ABU DHABI // Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, Wednesday appointed his top financial official and a banker who specialises in selling property to run the new fund tasked with doling out US$20 billion (Dh73.45 billion) in emergency cash to government-related companies. Sheikh Mohammed issued a royal decree naming Abdulrahman al Saleh, director of general of Dubai's Department of Finance, as chairman of the Dubai Financial Support Fund, which was established last month. To head the fund's day-to-day operations, he named Marwan Iqbal Abedin, who until recently was director of marketing and originations at the Emirates National Securitization Corporation, a government-controlled investment bank that sells mortgage-backed securities and other complex debt obligations.
"The Dubai Financial Support Fund is central to the achievement of Dubai's long term strategy for economic growth," said Mr al Saleh in a statement accompanying the announcement. "The new Board's primary duty will be to prepare and adopt the criteria to be used in the allocation of funds for Dubai's strategic revenue-generating projects." Dubai has already borrowed $10 billion from the Central Bank and plans to issue bonds to raise $10 billion more as it races to keep key infrastructure projects rolling and make payments on an estimated $80 billion in debt in the face of falling property prices and tight credit.
Residential property prices in Dubai have fallen roughly 30 per cent since their peak last September, according to data from Reidin.com, which compiles transactions registered with the Dubai Land Department. The decline has contributed to a dramatic slowdown in economic growth, with economists predicting that the economy will shrink slightly this year amid lower oil prices and rising joblessness in the property and construction sector.
The new Fund will report to Dubai's Supreme Fiscal Committee, which is headed by Sheikh Ahmed bin Saeed al Maktoum, chairman of Emirates Group, and which includes Mr al Saleh as well as Mohammed al Shaibani, CEO of the Investment Corporation of Dubai, among others. Investors have been eager to know just how the new Fund will distribute its funds, but when he announced the fund, Mr al Saleh said it would leave it up to recipient companies to disclose whether they had received any money and under what terms.
Mr Abedin, the Fund's new executive director, reiterated that point in yesterday's announcement, saying: "The loans will be made on a commercial basis, and it will be up to each recipient of the financial support whether to disclose the extent of its borrowing from the Support Fund." warnold@thenational.ae