Sheikh Mo on Dubai's Freefall: "We are fine!"

How's the Dubai miracle doing? Just fine, says Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum. Not so great, say Emiratis, expats and reports in the foreign press.

 Dubai Inc.'s CEO has kept his head down the last seven months, preferring to recite Arabic poetry than talk about how the global financial meltdown is affecting his once-booming sheikhdom. With the international credit squeeze battering Dubai's state-owned business sector, and the stock exchange and property market in a free fall, Dubai got some badly needed relief when it effectively received a $10 billion bailout from its oil-rich sister emirate, Abu Dhabi. 

 Meanwhile, the international press has had a field day relating Dubai's woes. This one in The Independent two weeks ago seems to have hit a raw nerve (the author leads on a desperate expat living out of her Range Rover, and rubbishes Dubai as a city built on "credit and ecocide, suppression and slavery") and suddenly Sheikh Mo is talking. Last week, he gave what his official website dubs his first "e-session" with the media, consisting of the Arab press. 

 In some selected excerpts from the "press conference," here's Sheikh Mo's take on how Dubai is doing:

 On recent criticism:

In fact it was a "media bombardment" targeted at the UAE [United Arab Emirates] as a model for a federal state, a successful and prosperous Arab country. And Dubai, the city that has set up a successful economic model at a global level, was under a daily attack by some Western media, as if they were in a race against time to harm the UAE... It seems that the success of the Arab, whether individual or state, city or a company, is seen as unacceptable. It seems that seeing distinct images of successful Arabs and Arab countries disturbs some people. They would rather stick with the distorted images of Arab stereotypes in their minds.

On whether Dubai's "bubble" has burst:

This bubble is found only in the minds of those who often keep repeating it and do not know its meaning. The future will prove to them the truth. Let me assure you we are fine, we have overcome the crisis with the least amount of losses.

  On the way out of the global financial crisis:

 It was expected that our region would not be immune to the crisis, especially in view of the fact that it led to the credit freeze, write-downs at banks, deferral of mutual credits, and a freeze on lending in some of the wealthiest industrialized countries, such as the United States. The crisis hit the world in September 2008, but I think that the panic phase is over now, especially after the intervention of governments in many major countries to regulate financial and banking sectors, and the allocation of large sums of money to revitalize their economies. 

  On the threat to Dubai:

We did not at any time feel that the financial crisis is a threat. The worst is over and behind us. Since the eruption of the crisis we did not hear of any state-owned bank or company announcing bankruptcy. None of the economy sectors was snapped. We are currently implementing plans and programs of action to benefit from the lessons of the crisis and ensure the recovery of the negative effects...

 The current crisis has brought Dubai's developmental model with all its successes into a tough test... I know that some people from outside the region have wished that Dubai model will go down the river. I am fully aware that some financial and economic circles were not happy with the progress we managed to achieve on various tracks including investment, aviation industry, IT and global competition in managing and financial markets... I strongly believe it won't be long before international focus will shift from what is claimed to be Dubai's shortcomings to Dubai's and the UAE's overall success in passing this difficult test.

 On UAE's prospects for growth:

 We expect that growth may not come at the same rate of pervious growth records we sustained over the past few years. While speculating global economic contraction of 0.5 percent, international financial bodies forecast a slight growth for the UAE economy. Other forecasts speculate a 3 percent growth for the UAE economy.

 On reports that Dubai has become a ghost town:

 It is truly sad to find international publications that have usually boasted about factual and precise reporting issuing articles based on mere rumors and baseless speculations. We are fully aware of the hidden fierce global economic competition between different parties who are in the same line of business. When a city or a country decides to integrate itself as an effective international player, it should not expect an easy journey full of roses and good wishes.

On further government intervention:

 Optimistic voices are getting louder worldwide, while markets' fear has started to gradually diminish. The UAE has one of the region's most progressive, vibrant and open economies. Efforts by world leading economies to deal with the financial crisis have been effective and fruitful, while the tendency to increase international cooperation – including recent decisions by the G20 summit in London – remains very positive and encouraging. I can confidently say that the UAE is very well positioned on the recovery path, thanks to our domestic policy measures – such as the fiscal stimulus, easing monetary policy, and increasing liquidity in the system. There are some early indicators of international economic recovery. Yet, I cannot predict that the global economic recovery will proceed without potential hurdles. I cannot also claim that repercussions of the economic financial meltdown are over yet. But what I can say is that the worst is already behind us, and there is now a solid will and determination among concerned countries to join hands to collectively revive the global economy as well as their own individual economies...

 Increasing financial support to other business sectors is probable, pending the actual needs of each particular sector. The UAE's tourism sector is in a good shape, with UAE hotels recording high occupancy rates. The country's tourism industry has already successful survived the worst period and resiliently adapted itself during the most critical times.

 --By Scott MacLeod/Cairo