Declaring that Dubai had risen to the challenge of managing the new economic realities, Alabbar clarified that Dubai’s borrowing was not used to cover state expenditures or fuel consumption, but was to fund long-term, risk-free infrastructure development.

He said the total value of the assets of the government and affiliate companies in Dubai was well over Dh1.3 trillion ($350 billion) while their aggregate debt obligations stood at Dh288 billion ($80 billion).

“Currently, the Dubai Government’s sovereign debt obligations stand at Dh37 billion ($10 billion). While our key sovereign assets are currently being evaluated, I can give you a rough estimation of their value, being over Dh330 billion ($90 billion). And this does not include our airports, bridges and the Metro. At the same time the total debt obligations of affiliate companies stand at  Dh256 billion ($70 billion), compared with assets valued at Dh950 billion ($260 billion).”

“Our debt serves Government institutions, state-owned entities and corporates that have positive cash flows and that have extremely strong long-term value,” Alabbar said in his keynote address at the opening of the Dubai International Financial Centre (DIFC) Forum. “The Dubai Government can and will meet all its refinancing obligations going forward. We have risen to great challenges before, and we will rise to them again.”  On the measures taken to address the liquidity challenges in the market, Alabbar said the timely and appropriate intervention that has already taken place at the Federal level to ensure the stability of the country’s financial system, served as a reminder that the UAE stand by its guarantees, as one country. “Going forward, the Central Bank will continue to act appropriately and in the best interests of our nation, whenever necessary.”

He said at a time when the world was facing unprecedented challenges to the stability of the global financial system, The Advisory Council is acting as both a supervisory body and also an agent of active change, monitoring movement in its areas of focus and recommending the timely and appropriate initiation of policies to safeguard their continued stability.

“The formation of The Advisory Council is itself a bold initiative of the Government of Dubai, which signals to the regional and international community Dubai’s firm intention to address vigorously the challenges that confront us and the world,” he said. The council, formed at the direction of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, will help ensure the long-term stability and growth of the key sectors of our economy, he said.

“These are serious times that require frank talk and real action. The current challenges to the stability of the global financial system are without precedent. The necessity of taking action to address those challenges has never been more important.

  issacjohn@khaleejtimes.com