In terms of history, it was founded on March 2, 2006 by Vice President and Prime Minster of the United Arab Emirates and ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum. During that year it possessed over 50,000 workers in over hundred cities around the world. It now has significant investments in real estate companies in United Kingdom, South Africa and United States. Dubai World has a huge list of managed companies around the world. Some of these include Economic Zones World, Island Global Yachting, Dubai Maritime City, Infinity World Development (part owner of CityCenter), Inchcape Shipping Services, P&0 Maritime and Dubai Ports World (3rd largest port operator in the world).

After the global economic recession, the real estate market of Dubai declined after booming for nearly six years. The Dubai government and Central Bank started with a bail out system for the affected locally owned and foreign banks. Worldwide it laid off about 10,500 employees as it sought to restructure its debt with the help of Deloitte & Touché. This crisis eventually affected other markets around the world. The European stocks fell for over 3% on the 26th November, 2009. The next day, Asian stock  market indexes also experienced major drops. European stocks however bounced back on the basis that the debt was recoverable enough to prevent another world financial crisis. Share prices on the markets in Dubai and Abu Dhabi are dropping like never before.

In November of 2009, Dubai World announced that they may delay their payment of about $26 billion debt owed its creditors. The magnitude of the debt caused a lot of shocks in the financial world driving down market indices and even the prices of oil.

This should go a long way to answer the question what is Dubai World?

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Also another party taking a keen interest in the latest financial woes of Dubai is British Airways. It is reported that British Airways have cut down flights to Dubai. Also there could be an inflation of oil prices because of the economic crisis. The Central Bank of UAE has in recent times offered bail outs to the local and foreign banks in the country. However, there have been shock waves in the world markets as even the Dubai World conglomerate is pleading with its creditors to give it a six-month expansion in paying its $60m debts. Dubai World which is the governments investment flagship and popularly known for its slogan – ‘the sun never sets on Dubai world’ has been engulfed in a serious debt crisis.

Fears have been raised from countries like the USA and China about the fact that the economic meltdown in the Gulf can distract the recovery from the world’s financial crisis which could eventually spill over into the financial sector. The Dubai World Financial situation is also sending shivers the spines of banks in the UK. A lot of the commercial banks are vulnerable to the UAE’s financial crisis.

Because of this situation some financial analysts have raised doubts about a recovery as there seems to be a lack of details on the crisis situation. Some have gone as far as saying that this is financial meltdown part 2. It has lead to the down rating of a lot of state-owned related institutions.

Dubai which is just one of the small emirates has in recent years transformed its economy characterized by very tall buildings with the huge presence of foreign workers. Experts have therefore purported that it is a disintegration of asset bubbles.

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