Global recession taking its toll in the Gulf: Thomas Isaac

Expressing serious concern over the crisis in the Dubai World company, Kerala finance minister TM Thomas Isaac today said it appeared that global economic recession was finally taking its toll in the Gulf region.

"We are yet to know the entire dimension of the crisis. It is very crucial to understand the impact on financial institutions who have lent money to Dubai World," Isaac, who is also an economist, told PTI here.

Isaac said the company had made huge investments in the construction sector and were not getting enough returns. "Any adverse impact of the crisis on major construction companies in the Gulf would seriously affect Kerala as majority of their workers are from here," he said.

On Dubai World's statement that it would ask its creditors for a 'standstill' on paying back its $59 billion debt until at least May 2010, Isaac said it was a 'polite way of saying that they needed a moratorium.'

Cochin Port Trust chairman N Ramachandran said the crisis faced by Dubai World would not affect the progress of the Vallarpadam International Container Transhipment terminal being developed with the help of Dubai Port World, a subsidiary of Dubai World.

"The crisis will not affect Vallarpadam project which will go on as per schedule'', he said when his comment was sought on the development.