The Minister of Economy, Sultan bin Saeed al Mansouri, is proposing new measures to shield the economy from the global financial crisis, including reducing interest rates and cutting the cost of doing business. At a meeting yesterday, Mr al Mansouri also called for the creation of a Common Emergency Committee, responsible for providing recommendations for new ways to deal with the slowdown.
So far, the Government has taken several steps to help protect the financial system from the global crisis, including pledging as much as Dh120bn (US$32.67bn) for local banks, and insuring all interbank transactions. "Though the UAE is committed to a free-market policy, the Government must intervene, where needed," the ministry said in a statement. "We are committed to addressing the economic challenges and in formulating appropriate solutions. The ministry has set up a special team to study the suggestions by our committees, which will send its report to the Cabinet for approval and implementation," Mr al Mansouri said.
The committee will be responsible for keeping watch on the property sector and the health of the general economy. Those present at the meeting discussed several possible ways of dealing with the financial crisis, including introducing variable interest rates for businesses in different economic sectors, and increasing the availability of credit for businesses. "New mechanisms to facilitate bank deposits that will encourage business growth" were also discussed, according to the statement.
The participants said that steps should be taken to ensure that financing could be obtained for "strategic projects", to reduce interest rates, and that the industrial sector in particular should be provided with easier access to credit. "The global financial crisis demands urgent involvement of the UAE Central Bank in outlining effective monetary policies," the ministry said. Once the committee agrees on a set of recommendations it will send them to other government bodies for approval.
Mr al Mansouri said that strong economic links between the emirates already had helped to minimise the impact of the financial crisis on the overall economy. Other measures they outlined included reducing the fees for entry visas and sponsorship transfers, and providing commercial warehouses at lower cost. Those present also said businesses needed to be more transparent in the disclosure of their financial information if they wanted to attract more foreign investment.
In the past few weeks, the Government has taken several steps to increase financial transparency, including asking local banks to take more care in preparing their 2008 financial statements, and requiring many locally listed companies to provide more details on their investments. @Email:tpantin@thenational.ae
