Dubai, Nov 30 (THAINDIAN NEWS) Dubai, one of seven states that make up the United Arab Emirates (UAE), is in a deep financial crisis. There is a huge $59-billion debt in the financial sector of Dubai World, which is one of the largest global conglomerates, is a major cause for worry, as the region accounts for around 50% of the country’s $25-billion remittances.

Dubai World’s debt mess has now become public, and post this news, Dubai’s main stock exchange dropped more than 7 percent while the Abu Dhabi exchange fell more than 8 percent, which is the steepest fall in at least a year, according to brokers.

“Dubai World was established as an independent company, it is true that the government is the owner, but given that the company has various activities and is exposed to various types of risks, the decision, since its establishment, has been that the company is not guaranteed by the (Dubai) government,” Abdulrahman al-Saleh, director general of Dubai’s Finance Department, said on Dubai TV.

There has been a drop in property sale too, so half of all the UAE’s construction projects, which are worth about $582bn (£400bn), have either been put on hold or totally canceled, thus there is a huge trail of semi finished towers on the outskirts of the city stretching into the sandy desert.

“Now, there will be at least 25-percent contraction in the job market. There may be a ripple effect on most Middle East countries because of Dubai World bust,” E. Balaji, director of a leading headhunting firm, Ma Foi Management Consultants.