Even as India's Finance Minister tries to play down concerns over Indians losing their jobs in Dubai -- it's not stopping people in Kerala from pressing the panic button. With lakhs of people from Kerala working in Dubai, many have already begun to feel the pinch from a city-state that was once their gold mine.
Speculation is rife amongst European lenders and bankers that Dubai could be bailed out but the question areises, by whome?
Dubai World is the company that led Dubai's spectacular growth and had asked for at least a six-month delay on paying back its debt. Analysts say that Abu Dhabi will probably force the Maktoums to abandon their debt-laden economic model that depends on heavy real estate investment and inflows of foreign money and labour. This could be job losses for thousands of Indian expatriates in Dubai. Job losses entail a reduction of foreign earnings, especially for states like Kerala from which a large number of Indians have gone to the emirates for work, or are employed in Dubai-based companies at home.
The Indian government however, has been trying to allay fears saying India as a large economy will not be affected deeply. Finance Minister Pranab Mukherjee said that there was no need to panic over the financial crisis in Dubai as “India's exposure to Dubai's financial systems is limited.”
Earlier, World markets were spooked by fears of fresh financial trouble after Dubai asked for more time to repay its $ 80 bn dollar debt.
This had raised fears that the state could default on some of its loans which could cause a major crisis of confidence in the region at the time when the global economic recovery remains fragile. It may raise the prospect of further losses at banks that have loaned to Dubai World.
Meanwhile Indian markets took a sharp cut in opening trades today in reaction to Dubai’s debt crisis. Banking and realty stocks were the worst hit. Asian markets also took a tumble as fears grow about the potential repercussions of a default by Dubai.
However speaking to reporters Commerce Minister Anand Sharma declared that the Dubai crisis would not affect India. “India is a large economy. I do not think that some developments in the real estate in Dubai is going to impact the Indian economy. As far as India is concerned, the housing and real estate sectors and construction industry is doing well. This is confirmed by the increasing demand for construction materials, cement and steel,” said Sharma. On being asked how the Dubai debacle would affect the income of Indians employed in the Middle East, Sharma said his ministry was not mandated to look at remittances.
Commenting on the Dubai debt crisis, several analysts stated that it looked too early to say whether this indicates another hitch in global recovery, and said a wait and watch approach is the best move at this point.
Extracted from Indians in Kuwait
Speculation is rife amongst European lenders and bankers that Dubai could be bailed out but the question areises, by whome?
Dubai World is the company that led Dubai's spectacular growth and had asked for at least a six-month delay on paying back its debt. Analysts say that Abu Dhabi will probably force the Maktoums to abandon their debt-laden economic model that depends on heavy real estate investment and inflows of foreign money and labour. This could be job losses for thousands of Indian expatriates in Dubai. Job losses entail a reduction of foreign earnings, especially for states like Kerala from which a large number of Indians have gone to the emirates for work, or are employed in Dubai-based companies at home.
The Indian government however, has been trying to allay fears saying India as a large economy will not be affected deeply. Finance Minister Pranab Mukherjee said that there was no need to panic over the financial crisis in Dubai as “India's exposure to Dubai's financial systems is limited.”
Earlier, World markets were spooked by fears of fresh financial trouble after Dubai asked for more time to repay its $ 80 bn dollar debt.
This had raised fears that the state could default on some of its loans which could cause a major crisis of confidence in the region at the time when the global economic recovery remains fragile. It may raise the prospect of further losses at banks that have loaned to Dubai World.
Meanwhile Indian markets took a sharp cut in opening trades today in reaction to Dubai’s debt crisis. Banking and realty stocks were the worst hit. Asian markets also took a tumble as fears grow about the potential repercussions of a default by Dubai.
However speaking to reporters Commerce Minister Anand Sharma declared that the Dubai crisis would not affect India. “India is a large economy. I do not think that some developments in the real estate in Dubai is going to impact the Indian economy. As far as India is concerned, the housing and real estate sectors and construction industry is doing well. This is confirmed by the increasing demand for construction materials, cement and steel,” said Sharma. On being asked how the Dubai debacle would affect the income of Indians employed in the Middle East, Sharma said his ministry was not mandated to look at remittances.
Commenting on the Dubai debt crisis, several analysts stated that it looked too early to say whether this indicates another hitch in global recovery, and said a wait and watch approach is the best move at this point.
Extracted from Indians in Kuwait
