Senior business leaders in Dubai have spoken out in response to international pressure for the emirate to reveal its level of debt, amid fears of stalling growth.
Speaking at the Dubai International Financial Centre (DIFC) Week, His Excellency Mohamed Ali Alabbar, chief executive of Emaar Properties, said the emirate has US$80bn of debt against assets of US$1.3 trillion.“I can state categorically the government can and will meet all of its obligations going forward and I have no doubt about this country’s future,” he said.
“There has been confusion and concern about how much Dubai owes and how its debt will be financed. Concern leads to speculation. So I can say that Dubai’s current sovereign debt is US$10bn or 37bn UAE Dirhams (AED). Our key sovereign assets at their current level of undervaluation stand at $90bn or AED350bn.”
“This does not include our airports, our bridges, our metro system or our healthcare. The total debt obligation of the government’s affiliated companies is US$70bn or AED256bn. This is compared to the total asset value of the affiliated companies of US$260bn or AED950bn.”
He continued: “When we started the work in 1992, the Council was hit by rumours. We ran from them and we have been running from constant rumours for 18 years. Still there are rumours that we’re selling our property assets or selling 50pc of Emirates airline. I can categorically state this is not true.”
However he did hint at a slowdown in Dubai’s growth: “Dubai’s growth has been at a rate of 13% to 14% a year. If this comes down to 6% or 7% or 8% then fine. We’ve been running a long time and could probably do with a breather. We will use this time to learn lessons and become a stronger city.”
He added: “Today the world’s faith in the future is being tested. While we recognise with humility the many challenges that lie ahead, I can assure you we will spare no effort to secure our future.”
Head of the DIFC, His Excellency Omar Bin Sulaiman said: “DIFC Week takes place at a critical juncture for the global economy. Many see in the turmoil of global markets a crisis of epochal proportions. Yet the financial shock waves rumbling around the world could be the first birth pangs of a new economic reality… Until recently capital typically moved from the developed world to developing economies. This dynamic is now changing. New financial centres [like the GCC region] complement, if not rival, the role played by established centres like London and New York.”
Other speakers at the conference admitted the Middle East had under-estimated the extent of the global financial crisis. His Excellency Bassem Awadallah, former director of the office of King Abdullah of Jordan, told The Telegraph: “This part of the world has been slow to recognise what’s been going on global in financial markets.”