Dubai economy teeters as world watches
Dubai, until recently one of the most prosperous nations of the United Arab Emirates, has fallen into economic trouble. The state-owned company Dubai World has requested an extension to its debt repayment of US$59 billion, an amount representing almost three quarters of the debt of the entire emirate.
The Dubai Government last week sought a delay to the debt repayments in hope of restructuring Dubai World: “Dubai World intends to ask all providers of financing to Dubai World and Nakheel to ‘standstill’ and extend maturities until at least 30 May 2010.”
The implications are far-reaching, with Dubai World operating in Australia through DP World, which controls a significant portion of Australia’s ports sector, and with large Australian operations such as Leighton Holdings established there.
According to Reuters, a government spokesperson from neighbouring emirate Abu Dhabi suggested they would assist Dubai “on a case-by-case basis”. He added: “It does not mean that Abu Dhabi will underwrite all of their debts.”