ID :
93753
Tue, 12/08/2009 - 15:08
Auther :
Shortlink :
https://oananews.org//node/93753
The shortlink copeid
Basic economic strengths seen to spur recovery
Dubai, Dec 8, 2009 (WAM)- Dubai has no substitute as a regional business hub, and the emirate will emerge stronger from the financial crisis because its economic fundamentals remain solid, senior economists and business leaders said on Monday according to a report in "Khaleej Times."
While Dubai has room to improve in terms of its transparency and the way it communicates its messages, the emirate will not default on its debts and will continue to be more attractive as a commercial and financial centre than its rivals in the Middle East, these specialists said.
“Dubai is not in default and is in the process of restructuring. Let’s keep that in perspective,” Dr Henry Azzam, chief executive of Deutsche Bank in the Middle East, told a business conference.
Government-owned Dubai World is asking creditors to help it restructure US$26 billion in debt, much of it owed by the group’s property unit Nakheel.
“The (Dubai) government never said that Nakheel had a government guarantee, and it never said it didn’t. Many companies will make that clear. Nakheel did not,” Dr Azzam said.
“But it does not replace the responsibility of the investor or the creditor to read the documents. It was well specified that [Nakheel] had the guarantee of Dubai World, but that’s not the same as the guarantee of the Dubai government.”
He said that shareholders of companies in Dubai that are undergoing restructuring should share in the pain, or else the problems of today would simply recur, he warned.
Dubai World’s surprise request to restructure its debts is likely to lead to a consolidation of banks and companies in the region, said Dr Azzam, who previously has served as chairman of the Dubai International Financial Exchange and Chairman of the Board at Nasdaq Dubai Limited.
Dubai will come out of the current crisis in strong form if the debt situation is handled in a transparent way, he said. “There is no replacement of Dubai as a regional financial hub.”
Dr Azzam argued that other GCC governments too face a dilemma. “Should they bail out companies and affect themselves, or should they let shareholders share the pain? We have seen the government of Dubai opting for a market-oriented solution. A bailout anyway might encourage investors not to be cautious in (the) future,” he said. Dr Azzam spoke at a conference, organised by Arabian Business called “Is the Crash Over?”
Sheikh Maktoum Hasher Maktoum Al Maktoum, chief executive of Al Fajer Properties, said Dubai was “an A-list player” on the global economic stage. “As long as we matter, we are significant,” he said.
Sheikh Maktoum said that a recovery was likely to start by the end of 2012 but that Dubai needs to change the way it communicates with the outside world. “Dubai will not communicate things the way they did [in the past],” he said.
Dubai Pearl Chairman Abdul Majeed Ismail Al Fahim told the conference that Dubai offers many attractive economic and business incentives, including a diversified economy.
“Dubai will emerge stronger from the crisis. Dubai still has solid fundamentals... Dubai will never default. Dubai corporations will never default. But delays will happen,” Al Fahim said.
He added that he believes Dubai’s property market will not suffer further as a result of Dubai World’s debt restructuring.
Joseph Ghossoub, president and chief executive of advertising and media group Menacom, acknowledged that his industry was in “uncertain times.”
But he argued that that keeping a positive outlook was essential to any recovery. “A crisis is a terrible thing to waste,” Ghossoub said. “It is an opportunity to redefine our rules and services, and it gives small companies the chance to grow, as well as larger companies the chance to become the biggest players.”
While Dubai has room to improve in terms of its transparency and the way it communicates its messages, the emirate will not default on its debts and will continue to be more attractive as a commercial and financial centre than its rivals in the Middle East, these specialists said.
“Dubai is not in default and is in the process of restructuring. Let’s keep that in perspective,” Dr Henry Azzam, chief executive of Deutsche Bank in the Middle East, told a business conference.
Government-owned Dubai World is asking creditors to help it restructure US$26 billion in debt, much of it owed by the group’s property unit Nakheel.
“The (Dubai) government never said that Nakheel had a government guarantee, and it never said it didn’t. Many companies will make that clear. Nakheel did not,” Dr Azzam said.
“But it does not replace the responsibility of the investor or the creditor to read the documents. It was well specified that [Nakheel] had the guarantee of Dubai World, but that’s not the same as the guarantee of the Dubai government.”
He said that shareholders of companies in Dubai that are undergoing restructuring should share in the pain, or else the problems of today would simply recur, he warned.
Dubai World’s surprise request to restructure its debts is likely to lead to a consolidation of banks and companies in the region, said Dr Azzam, who previously has served as chairman of the Dubai International Financial Exchange and Chairman of the Board at Nasdaq Dubai Limited.
Dubai will come out of the current crisis in strong form if the debt situation is handled in a transparent way, he said. “There is no replacement of Dubai as a regional financial hub.”
Dr Azzam argued that other GCC governments too face a dilemma. “Should they bail out companies and affect themselves, or should they let shareholders share the pain? We have seen the government of Dubai opting for a market-oriented solution. A bailout anyway might encourage investors not to be cautious in (the) future,” he said. Dr Azzam spoke at a conference, organised by Arabian Business called “Is the Crash Over?”
Sheikh Maktoum Hasher Maktoum Al Maktoum, chief executive of Al Fajer Properties, said Dubai was “an A-list player” on the global economic stage. “As long as we matter, we are significant,” he said.
Sheikh Maktoum said that a recovery was likely to start by the end of 2012 but that Dubai needs to change the way it communicates with the outside world. “Dubai will not communicate things the way they did [in the past],” he said.
Dubai Pearl Chairman Abdul Majeed Ismail Al Fahim told the conference that Dubai offers many attractive economic and business incentives, including a diversified economy.
“Dubai will emerge stronger from the crisis. Dubai still has solid fundamentals... Dubai will never default. Dubai corporations will never default. But delays will happen,” Al Fahim said.
He added that he believes Dubai’s property market will not suffer further as a result of Dubai World’s debt restructuring.
Joseph Ghossoub, president and chief executive of advertising and media group Menacom, acknowledged that his industry was in “uncertain times.”
But he argued that that keeping a positive outlook was essential to any recovery. “A crisis is a terrible thing to waste,” Ghossoub said. “It is an opportunity to redefine our rules and services, and it gives small companies the chance to grow, as well as larger companies the chance to become the biggest players.”
