It has been interesting to see how the effects of the global economic crisis have played out in the Gulf, a region that many had hoped would be immune from contagion. As time has gone on, the unmistakable effects of declining credit, demand, prices, profits and employment have become evident across the Emirates. It is a cycle that many at first thought would not hit these shores, but now we are seeing that almost all the elements of the recession in the West are playing out here, albeit with a delay.
Like many emerging markets, such as China, the Emirates began this whole process with some big positives on its side.
Its banks had almost no exposure to the toxic assets that were the genesis of the crisis, its Government had a big cushion of foreign reserves and the economy was growing strongly. The Emirates also had a relatively small national population to suffer the effects of recession, since the problem of unemployment can be exported by withdrawing residence permits of foreign workers who lose their jobs.
No comments:
Post a Comment