Dubai Financial Crisis: Hits World Markets and Indian Workers (Photos)

Economists fear that the latest Dubai financial crisis could have a major impact around the world.  The inability of the government of Dubai to refinance massive debts taken on by it's largest owned company, Dubai World, has sent shockwaves throughout the world prompting many throughout the world to ask not only how severe the crisis is, but what exactly is Dubai and who is in control of it.

Although frequently described as a city state or even a country in its own right, Dubai is a constituent member of the federation of United Arab Emirates along with six other emirates.

We think of all of these regions as being wealthy from their dominance in oil, but only one of the emirates, Abu Dhabi, possesses substantial oil reserves, and as such, it has dominated the areas of federal politics, including foreign affairs and defense, since the UAE was formed following Britain's withdrawal from the Persion Gulf in 1971.  With little oil, Dubai worked to create it's own identify from Abu Dhabi by diversifying at a fast pace, building up various non-oil sectors such as luxury tourism and real estate.

It came as a shock to many, when Dubai government disclosed  that it would not be able to service the 80 billion debt it has raised through Dubai World and property unit Nakheel. Dubai government said that it wanted the creditors to agree to a debt standstill as it restructures Dubai World and works around the finances to pay back.