General
Logo
 

We Can Do It

Editor
Filed on December 16, 2009

GLOBAL crisis or not, Dubai has done it again. It has once again shown the world, beyond doubt, its ability and willingness not only to meet its obligations but any challenge to its unrivalled status as the most dynamic global financial and trading hub in the Gulf region.

The Government of Dubai on Monday stepped in to make a full repayment of the Nakheel 2009 sukuk, $4.1 billion in all, and assured that it will also address the concerns of Dubai World’s trade creditors and contractors.

Monday’s events also remove any doubts about Abu Dhabi’s commitment to Dubai’s success and prosperity, and will hopefully put an end to groundless speculation about the Federation’s unity. The unrelenting support from the Government of Abu Dhabi and the UAE Central Bank will go a long way to show that they are fully committed to Dubai’s economic ambitions and to the nation’s financial stability.

Sceptics were taken by surprise as they saw investors worldwide greeting the development with an aggressive rally in stocks and risk appetite. Local stock markets hit their upper limits and trading was brought to a virtual standstill as investors were unwilling to let go of UAE assets. What more evidence is needed to satisfy the concerns of those who doubt the long-term viability of Dubai’s economy?

Countries across the world have had their fair share of financial stress as a direct consequence of the global credit crisis and the downturn that followed. And all of them are dealing with it in their own way and within the resources available. Some of the crisis management strategies being employed will be conventional and others will be exceptional and, as such, may not favour all stakeholders. But most stakeholders realise that making profit out of a crisis of this scale would be imprudent, as it could put to risk long-term potential of companies and economies.

Dubai and some of its companies have their own economic and financial challenges, which include paying off a rather large debts and contractual obligations. What Dubai should and is trying to make sure is that the devices and strategies it adopts do not compromise the long-term viability of its economy and its corporate sector. Most of Dubai’s creditors and investors understand this and appear to be responsive to any debt or corporate restructuring proposed by the government or local commercial entities.

The global reaction to Dubai’s debt management efforts confirms that a lot is at stake. Credibility of all stakeholders and market makers and sustainability of the global economic recovery is at endangered if a major risk event unfolds. The synthesis of the global discussion after Dubai World’s November 25 standstill request is that it is in the interest of all parties involved to ensure that Dubai succeeds with its debt management plan and continues to prosper as a strategic trading and financing hub for the Gulf region and build on its strength in areas like re-export, logistics, shipbuilding and tourism.





ERROR: Macro /ads/dfp-ad-article-new is missing!
MORE FROM News
MORE FROM Khaleej Times
CurrentRequestUnmodified: /nation/general/uae-based-woman-places-arab-pride-on-top-of-world macro_action: article, macro_profile: , macro_adspot:

 
 
 
 
KT App Download
khaleejtimes app

All new KT app
is available
for download:

khaleejtimes - android khaleejtimes - ios khaleejtimes - HUAWEI AppGallery