03-17-2009, 07:20 AM
Dear CFANerd and sumairalam
So what I am saying here is, economies of gulf countries (including Dubai and UAE) would have double negative impacts. One, due to recession. Two, due to likely future outflow of large masses of population, if it actually happens, which is an assumption at this stage but would be an eventual result if recession and resulting layoffs continue and governments do not attempt to stop exit. Recession has minimized foreign investment, increased business closures, and unemployment. In result, people would start leaving the country, in absence of direct government spending for them, thus further causing lowering of aggregate demand of goods and services.
Irony is, either governments are reluctant for direct investment on people who worked for them for decades, or waiting for foreign help that would come after recovery, which is uncertain at this time.
We may say that it is a two way causation, and both the factors are supporting each other in negative direction, causing probably free fall of the economies.
Dear sumairalam; Though I don't know the detailed specific measures those governments are taking, but some of the steps taken by the government (which you mentioned in one of your previous posts) are more of facilitating (a kind of band-aid) in nature, rather than stimulatory to spur the activity again.
Regards
So what I am saying here is, economies of gulf countries (including Dubai and UAE) would have double negative impacts. One, due to recession. Two, due to likely future outflow of large masses of population, if it actually happens, which is an assumption at this stage but would be an eventual result if recession and resulting layoffs continue and governments do not attempt to stop exit. Recession has minimized foreign investment, increased business closures, and unemployment. In result, people would start leaving the country, in absence of direct government spending for them, thus further causing lowering of aggregate demand of goods and services.
Irony is, either governments are reluctant for direct investment on people who worked for them for decades, or waiting for foreign help that would come after recovery, which is uncertain at this time.
We may say that it is a two way causation, and both the factors are supporting each other in negative direction, causing probably free fall of the economies.
Dear sumairalam; Though I don't know the detailed specific measures those governments are taking, but some of the steps taken by the government (which you mentioned in one of your previous posts) are more of facilitating (a kind of band-aid) in nature, rather than stimulatory to spur the activity again.
Regards
