"Dubai World WILL pay its debts"

Sultan bin Saeed al-Mansouri

The United Arab Emirates economy minster has said that it only a matter of time before Dubai World restructures its debts and meets its obligations to its investors.

Speaking to the WAM news agency, Sultan bin Saeed al-Mansouri said that, "Dubai is an integral part of the United Arab Emirates, the second largest Arab economy.

"Dubai World's debts do not affect the economic performance of Dubai or the UAE and it is a matter of time before the company restructures its debts and honours its commitments as per a scheduled plan."

"Negative campaign"

Sultan al-Mansouri also slammed the "the negative campaign" against the UAE and Dubai, that had been spread by the world press services.

"We are surprised by this negative campaign on the UAE and Dubai," Mansouri said. "The emirate has accomplished a strong track record of growth that would have taken decades for other countries to achieve.

"Debt restructuring is a normal business response and the decision by Dubai World to tackle its debts is on the right track and proves the transparency of Dubai."

The Dubai debt crisis

There had been fears of a second recession when Dubai announced to global markets that it needed a six-month repayment freeze on debt issued by government-owned Dubai World. The emirate had undergone a transformation into a financial, trade and tourism hub, but without oil reserves like other parts of the UAE, Dubai's success came entirely from its property boom.

As such, Dubai World had US$26 billion worth of debt owed to property firms such as Nakheel and Limitless.

"The UAE has already taken concerted efforts to meet the challenges arising from the financial crisis," Mansouri said, citing a three-year guarantee for bank deposits, and injections of extra liquidity into the banking system.

"The Central Bank has also injected money in the UAE banks to address any problems that might emerge from the reaction to Dubai World debts," he said.

The economy minister failed to give any specific indication of what the government would do to help Dubai World. Abu Dubai has already said that they would not be bailing out its neighbour.

Relevant articles:

How will the Dubai crisis affect UAE growth? | Is Abu Dhabi going to help Dubai? | The Dubai debt crisis

Like this article? Get the RSS feed: