DUBAI'S DEBT CRISIS SHOULD BE A LESSON

KUALA LUMPUR, Dec 2 (Bernama) -- Chairman of the World Islamic Economic
Forum (WIEF) Foundation, Musa Hitam said Dubai's debt crisis should be a
lesson for investors to be more careful and not adopt a herd mentality.

The crisis took place because the people involved got too excited to the
point of forgetting the principle of supply and demand, the former deputy prime
minister said.

"I foresaw something like this happening two or three years ago. The bubble
has grown too fast it has to burst...they forgot the principle of supply and
demand. When (there is) oversupply, somehow or rather it would reach breaking
point," he said when asked on the ongoing debt crisis of Dubai.

Speaking to reporters after the launch of two books here today by former
director general of education, Dr Abdul Rahman Arshad, Musa however said he was
not sure if any local company would be seriously affected by the crisis.

Dubai World, a government owned development conglomerate recently sought a
six month reprieve from paying creditors nearly US$60 billion in debts.

This triggered concerns of possible failure of the company which is involved
in projects worldwide, sending shock waves to an already weakened global
financial sector.

"But the fact that the Dubai World, the umbrella institution is the one that
has to take and handle the crisis, surely will have the spillover effects and
all those who had invested in Dubai would feel Dubai's ripples. It is already
starting to be felt," Musa said.

Musa also said that the Abu Dhabi government should somehow rescue Dubai
World.

"But so far they have not take any action...I suspect they are trying to let
things go down first and when things are down, they might be able to salvage it
in a cheaper way," he said.
--BERNAMA