UAE has a Backup Plan to Weather Financial Crisis, Says Top Official

“Even if the global credit situation worsens and the meltdown continues indefinitely, our government has its own source of finance to fall back on,” Al Hamili said on the sidelines of a conference on value added tax this week.

Hamili told Khaleej Times that the economic council would, next week, present to the Dubai government a comprehensive action plan to address the short-term and long-term economic challenges against the backdrop of the global economic contraction.

Dubai Economic Council advises the Government of Dubai on forward-looking economic strategies, advocates sound policies that promote business environment, productivity and investment climate, and enhances Dubai’s competitiveness in the world economy.

He said the UAE government and monetary authorities had already acted proactively to address the liquidity crunch with a Dh120-billion programme to shore up the country’s financial system.

He said the UAE authorities were ready to make available more funds, if necessary, to ensure that the cash crunch would not hamper development projects and derail the economic growth momentum. “All recent measures taken by the government, including a growth-oriented budget with a 21 per cent increase in allocation, are positive enough to assure residents and investors that everything is normal and the liquidity situation is well under control,” Hamili stressed.

The country’s Dh42.2-billion budget for 2009 was approved by the Federal Cabinet on October 21.

“The current credit squeeze and the bleak global recessionary trend came as no big surprise. We had anticipated a scenario such as this and put in place a plan to ensure that our ongoing projects would remain unaffected,” he pointed out. “The UAE is not only a regional business hub, but also a global destination for Foreign Direct Investments. It has enhanced its position as one of the leading competitive economies in the world after it moved up six positions to 31^st place in the Global Competitiveness Report 2008-09. The report reflects the strength of the UAE economy and its ability to compete internationally. Our government’s goal is to position the country among the top 10 advanced economies of the world,” he said.

The UAE is also ranked 16^th out of 52 countries in the World Economic Forum’s inaugural Financial Development Index. The country topped the Middle East region in the list which was headed by the US, followed by the UK, Germany, Japan, Canada and France.

issacjohn@khaleejtimes.com