The UAE is not sheltered from the financial crisis and priority should be on problem solving in the region, according to the head of Dubai's Department of Finance.
"If we see a bank like Gulf Bank in Kuwait [suffering] and businesses in Saudi Arabia and mortgage providers [across the Gulf] struggling to get funding, it's clear that we have issues," said Nasser bin Hassan al Shaikh, the director general of the Dubai Department of Finance, who was speaking yesterday at a panel session at the DIFC Week conference in Dubai. "The priority is to secure our home base first."
Mr Shaikh emphasised the importance of companies working together to get through the global ordeal.
"When it comes to real estate, this was the first time that all major developers sat down and talked openly about projects," he said. "If any company has a chance of dealing with this crisis, they must work together."
Arif Naqvi, the head of one of the UAE's leading private equity houses, said it was difficult to raise funds during these troubled times. "Banks are not willing to provide long-term stable sources of capital for important projects, whether they be infrastructure or otherwise," said Mr Naqvi, the founder and chief executive of Abraaj Capital.
However, Bryan Stirewalt, the director of supervision at Dubai Financial Services Authority, warned that non-bank lending organisations could hurt the financial stability of the country if not regulated. He said lenders that were closely tied to property developers employed less-stringent loan practices than banks because they made their profits principally from the sale of the property, not the loan. He said similar situations in the US had caused the subprime mortgage debacle, where mounting defaults from property loans rocked the world economy.
"That misplaced incentive [to sell the property] led to the current problems," Mr Stirewalt said. "The credit risk that they created was the hot potato that went up all the way to the banking system."
In the US, he said, almost all industries were watched by different regulatory bodies but no one was looking at the overall market, which was one of the reasons for the current woes in the US, and globally.
Michael Lesser, the managing director of supervision at Qatar Financial Centre Authority, said financial companies that bought debt securities put themselves in danger by depending too much on rating agencies, "which consider solvency not volatility". He said the boards of companies in the Gulf should become more involved in setting risk strategies.
While promoting the importance of solving regional issues in light of the global financial crisis, industry officials have warned against protectionism.
"International co-operation is essential, it's very important that economies around the world continue to work together," Peter Oppenheimer, a partner and global strategist at Goldman Sachs, said at the panel shared with Mr Shaikh. "There is a risk that people will look inward and try to protect their own neighbourhoods, but we live in a global neighbourhood now and... global interests are very well aligned."
He added that economies the world over were not expected to begin growing at normal rates again until 2010.
"Even as economies start to recover in the second half [of next year], it won't be until 2010 that economies grow back [at steady rates]," said Mr Oppenheimer. "Having said that, markets have already discounted enormous amounts of value and they will recover in anticipation of opportunities made."
shamdan@thenational.ae
mjalili@thenational.ae
The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Company%20profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Fasset%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2019%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Mohammad%20Raafi%20Hossain%2C%20Daniel%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%3C%2Fstrong%3E%20%242.45%20million%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2086%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-series%20B%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Investcorp%2C%20Liberty%20City%20Ventures%2C%20Fatima%20Gobi%20Ventures%2C%20Primal%20Capital%2C%20Wealthwell%20Ventures%2C%20FHS%20Capital%2C%20VN2%20Capital%2C%20local%20family%20offices%3C%2Fp%3E%0A
APPLE IPAD MINI (A17 PRO)
Display: 21cm Liquid Retina Display, 2266 x 1488, 326ppi, 500 nits
Chip: Apple A17 Pro, 6-core CPU, 5-core GPU, 16-core Neural Engine
Storage: 128/256/512GB
Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4
Front camera: 12MP ultra-wide, f/2.4, Smart HDR 4, full-HD @ 25/30/60fps
Biometrics: Touch ID, Face ID
Colours: Blue, purple, space grey, starlight
In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
What is the FNC?
The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
ADCC AFC Women’s Champions League Group A fixtures
October 3: v Wuhan Jiangda Women’s FC
October 6: v Hyundai Steel Red Angels Women’s FC
October 9: v Sabah FA
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded