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Dubai economy teeters as world watches

Dubai economy teeters as world watches article image
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."

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