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Dubai waterfront - Source: ONE News -
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A top Dubai official moved to assure investors that the emirate,
hard hit by the financial crisis, was committed to meeting its
financial obligations, one day after Dubai's ruler dismissed his
finance chief.
The surprise dismissal of Nasser al-Shaikh as the emirate's finance
head triggered questions among some investors as Dubai and its
constellation of government-controlled companies effort to
restructure and meet looming debt needs.
"The government is firmly committed to sustainable fiscal policies
and to adopt actions that are appropriate for the current
circumstances taking into account the scope of the global crisis,
meeting Dubai's financial obligations and future development
requirements," said Mohammed al-Shaibani, aide to Dubai's ruler, in
a statement issued late on Tuesday.
Al-Shaibani is director of the office of Sheikh Mohammed bin Rashid
Al Maktoum, the ruler of Dubai and vice president and prime
minister of the United Arab Emirates, the Gulf confederation to
which Dubai belongs.
Al-Shaibani expressed his support for the new finance director,
Abdul-Rahman al-Saleh, as "the right man to lead the next stage of
managing the economic situation".
Saleh previously held a position at Dubai's customs authority, a
key body in the trade and tourism hub, known as home to the world's
tallest building and man-made islands built in the shape of palm
trees.
The timing of the surprise leadership switch underscores Dubai's
delicate financial situation after the UAE central bank bailed out
the emirate with a US$10 billion bond programme.
The emirate has said it has outstanding debt of around US$80
billion.
Unlike many of its neighbours, Dubai has few energy resources or
foreign investments to draw upon for revenue during the financial
crisis.
The crisis has hit Dubai's highly exposed economy
disproportionately hard due to its reliance on cyclical industries
like trade, finance and tourism, and after its real estate bubble
burst late last year.
The emirate is using the bailout proceeds to provide financing to
its myriad of cash-strapped firms, some of whom are in arrears in
paying contractors.
The payouts have not been made fully public, leading to
questions about which companies will receive the cash and who they
will repay.
Dubai officials have said they aim to raise another US$10 billion
in a second bond issue through the market, making leadership
changes and payout plans of keen interest to investors.
During his brief tenure, Al-Shaikh earned a measure of respect from
investors as head of the department for his efforts to navigate the
difficulties created in the former boom-town following a liquidity
crunch and collapse in real estate markets.
In his new position, al-Shaikh will serve as an assistant to the
director of the ruler's court for foreign affairs.
He holds leadership or positions at a number of important Dubai companies.
