Dubai to pay debts and continue development: ruler
DUBAI: Dubai will pay its massive debts and will go ahead with its ambitious development projects, the emirate’s ruler Sheikh Mohammed bin Rashid al-Maktoum told an economic conference on Monday.
The economic crisis ‘will not deter Dubai’s ambitions of implementing its development plans and will not divert it from its leading position and will not (keep) it from playing its role in the arena of the international economy,’Sheikh Mohammed said.
Unlike the United Arab Emirates’ capital Abu Dhabi, Dubai has no significant oil resources, and has been hard-hit by the economic crisis, with property prices plunging by 50 per cent from their peak.
A study issued by Standard and Poor’s last month estimated that state-related companies in Dubai are due to repay nearly 50 billion dollars in debt — 70 per cent of the Gulf emirate’s estimated GDP — within the next three years.
To meet the obligations of its companies, Dubai is issuing treasury bonds worth 20 billion dollars, half of them subscribed to by the Central Bank of the UAE.
Sheikh Mohammed expressed confidence that the second part of Dubai’s bond programme will be ‘highly received by subscribers’ and said the resulting money ‘would be directed to settle Dubai financial obligations in the coming years.’
Some 400 real estate projects in the UAE, valued at around 300 billion dollars, were reportedly frozen due to the crisis. Local real estate giant Emaar announced losses of 350 million dollars for the second quarter of 2009.
Among the many grandiose projects that were shelved by government-linked companies was a 95-billion-dollar development of a new district within Dubai.
However, the government has pressed on with infrastructure projects, including the construction of the Dubai Metro which opened in September.
Sheikh Mohammed said Dubai’s success is due to more than just real estate, which was not ‘the sole driver of our development.’
He also emphasised the unity of the UAE, of which he is prime minister, saying that ‘Dubai is (an) inseparable part of the UAE federation.’
‘Dubai and Abu Dhabi are one, and what Dubai has is for Abu Dhabi and vice versa,’ Sheikh Mohammed said. ‘(This) is also true for the rest of the seven emirates forming the Federation.’
Sheikh Mohammed said he believes the worst of the global economic crisis is over. He added that ‘as the global economy stabilizes, Dubai today is well-placed to exploit its inherent strength and its key strategic location to start new rounds in its march towards excellence.’ —AFP