As Dubai's real estate sector feels the mounting strain from the global economic crisis, many are asking whether the authorities have done enough to protect the Emirate against the effects of the slowdown.
However, HH Sheikh Mohammed has now stepped in to address those issues by creating the Dubai Advisory Council - a high-level economic body that is working to address the issues facing the finance, real estate, banking and equity market sectors.
Meeting on a minimum monthly basis, one of the team's first tasks will be to manage current and future flows of new projects on to the market, in order to maintain equilibrium and demand within the sector.
It's easy to forget that it was only three months ago, in October, that Nakheel launched their world's tallest tower project to an excited and confident Cityscape; it could be argued that the sheer pace of the turnaround inevitably caught both authorities and developers by surprise. However, the Nakheel Tower was launched into a climate that was witnessing multinationals fold, Wall Street crashing and a whole handful of the US' biggest names in banking bombing dreadfully.
Speaking at the opening of the DIFC Forum, HE Mohamed Alabbar, who has been nominated to lead the Council, made it clear that he was not blinkered to the severity of the current situation. "I will not mince words. I am here to state facts," he began, before describing the crisis as "without precedent."
The wealth of Dubai - like that of other Gulf countries - provided a buffer to many of the problems for a long time. But fail to prepare and you prepare to fail, said Benjamin Franklin.
"Let me assure you that we have our finger on the pulse of the real estate sector. Today, the real estate sector is witnessing a healthy correction. This is a consequence of global financial conditions and is inherent to the very nature of the market.
As we all know, real estate is cyclical."
Alabbar went on to dispel widespread rumours and confusion regarding Dubai's debt obligations, stating that the figure currently stands at AED 37 billion; however, key sovereign assets - excluding infrastructural support such as airports, bridges and roads - are estimated at AED 330 billion. Obligations, he said, can and would be met.
For some, the creation of the Advisory Council may have come too late, but it is undoubtedly a positive step. And, drawing on the example of the recently announced merger of Amlak Finance and Tamweel under the umbrella of the UAE Real Estate Bank, it is equally indubitable that the Council is able, and determined, to take effective action.
"Will the Government step in and help associated and affiliated companies if an when the need arises? Yes, we will. And I hope this statement is clear."
Major banks and their credit card operations in the UAE are losing as much as 8% in annual revenues due to a rising number of ‘skips' - customers that flee the country leaving a trail of bad debt behind - according to the CEO of RAK Bank.