Swamped in debt, Dubai asks for six-month 'standstill' on paying bills

Swamped in debt, Dubai a

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November 26, 2009 21:05

 
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Just a year after the global downturn derailed Dubai's explosive growth, the city is now so swamped in debt that it's asking for a six-month reprieve on paying its bills - causing a drop on world markets Thursday and raising questions about Dubai's reputation as a magnet for international investment. The fallout came swiftly after a Wednesday statement that Dubai's main development engine, Dubai World, would ask creditors for a "standstill" on paying back its $60 billion debt until at least May. In total, the state-backed networks nicknamed Dubai Inc. are $80 billion in the red and the emirate needed a bailout earlier this year from its oil-rich neighbor Abu Dhabi, the capital of the United Arab Emirates. Markets took the news badly - with the Dubai woes and the continued fall of the US dollar giving investors twin worries.

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