UAE 'less afflicted' by oil price slump - ambassador

PROJECT RETHINK: The UAE's ambassador to the US said Dubailand would be re-evaluated based on the financial situation in Dubai.

The UAE will be "less afflicted" than other oil producers by falling prices due to its economic diversification, the UAE's ambassador to the US has claimed.

"We're well on our way to making sure that price fluctuations, whether they're big or small, do not affect the overall economic livelihood of the UAE," Yousuf al-Otaiba said in an interview with newswire Bloomberg in New York.

However, he admitted that the massive Dubailand leisure and tourism project would be re-evaluated amid the current economic climate.

He said that some 65 per cent of the UAE's gross domestic product (GDP) comes from industries other than oil and gas, a figure they hope to increase.

He added that the UAE has budgeted for an average oil price this year of between $40 and $45 a barrel.

"They are very conservative estimates, and anything above that is considered a windfall," Al Otaiba said.

The consensus forecast of 32 analysts in a Reuters survey, taken Jan. 5-7, showed US crude would average $56.20 a barrel in 2009 and London's Brent crude $54.95.

The UAE's economy, which has enjoyed seven consecutive years of growth in excess of 2.5 per cent, will grow by three per cent in 2009, Otaiba added.

The global financial crisis will mean some real estate projects, such as Dubailand, a plan to make a three-billion square-foot leisure and tourism destination, will be "re-evaluated based on the financial situation in Dubai", he said.

"All infrastructure programmes are going to continue on track," including cultural, educational and health programmes, the Dubai Metro, highways and energy, he said.

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