DUBAI ECONOMIC CRISIS

INTRODUCTION OF DUBAI
 Dubai is the one of seven Emirate of UAE
 Located at the cross-roads of Asia, Europe
and Africa
 Sunshine, shopping, seaside, sports and
safety -five of the key ingredients that have
earned Dubai a growing reputation as one
of the world's most attractive and rapidly
developing leisure destinations.
 INTRODUCTION OF DUBAI
 Trading and
commercial hub of
the Middle East
 Dubai is well
positioned to attract
tourists
RESOURCES PERCENTAGE OF UAE
SECTORAL COMPOSITION OF
GDP OF DUBAI
 OTHER FACTS AND FIGURES
 Unemployment 4% May (2009)
 GDP growth 7.4% (2008)
 CPI inflation 1.9% April (08 –09)
 National debt $142 billion June 18,09
 INTRODUCTION OF DUBAI
CRISIS
Dubai was another fallout of the global real
estate bubble
 Global financial markets are tumbling
after Dubai World, the government
investment company burdened with $59
billion liabilities, requested for deferment of
debt to its creditors for six months, on 25th
Nov 2009
 INTRODUCTION OF DUBAI
CRISIS
 The Dubai government’s total debt is
estimated at $80 billion
 After 2003- Dubai economic model
More debt & less equity.
 Dubai has accrued debts around 200% of
GDP.
 OVERVIEW OF CRISIS
 Government restrictions were low.
 Dubai’s main development engine- Dubai
world and its real estate arm- NAKHEEL
 Issued NAKHEEL bonds- investors ready
to invest as it was state owned
 Today many bonds are due and cash flows
not enough to pay them back
 OVERVIEW OF CRISIS
 There is a maturity mismatch- the expected
revenue is in the future while liabilities,
including to contractors and suppliers, are
piling up today.