Dubai Debt problem started late 2009 in December, when the government asked the creditors to postpone the payment of the bailout till May 2010 which was a slap on the face for the worldwide economy and has caused a temporary collapse in the stock market all over the world.
The Dubai debt of 80 billion dollars that was supposed to be paid on December 2009 are mainly owned by Dubai world which alone has liabilities of 60 billion US dollars ,the main problem is one of Dubai World subsidiary Nakheel which is working and investing in the properties field and has also huge Islamic bonds that were supposed to be paid in December with a value of 3.5 billion dollars.
Many people think and ask why doesn’t Dubai pay from their own oil exporting income it may be shocking but Dubai doesn’t have oil at all, the Emirate that has Oil and export it in the United Arab of Emirates is the capital Abu Dhabi.
Abu Dhabi has tried to help Dubai and interfered many times via the federal central bank, bought one $10bn bond issued by the Dubai government earlier this year, and, via its own banks, bought another $5bn bond this week. But the latter came with a rider that it was not to be used for the Dubai World bail-out. This raises two questions: what are the other debts for which it is to be used? And how is the Dubai World debt to be met, even after the six-month delay, if Abu Dhabi will not fund the rescue package?
Abu Dhabi On December 14, 2009 gave $10 billion in surprise aid to Dubai for debt-laden Dubai World, which said it would use $4.1 billion of it to repay its Nakheel unit’s Islamic bond maturing on the same day.
The Debt in Dubai and the recent economic situations has caused many expats to leave the country and head back home or somewhere else and start from scratch! While this will also create new opportunities for newcomers whenever the trend will go back up once again!