1. Crisis is result of dwindling confidence of financial markets over Bush administration
2. Pakistanis can loose investments in Dubai, Malaysia’s realty sector
3. Investment in local set ups of US institutions is insecure
4. Shares of UEA construction giants drop by 30 pc
Islamabad: Pakistan Economy Watch has said that the US financial crisis is spreading across the world and Pakistanis who have invested billions of dollars in real estate business in Middle East, Gulf and Malaysia may be relieved of their hard earned money.
The shares of world’s top builders in UAE have slipped by almost 30 percent as the markets there are closely connected to international markets. This is unlike Pakistan where there is negligible impact of jitters, said Dr. Murtaza Mughal, President, Pakistan Economy Watch on Friday.
The present crisis is result of gradually reducing confidence of financial markets in the US, EU, Canada, Russia etc over the misdirected policies of Bush administration. The biggest crisis after great depression of 1929 has shaken foundations of America. Pumping a few hundred billion dollars in money markets will not resolve the problem.
The policies of US are hurting it; Washington can help the world by altering its aggressive policies as people had enough of miseries. Now they need peace, food and security.
In this scenario, Dr. Murtaza Mughal said, questions are being raised about the real estate sector of Dubai. He said a small shock will result in disappearing of guarantors leaving unsuspecting Pakistani investors high and dry who have shifted everything from Pakistan to Dubai putting their own country at risk of default. “Standard Chartered, S&P, Morgan Stanley, Moody’s, HSBC etc are now openly questioning viability of realty business which is 25 per cent of the Dubai’s GDP,” he said.
The sector is marred with scandals, corruption and less visibility. Government agencies keep critical data to their chests keeping others in dark. The mafia of local bankers, money changers and builders are still pushing people to buy properties in these regions which could be a great risk. Presently wait and see policy will be the best, said Dr. Murtaza Mughal. -Pakistan Economy Watch