Global Economy-Recent affairs

United Arab Emirates

Dubai - Economy

• GDP : : $835 billion in 2009 (compared with $1.1 trillion in 2008).

• Oil 5%, non-oil 95%.

• Main non-oil industries: Trade, Tourism.

• Manufacturing and Transport.

• Diversified economic base.

Infrastructure Based on Tourism

Recession came into picture• Dubai World is Government Company having

central role in Dubai economy during the construction boom.

• They borrowed a sum of US $ 60 billion for investing in real estate development .

• During the recession, investors from USA and other countries whom invested their money at Dubai want it back.

• Economic growth has fallen sharply from nearly 8 percent in 2008 to under one percent.

What Happened then

• More than half of the construction projects in the United Arab Emirates, worth $582 billion, have been put on hold..

• Some projects are still going ahead to the value of $10 billion bailout from the UAE's capital, Abu Dhabi..

• But, many workers are unemployed and stuck here..

Gulf countries

• Other Gulf countries were in a position / condition to help UAE by providing subsidiaries .

• The Saudis, along with other states, have concentrated on infrastructure projects and helping the private sector take a larger role in developing the non-oil and gas sectors.

• Kuwait Funded for Future Generations of $250 billion.

• Even Libya had provided $50 billion in its Oil Reserve Fund.

Effect on Global Market

• Economists fear that the latest Dubai financial crisis could have a major impact around the world.

• So there was a sudden hike in oil price of $42->$70/barrel.

• Directly affects the global market as the price of crude oil plays the vital role in the global economy.

Effect on Indian Economy• A large number of Indian companies have exposure in the region, and

over 4.5 million Indians live and work there..

• Indian tourists -nearly 5 lakh tourist visit every year –alomost 5% impact on Dubai economy.

• Indian workers in Dubai–00.05 % remitance to Indian Economy

• Investment by Indian bankers ,companies are 2% to Dubai economy.

• Indian exposure to Dubai economy –staggering 10 to 12 % interms of investing in properties ,hotel and other business.

Indian Companies

• India export to UAE stood a $23.92 billion in 09 Dubai world crisis effect Realestate, Baking and Constructions business.

• Nagaarjun Construction have 440 flat project.

• L&T invested about $20 cr.

• Voltas of about Rs.400cr.

Present status

The Dubai economy is forecast to remain in recession in 2010, the second year in a row that the emirate has experienced negative growth..

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