European countries grappling with Greece's financial crisis could learn from Dubai's handling of its own debt problems, Sultan Ahmed bin Sulayem, the chairman of Dubai World, said yesterday. The Dubai Government had intervened positively to provide a solution to the emirate's debt problems and ensure no banks were in financial danger, Mr bin Sulayem said. Dubai's response to the financial crisis "should be adapted and learnt by the European countries in facing and tackling the crisis in Greece", he said during a speech in Dubai yesterday.
Mr bin Sulayem's Dubai Government-controlled company last week announced a US$23.5 billion (Dh86.31bn) restructuring deal with its main lenders in a move helping to ease the emirate's most immediate debt burden. Thousands of kilometres away in the EU, despite a multibillion euro bailout of Greece and a $1 trillion emergency package to safeguard the currency, fears persist about the spread of sovereign debt turmoil across southern Europe. The financial risk has prompted plans for severe budget cuts in Spain, Portugal and Italy.
In contrast, Mr bin Sulayem is optimistic about Dubai's future. "From experience, I know we should be confident that the worst is over," he said. "Not a single bank is in danger, not a single company is going to be losing." Dubai's economy successfully overcame an economic crisis in the 1980s after government support stemmed financial problems in banks and property companies linked to the emirate's growth at the time.
He said Dubai's strategy of investing in infrastructure had been vindicated as it now had among the world's best transport networks and buildings. "What we did in Dubai was not a mistake. It was intended. We wanted to grow and be the way we are today," he said at the opening of a Mars chocolate factory in Jebel Ali. The emirate last year received a $20bn bailout from Abu Dhabi to stabilise the economy after property prices fell by up to 50 per cent from their highs in 2008.
Dubai's debt is estimated at about $107bn, equivalent to 136 per cent of its GDP, according to the Institute of International Finance (IIF). tarnold@thenational.ae aligaya@thenational.ae
