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Wed 23 Jun 2010 07:34 AM

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Dubai, UAE economies are 'fine' - Sheikh Mohammed

Dubai's ruler says challenge of global downturn is being dealt with - TV interview.

Dubai, UAE economies are 'fine' - Sheikh Mohammed
UPBEAT MESSAGE: Dubai ruler and UAE Prime Minister Sheikh Mohammed Bin Rashid Al Maktoum. (Getty Images)

The economies of Dubai and the UAE are "fine" and officials are dealing with the challenge presented by the global downturn, Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum has said.

In an interview with CNN to be broadcast on Friday, Sheikh Mohammed, also the UAE's Prime Minister, said: "I think the recession is all over the world and I don't call it a recession, I call it challenge."

On the issues relating the to restructuring of Dubai World's debt, he added: "The companies are restructuring because it's a new world. You have to stop and restructure."

The UAE economy is expected to lag its Gulf peers this year as banks in the world's third-largest oil exporter remain reluctant to lend due to a $23.5 billion debt restructuring by conglomerate Dubai World.

Sheikh Mohammed added in the interview: "Without challenges, life would be boring. Dubai and Abu Dhabi and the rest of the Emirates are fine."

In reference to Emirates Airlines’ orders, he added: “I think they will have to order some more in the air show in Farnborough.”

While in reference to Dubai World, he added: “I’m not worried about the company, the company has got the wealth. So they have something, and they will come back very very quickly.”

Last month, The UAE's economy minister predicted growth of to up to 3.2 percent this year and added that he saw no further major restructuring of Dubai debt being needed.

"We have heard different numbers (about 2009 gross domestic product growth)," Sultan bin Saeed al-Mansouri said.

"The good news is that it was positive 1.3 percent and we expect GDP growth for 2010 to be around 3 percent," he added.

Full transcript:

John Defterios - I was looking back, 2 months after 9/11 you put a plane order in for 15 billion dollars and 6 months after the restructuring started during this banking crisis, you put a giant 11 billion dollar order in for planes. You obviously are trying to mark your territory in the airline space and be bold about it.

Sheikh Mohammed - I think it is opportunities; you have to grab the opportunity and not lose that opportunity for another opportunity. Therefore I think Emirates Airlines, giving order after 11th September because that was an opportunity. And now of course because of the growth, the airport growth and the passenger growth and the tourist growth I think that's why they order these more. I think they will have to order some more in the airshow in Farnborough.

John Defterios - So another large order in July is what your saying?

Sheikh Mohammed - I think they will have to because of the growth, where I see the growth in Dubai Airport and the UAE is very big.

John Defterios - Listening to you, you don't seem to share any of the concerns for example that the International Monetary Fund has about a persisting recession in Dubai and throughout the region.

Sheikh Mohammed - Well I think there are recessions all over the world. And I don't call it a recession, I call it a challenge. Every day was a challenge to us a challenge to find the water, a challenge to find a meal, a challenge, everyday a challenge. Life will be boring if there is no challenge. Or we call it recession or we call it whatever you call it. No Dubai and UAE, Abu Dhabi and the rest of the Emirates are fine, you know, we know it is recession, we know it is challenge and we dealing with it.

John Defterios - How did the global recession and the crisis that faced Dubai, redefine the relationship within the UAE and specifically the relationship with Abu Dhabi?

Sheikh Mohammed - The relationship between Dubai and Abu Dhabi both ruling family is from the same tribe. So we are one family and the UAE is not only Abu Dhabi and Dubai, there are other five other Emirates and we all look after each other. We are one nation and we are one country and one president.

John Defterios - If we can delve into this a little bit more. After what we've seen in the last six months will additional external support be necessary in this restructuring that's taking place?

Sheikh Mohammed - Restructure, the companies are restructuring because it's a new world. I'm not worried about the company, the company have got the wealth. So they have something, and they will come back very very quickly but the relationship this is very good between the Emirates. And we have a challenge now to bring the other Emirates in line with the Abu Dhabi and Dubai.

Sheikh Mohammed - It's not only me, as a Chairman, as a ruler or as a Prime Minister, no there is a team behind us. The worst is passed by and now we are looking for the next growth and we have to be ready for it and take the opportunity and get in before the rest of the world. Everything we started, we are going to finish. Maybe some projects that we are thinking of or in the books that might delay for 6 months, 8 months, 1 year. But the rest is going forward.

John Defterios - You don't seem overly concerned about the restructurings that need to take place in the future. We've reached the bottom, you think we can move forward with no real hurdles to cross in the future.

