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Don't mix up between government and companies debts, urges Dahi Khalfan - updates

Nov 30, 2009 - 10:23 -

Dubai, 30 Nov. 2009 (WAM) - Lt. General Dahi Khalfan Tamim, Dubai Police Commander General '&' Head of the Dubai Government's Budget Committee has urged media not to confuse between the debts of local public companies and debts of the Dubai government, saying the latter's debts are almost non existent.

"There are tens of Dubai-based national firms which are making huge successes worldwide," he said.

Dahi Khalfan noted that in the whole region, real estate continue to be the top earning sector and that reality investors were still safe from the global slow down.

"Only speculative real estate investors have been affected by the slow down in the sector," he added.

"Banking sector is considered the backbone of any economy. The UAE local banks possess enough assets, adequacy, liquidity and reserves to continue fuelling the development process." Dahi Khalfan said the new draft government budget for 2010 did not conflict with either the existing or planned infrastructure projects, necessary for sustainable development.

"The department heads showed remarkable efficiency in setting financial and administrative strategies that will ensure Dubai's continuous excellence," he said.

Dahi Khalfan pointed out that Dubai has more than a single landmark to be proud of.

"Usually, each of the world's countries has an icon to be proud of. Dubai has many, such as Burj Dubai, Burj Al Arab, Dubai Mall, as well as Dubai International Airport and the Emirates Airlines which are seen as major drivers for tourism." Dahi Khalfan, who also heads Dubai's Crisis management Team, stated that Dubai government had no debts issue.

"Dubai has rather an issue of unfair competition by some circles which seek to undermine the successful emirates and to unseat it as a global centre for finance and business and a magnet for foreign investments that thrived and succeeded in Dubai." "I noticed that Gulf and foreign media, as well as a large segment of general public, confuse between debts of Dubai government, which are almost non-existent, and the debts of local companies. This confusion should be corrected and the public should be made aware that to separate between the two types of debts." As for the real estate sector, Dahi Khalfan said it should be referred to as a "recovering sector" for the investors who are in the market for medium and long term gains.

"Those investors are not affected and their properties remain of a considerable value. They are still making profits from the rents which are very high, compared to other GCC countries." He called for differentiating between property investors and property speculators, adding that the latter were severely affected.

"One has to be certain that the speculation market has its ups and downs. Therefore, speculators must know the risks involved," he concluded.

Later, Dahi Khalfan told an Abu Dhabi TV programme that the whole matter of a company deciding to re-schedule debt payment was blown out of proportion.

"Six years ago, Vice President and Prime Minister of UAE and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum told CEOs of large companies that if they wanted to borrow, they should do that in their names, not Dubai government's name." Meanwhile, Governor of the UAE Central Bank H.E. Sultan bin Nasser Al Suwaidi affirmed support to the local banks.

He revealed that facilities were put in place to enable borrowing from the Central Bank and purchase of US dollar currency in exchange.

"UAE banks are in better position than a year ago given the amount of liquidity and the rise in capitals. The UAE banks have not relied on international banks for borrowing," Al Suwaidi said.

He admitted that deposits dropped by five percent in comparison with assets.

"I cannot see any reason for panic. The UAE banks have increased their respective capitals. Besides, most of the country's banks are based on serving individuals. Commercial banks have proved their ability in addressing fallouts of the global financial crisis." Al Suwaidi urged local investors to ensure feasibility of investment opportunities before taking any step.

"I also advise the foreign investors to carefully study the opportunities and to conduct feasibility studies to make sure that such opportunities are real, not an adventure," he added.

WAM/MAB