The global stock slump was in response to Wednesday's surprise announcement of an overhaul of Dubai World, the state-run organization that holds almost three-quarters of the Middle Eastern country's total debt. As part of the restructuring, Dubai World's creditors were asked to hold off on requiring debt repayments until at least May 30, 2010.Funny thing is, the word "default" doesn't even appear in that article, but what else do you call it when they tell their creditors they can't pay for six months?
Dubai is actually a truly strange place, if this story is any indication. The United Arab Emirates, which includes Dubai, has the largest per capita carbon footprint of any nation, owing largely to the energy needed for desalination. And those desalination plants are expensive to run. So what if they can't afford to?
If a recession turns into depression, Dr Raouf believes Dubai could run out of water. "At the moment, we have financial reserves that cover bringing so much water to the middle of the desert. But if we had lower revenues – if, say, the world shifts to a source of energy other than oil..." he shakes his head. "We will have a very big problem. Water is the main source of life. It would be a catastrophe. Dubai only has enough water to last us a week. There's almost no storage. We don't know what will happen if our supplies falter. It would be hard to survive."Crazy. I wonder if Raouf is right? You'd think the water supply would be kept going above all else, but...
And what would happen if a resident of Dubai were to default on his or her debts the way Dubai World has? Dubai actually still has debtors' prisons. A bit of an irony...
No comments:
Post a Comment