NEW YORK (YBH.ME) – In a surprise move, the government of Abu Dhabi is set to bail out fellow emirate Dubai, to the tune of $10 billion. $4.1 billion is to be used immediately to rescue state-owned Dubai World.
World's largest building under construction in cash strapped Dubai.
In a statement released today, the chairman of the Dubai Supreme Fiscal Committee said “the government of Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World.”
World markets are set to surge, at least in the short term, as the threat of a breakdown in Dubai would have led already stressed capital markets to tighten lending practices even further. U.S. Stock Futures are up 77 points as of this printing.
Oil-rich Dubai has been the victim of the one-two punch of zealous over-spending and a worldwide economic downturn that has crippled many western nations.
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John Romano is the publisher and editor of Yes, But However!, a musician, a former political correspondent for BBC Radio London, and a serial web entrepreneur. Follow him on twitter: twitter.com/yesbuthowever or John Romano on Google+John Romano article archive.
