Financial Crisis in Dubai: Reasons and Effects

http://hubpages.com/hub/FINANCIAL-CRISIS-IN-DUBAI-REASINS-AND-EFFECTS FINANCIAL CRISIS IN DUBAI-REASONS AND EFFECTS Dubai-economic position That is Dubai-sky piercing towers, rotating buildings, spectacular architectural designs,flow of petro-dollers,broad and clean road notworks, etc,etc.Businessmen, investers, and lusury-seekers, used to visit Dubai with all zeal. Some weeks ago, Dubai had issued to international investers, bonds worth $1.9trillion,whiched sent the message that its economic position is unshakable! But now that foundation has shaken! inability to rapay loan instalments All these indicate that Dubai's financial foundation is ...... SHAKING! Reasons Dubai, unlike other six emirates of UAE is not a country rich with oil resources.This city state is purely a business city wholly depending upon tourism and other businesses.Dubai World, in a haste to attract world enterprenuers started spending more and more on building fine roads, star hotels,etc. Foreign institutional investers also invested much here, especially during the last four years.But, for some reason, may be due to economic crisis mainly, FIIs didnot turn to Dubai for investment..AS a result, real-estate businessin Dubai suddenly collapsed.This made an impact on other businesses also. Effects Dubai world, has business tie-ups in different countries including India.Thes projects, may be delayed( resulting in cost increase), or dropped, or prolonged. Unemployment problem may arise in Dubai. Enterprises may have to retrench a portion of their employees.!0 lakh Indians are working in Dubai and other UAE countries. Foreign Institutional investers, who have business ties with Dubai World, may face loss.70 financial institutions have lent credits to Dubai world. Banks in Duabi may face crisis. When the world is recovering from last year's economic recession, this may push it back to same position. Ray of hope. Inspite of all these, experts hope