Dubai: Dubai media and some business leaders rallied to support the Gulf Arab Emirate’s efforts to weather its debt crisis, saying problems had been exaggerated and the impact of restructuring overblown.
Riad Kamal, chief executive of Arabtec, said he had no doubt about Dubai’s commitment to settle its debt.
“Dubai should be given time to restructure its debt. I’m not going to lose sleep over this issue,” he said.
The crisis began on Wednesday when Dubai, part of the United Arab Emirates federation, asked to delay payment on billions of dollars of debt issued by conglomerate Dubai World and its main property subsidiary Nakheel, developer of three palm tree-shaped islands that once attracted celebrities and the super-rich.
The government of Dubai has taken a hard look at the way Dubai Inc. operates, and will fix what has not worked, English-daily Khaleej Times wrote on Monday.
“The need to restructure Dubai World is for real, and the decision to go ahead with it indicates maturity on the part of the emirate’s decision-makers,” the paper said in an editorial.
Khaleej Times defended the governent from critics who said the announcement, made just before a four-day Eid al-Adha holiday, had undermined Dubai’s credibility and transparency.
“The timing of the announcement of a possible six-month delay in repaying the group’s debt can be debated by market-makers, but not the intention behind it,” it wrote.
Some bankers and investors also believe last week’s Dubai World restructuring announcement was blown out of proportion.
“The crisis itself has been exaggerated. It is very much localised in one sector and one group. It has been escalated to a much bigger issue,” Suresh Kumar, chief executive of Emirates NBD capital said.
Michael Geoghegan, HSBC Group chief executive, said in a statement at the weekend he was “confident that the leadership of Dubai and the UAE will overcome any short-term issues they face, which appear to have been somewhat sensationalised, and continue to lay the foundations for sustainable growth”.