other business.
Indian Companies India export to UAE stood a $23.92 billion in 09 Dubai world crisis effect Realestate, Baking and Constructions business. NagaarjunConstruction have 440 flat project. L&T invested about $20 cr. Voltas of about Rs.400cr.
Present status The Dubai economy is forecast to remain in recession in 2010, the second year in a row that the emirate has experienced negative growth..