The Dubai government and its entities are facing debts of around $80 billion, and authorities have assured investors that the emirate will meet its financial obligations.
November 11, 2009 3:32 by kippreport
Dubai’s stellar growth in the last few years – before the financial crisis hit the region – was the talk of media globally. But the city’s real estate market, one of its main drivers of growth, crashed dramatically after the slowdown, with property prices dropping by around 50 percent. More than $300 billion worth of construction has either been delayed or canceled in the city, and thousands of people in the sector have been laid off.
The crisis hit property and related companies hard; last month government-owned Dubai World announced that it was forced to cut 12,000 jobs as part of a restructuring, which would save it $800 million over next three years.
With investors who were ‘flipping’ property and making a quick buck in Dubai fleeing the scene, the city’s debt situation came into limelight, with serious doubts about whether it will be able to fulfill its obligations.