Sheikh Mohammed - We're already moving forward. The structure is ready, bridges, roads, tunnels, everything. We don't have to build, so we are ready now to move forward with the country.

John Defterios - So you have an advantage with infrastructure? How do you protect these sectors from the competing states around you, like Qatar or Saudi Arabia or even Abu Dhabi that have energy resources that you don't have?

Sheikh Mohammed - Abu Dhabi is my country and Qatar is my neighbour and Saudi Arabia. I wish them good luck and I will help, if I can. Even if they ask me, I will help with their growth. Because we need, the whole area needs to grow really, not only United Arab Emirates.

John Defterios - You've created a fourth trading hub. Most people thought of Asia, Europe and the United States in the past. But you personally helped define what the Middle East stands for but should there be greater unification?

Sheikh Mohammed - We understand that the power is shifting so therefore we have to be ready for it.

John Defterios - If I'm looking at the market of a Middle East at a market of 300 million people and then you have the Gulf states trying to create a single currency. Are you a supporter of the single currency in that process?

Sheikh Mohammed - The Euro is in trouble and we thought of the Gulf currency and we said, well the UAE said 'not yet' and I think they are right, until we are sure. So therefore now we will not change anything for the time being until we see something solid really and profitable.

John Defterios - So you think the stability of the dollar peg serves the interests of the UAE?

Sheikh Mohammed - Yes, Yes and we still believe in the dollar.

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Hany 10 years ago

Dubai has no option other than winning... It would be great to see Dubai recover from all of this to prove to all others that Dubai has a sustainable business model and is an example of Arab resilience. Long live UAE, Long live Dubai!

MAHOMEDZICAR OSMAN 10 years ago

Inter acting with readers its aa very important tool, which once again I'm using to pay my respects to this beatifull Country and to his Rullers. We all are hoping to get more action and statetments like this and as Dubai investor I would like to see His Highness inter acting locally a bit more with small enterpeneurs. Dubai will be remain a major business hub for Africa and, in my humble perspective, the small scale business need to be empowered, because medium and small size companies will be the future of Dubai, as a major business hub in the region.

The Other Donald 10 years ago

I give all my praises to Dubai to show the rest of the countries in this World Cup of Financial Destruction how it is to be one of the smallest cities to pull itself out of financial self destruction and propel itself ahead of all the rest to full recovery. If anything can pull you out it is your desire to continue to spend more on the development properties that you have already started only to amass more than currently can possibly be occupied, only to prove that if ifs and buts were fruits and nuts everyday would be Holiday! Congratulations on a fine start to recovery and Goal Dubai!

Syed Moinuddin Quadri 10 years ago

I completlly agree with His Highness i as a busniessman here in dubai since 15 years lots of up and down comes through but doing busness in dubai is a excellent and no doubt about it dubai is top of the world and will be top of the world

Randa Yacout 10 years ago

Although people in my business field have been directly affected, but I Back Dubai 100%.. Just wish that in the meantime, that RERA can look after small business owners and stop increasing rents even if it is what they believe below their estimate rate.. just until we recover all the losses of staff and business.

Mazen laham 10 years ago

From our heart a strong support and love to Sheikh Mohamed and dubai,May god bless them always.

Rick J Advano 10 years ago

Our Company is firmly committed to Dubai and know that it is a matter of time before things turn around. I would just like to see a little more speed in the firming up of important legislation that will instill confidence in Dubai on the World Stage,

Paul King 10 years ago

My guess is that we are slowly turning the corner away from the madness, speculation and unsustainability of the past 5 years. We are returning to normal. The extraordinary is in the past. Let's hope that rental rates, property values, and consumer prices continue to collapse down to the levels that a successful Dubai will need. We need value, quality and customer service to return to previous levels.

Maryam Hassan 10 years ago

When Sheik Mohammed said ‘"I think the recession is all over the world and I don't call it a recession, I call it challenge." Is because he has a large vision and Focuses on the positive aspects of Life and Financial Situation, as he mentioned is a challenge not a recession… Dubai is the best place to be, because everything happens here so fast, that you wake up every day with something new to discover! There are new streets built, new hotels (Armani first hotel is amazing), new and huge shopping malls, Dubai is the place where NOT POSSIBLE THINGS BECOME POSSIBLE. That’s what I call a Large vision you are on the right path Sheikh Mohammed and keep moving forward as always.

Riaz Ahmed 10 years ago

Dubai is truly an amazing place lead by an even more amazing and inspiring leader, HH Sheikh Mohammed. I am confident that lessons learnt from the past will greatly help Dubai to meet the future challenges of a world that has drastically changed