DIFC Forum: Dubai can meet all its debt obligations, says HE Mohammed AlabbarPress Release 24 Nov 2008 06:48 pm
His Excellency Mohammed Alabbar, Chairman, The Advisory Council, Government of Dubai and Chairman, Emaar Properties, put rest to speculation about Dubai’s debt obligations by saying that the Government of Dubai is fully capable of fulfilling them.
He was speaking at the DIFC Forum, the second major business conference that forms part of DIFC Week, the Dubai International Financial Centre’s (DIFC) prestigious annual series of business events.
In his first major public address as the head of the Advisory Council set up to manage the impact of the global financial crisis in Dubai, HE Alabbar said: “There has been a lot of talk about the debt obligations of Dubai. There is confusion and therefore concern about how much Dubai owes, and how this debt will be refinanced. Let us put an end to that speculation.
“Currently, the Dubai government’s sovereign debt obligations stand at $10 billion (AED 37 billion), While our key sovereign assets are currently being evaluated, I can give you a rough estimation of its value being over $ 90 billion (AED 330 billion). And this does not include our airports, bridges and the Metro.”
HE Alabbar also estimated the total debt obligations of affiliated companies at $70 billion (AED 256 billion), compared with assets valued at $260 billion (AED 950 billion). The total value of the assets of the government and affiliate companies in Dubai was put at over AED 1.3 trillion.
“The Government can and will meet all its debt obligations going forward. Let there be no doubt about this fact,” he told an audience of financial business leaders from the region and around the world.
HE Alabbar pointed out that Dubai’s borrowing has been used to finance Dubai’s long-term, risk-free infrastructure development. “Our debt serves Government institutions and state-owned entities that have positive cash flows and that have extremely strong long-term value,” he said.
Speaking about the action that the Dubai Advisory Council is taking to manage the impact of the global financial crisis on Dubai, HE Alabbar said: “The Advisory Council, which is already at work, meets frequently to review the state of key sectors of the economy. Make no mistake: We will act in a timely manner. And we will be transparent in those actions.” he said.
Alabbar also said that the Advisory Council will work with Dubai’s three largest real estate developers to manage the supply of real estate projects. “Today, Dubai’s three largest developers control about 70 per cent of the supply onto the market. The Council, acting in cooperation with them as well as other private developers, is managing the current and future supply of new projects onto the market. Let me assure you that we have our finger on the pulse of the real estate sector.”
He also said that the Dubai Government will step in and help associated and affiliate real estate companies “if and when the need arises.”
On the state of Dubai’s real estate sector, HE Alabbar said: “Today, the real estate sector is witnessing a healthy correction. This is a consequence of global financial conditions – and is inherent to the very nature of the market. As we all know, real estate is cyclical. Monitoring supply and sales, the Advisory Council is managing this important sector of our economy, ensuring that new supply is properly managed and that current and future demand is adequately met.”
Reiterating that Dubai will take every measure to safeguard itself from the impact of the financial crisis, HE Alabbar said: “We are rising to the challenge of managing the new economic realities. But our feet are firmly planted on the ground – and our eyes remain fixed on new horizons, on a future that remains bright. Here in Dubai, we are realists. And we are also optimists. We have risen to great challenges before, and we will rise to them again.”
The DIFC Forum, being held on 24 and 25 November, is discussing critical issues like the impact of the global financial crisis on the region, the next generation of Islamic Finance, emerging markets in and after the financial crisis, and energy geopolitics in an era of structural change. Apart from HE Alabbar’s key note address, one of the highlights of the Forum is a session titled “Get Confidence Back’ moderated by Maria Bartiromo, Anchor, CNBC.
With over 70 speakers from the world’s major international markets, 21 separate sessions, and a televised debate on how to get confidence back in the global financial markets, DIFC Week will address the most important issues faced by businesses in the region both in the current financial climate and in the future. Topics to be discussed at the four-day event include growth strategies, opportunities and major challenges for family businesses both locally and internationally, the economic outlook for the world and the GCC in 2009, attracting foreign investment and human capital in the Arab world, and the practicalities of establishing operations in Dubai.
Closing DIFC Week will be a Conference on 26 November titled: ‘The Inside Track on Dubai’, which will involve a series of commercial, regulatory and teaching streams that discuss the practicalities of establishing operations in Dubai covering issues such as raising capital and understanding cultural aspects of living and working in the Emirate.
DIFC Week is proud to be supported by its Platinum Sponsors including Deutsche Bank and Abraaj Capital, and Sponsors who include Itau Securities and Goldman Sachs . In addition, the DIFC Week Conference is sponsored by Alvarez & Marsal, Conyers, Dill & Pearman, Emirates NBD, Grant Thornton, HAYS, International Compliance Training (ICT) Middle East, Kershaw Leonard, Latham and Watkins, M: Communications, Norton Rose and Union Properties while the DIFC Week Gala Networking Reception is sponsored by SungardThe DIFC Summit is run in association with the Tharawat Family Business Forum.
DIFC Week is also grateful for the active support and involvement of its Knowledge Partners who include Al Tamimi & Company, British Business Group, DIFC Centre of Excellence, Oxford Analytica, Simmons & Simmons, Young Arab Leaders, and DNM connect; its Media Partners which are, AME Info, Arabian Business,, Al Arabiya News Channel, CNBC, Dow Jones, Dubai Eye, Financial News, The Times, The Sunday Times, SAB Media, The Wall Street Journal, Oxford Business Group and Zawya; as well as DIFC Week's Joint Marketing Partner, Dubai Corporate Counsel Group..
In addition, DIFC Week also expresses its gratitude to Itau Securities, the Sponsors of the DIFC Week Golf Championships.
To register or find out more information about the Summit, Forum and Conference taking place at DIFC Week, visit www.difcweek.ae