A top finance official in Dubai says the emirate's government will not
guarantee the debts of the heavily-indebted, state-owned conglomerate
Stock markets in Dubai and other parts of the United Arab Emirates
plunged Monday, with investors concerned about Dubai's ability to pay
back $59 billion in debt.
The Dubai market dropped 7.3 percent while Abu Dhabi's index tumbled 8.3 percent.
The director general of Dubai's Finance Department, Abdulrahman
al-Saleh, says lenders bear some responsibility for the current crisis.
He says they lent money based on their assessment of the firm's projects, not because of government guarantees.
The official says while Dubai owns Dubai World, it has been known since
the conglomerate was established that it was independent and not
guaranteed by the government.
The debts grew out of Dubai's property boom, which included unique
projects like palm-tree shaped islands and work on the world's tallest
building. The once rapidly growing city-state has been hit hard by the
global financial crisis.
The UAE stock exchanges opened Monday for the first time since Dubai
World asked last week to delay debt repayments by six months. The
markets had been closed for the four-day Muslim holiday of Eid al-Adha.
On Sunday, the UAE's Central Bank said it would make more loan money
available to its banking sector in an effort to ease the crisis.
World stock markets dropped last week as investors worried the Dubai
credit crisis could affect emerging economies and major banks with
loans to the Gulf state.