The crisis of the Gulf state

Thèmes abordés

Gulf State, Dubaï, real estate

Résumé du document

The financial crisis that originated from the Wall Street in the United States has resulted in the collapse of the economies of countries worldwide. It can therefore be considered as a global financial crisis. Saudi Arabia has the biggest market in the Persian Gulf region where the Emirate States or the United Arab Emirates and other Gulf states are highly visible in world trade and the global economy due to their oil reserves.

The United Arab Emirates is a federation of seven states situated in the southeast of the Arabian Peninsula in southwest Asia on the Arabian Gulf bordering Oman and Saudi Arabia. Those seven states are called the Emirates: Abu Dhabi , Dubai, Sharjah , Ajman, Umm al-Quwain , Ras al-Khaimah and Fujairah. The UAE is one of the largest producers and exporters of oil and they are members of the Organization of Petroleum Exporting Countries

Extraits

[...] Nonetheless the latter is still buoyant. Another way to go through these hard times is through the help of other states composing the Emirates, which lend money to each other at low interest rates in order to fight as one against recession. Moreover Saudi Arabia wasn't forced to borrow money from other states thanks to it's saving. So the Saudi's debt is only of its GDP whereas in France for example, the public debt almost reaches 70% of the GDP. [...]

[...] Nowadays some businessmen are also applying rate” strategies to boost their business. The government must preoccupy themselves in relation to this matter. Actually, one of the most important revenues of those countries comes from depositors and investors, and if companies declare themselves bankrupt nobody would have the desire of investing into one of those countries. To deter the people of The United Arab Emirates, a federation that includes Dubai and 6 others states, has made $33 billion available to banks. [...]

[...] And now policymakers, who are having a hard time, are trying to make some strategies to face the crisis, and to fight against plunging property prices, encouraging trade and tourism, and the unaccustomed difficulty of refinancing its ambitions. One of its first strategies is to reshape the archipelago of quasi- government companies known as “Dubai INC”. Actually, these companies are really affected by the crisis, and need a support to pick up its financial situation. In spite of the fact that the government is doing the best it can, those companies are afraid for one-upmanship, and ask the government for all of its confidence. However, problems are widespread in the whole state. [...]

[...] We can say that the crisis has hit the emirate hard. The real estates sector was at his apogee with the economic boom, but, the market peaked in September 2008. For example, on Dubaï, prices fell by about 25% in the last quarter of 2008, and they may have fallen by the same amount in the first quarter of 2009. The situation on the Gulf States is not the same than before the crisis, like said Saif Ahmed, an entrepreneurship in Dubaï. [...]

[...] The evolution of the economic situation in the Gulf State A. A region not spared by the crisis B. The most affected economic sectors II. Will this region maintain its economic dynamism? A. The Gulf State weathering the crisis B. Paving the way to remain competitive The financial crisis has started in the United States, from Wall Street, and it has hit all countries, all economies. It is therefore a global financial crisis. Saudi Arabia, which have got the biggest market in the region; emirate States or the United Arab Emirates and others Gulf States are very important and very present in world trade and the global economy, due to their oil reserves. [...]