The financial crisis has affected everyone in the world, and now it's coming to the Middle East. Dubai World, representing the Emirate's investment industry, is seeking for another 6 months in order to pay its debt of $59 billion. As a result, the stock markets in the US as well as Asia have reported low on Friday, November 27th. Dow Jones was down 1.48%, S&P fell 1.72%, Nasdaq slipped 1.7%, Hang Seng in Hong Kong declined 4.8%, Kospi in South Korea dropped 4.7%, Nikkei in Japan and Taiex in Taiwan both sagged 3.2%.
Things might be worse than it seems. The total amount of Dubai's debts could be as high as $80 billion. It is not reported who are the creditors of these debts. As a result, many banks have given their official statement that their investors are not at risk.
Some incidents also taking part in this Dubai crisis. For example, the closure of the financial markets in the US for Thanksgiving increases the uncertainty of the global market. In addition, the Eid al-Adha, a religious holiday in Dubai, makes the financial market unpredictable. Moreover, a computer crash at the London Stock Exchange causes dealers in Dubai unable to trade for many hours.
People are afraid of a domino effect since Dubai is one of the biggest economical market. The crisis in the US has already weaken the world's economy. Could Dubai, known for its lavish hotels, palm-shaped islands, and indoor skiing, really be the next on the bankruptcy list?
Sources:
http://www.nytimes.com/2009/11/28/business/28markets.html?_r=1&hp
http://business.timesonline.co.uk/tol/business/markets/the_gulf/article6934261.ece
http://news.yahoo.com/s/ap/20091127/ap_on_bi_st_ma_re/us_wall_street
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