Dubai ruler says worst of crisis is over

The global financial crisis has not hampered Dubai's ambitions, its ruler said on Monday, adding the Gulf emirate had passed the worst of the economic downturn.

Sheikh Mohammed bin Rashid al-Maktoum, who is also prime minister of the UAE, said he had full confidence in the Dubai's ability to act in the global market.

"The worst is over and Dubai is now well-placed," he said in a speech to investors. "The global economic crisis, despite its impact, will not deter Dubai's ambitions."

Dubai's economy has been hit hard as the global credit crunch and a steep decline in crude prices ended a six-year boom in the region and sent the emirate's property sector into decline.

Sheikh Mohammed added that real estate was not the only driver of Dubai's economy.

He said the second tranche in Dubai's $20 billion bond programme will "receive subscribers", and will be used to settle its future obligations.

The remarks by Sheikh Mohammed suggested the second tranche would not be purchased entirely by the UAE central bank, which bought the first $10 billion tranche.

"The second tranche of the bond programme will receive subscribers and will be used to settle Dubai's obligations in future," said Sheikh Mohammed, speaking at the investment meeting organised by Bank of America-Merrill Lynch.

Dubai raised $10 billion in emergency cash from the UAE's central bank earlier this year through a bond issue as part of a plan to raise a total of $20 billion, setting up a support fund to manage the proceeds.

The ties between Abu Dhabi and Dubai should not be questioned, Sheikh Mohammed added, saying the two wealthy emirates were one "family."

Abu Dhabi is the biggest and richest in the seven-member UAE federation, and the main contributor to the federal budget.

Wide speculation that Abu Dhabi would be obliged to support Dubai through the global crisis - either through the federal stimulus programmes or secret, bilateral deals - led to talk of increasingly strained relations between the two.

"There is no Dubai and Abu Dhabi, we are one," he said.

"Who doesn't understand this should do their homework before they start talking," he said.

"We will be there for each other when we need it."

"And I want to tell those people who nag about Dubai and Abu Dhabi to shut up." (Reuters)