Tuesday, December 8, 2009

Dubai's Credit Crisis Likely to Lead to Layoffs for Foreign Workers

"Dubai crisis sparks job fears for migrant workers"
By Magdi Abdelhadi
BBC News, Dubai
 
"The large numbers of migrant workers in Dubai from Asia and the Middle East are likely to bear the brunt of the emirate's severe credit problems. For them Dubai had offered an escape from poverty in their home countries...

And now that one of Dubai's biggest government owned companies, Dubai World, is having trouble paying back its debt, there is renewed fear that more migrant workers could be sent home...

But in Dubai, residency depends on having a job or having a big bank account. If you don't have either, you can be sent home...

While everyone was scratching their heads trying to find out the likely impact if Dubai World defaults on debt repayment due on 14 December, Dubai itself was putting on an extravagant show to mark the United Arab Emirates National Day.

The flags were being flown everywhere. Even women in traditional black dresses had the colours embroidered on their headscarves...

The Dubai government has made it clear that it will not bail out its debt-stricken companies, insisting that although Dubai World is owned by the government, legally it is a separate business entity.

The next few days will see febrile negotiations between creditors and the Dubai government over how to settle this dispute.

One thing is certain though, says one analyst. Whatever the outcome of the negotiations, affected companies in Dubai will have to downsize - a euphemism, in this case, for laying off more foreign workers."

Read the full story: http://news.bbc.co.uk/2/hi/middle_east/8400908.stm

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