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Sat 5 Sep 2009 08:58 AM

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Sheikh Mohammed says finance crisis a 'passing cloud'

Dubai ruler urges private sector & gov't to join forces to ride over global crisis.

Ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum called on the private sector to work with the government to get through the financial crisis, which was a "passing cloud", state news agency WAM said on Friday.

"(The crisis) is a passing cloud that will not stay longer, despite pessimistic speculations and analyses by economists and financial experts," the leader, who is also the UAE's vice president, told business executives on Thursday, WAM said.

Sheikh Mohammed said he was upbeat about the ability of the UAE government to join forces with the private sector to get over the crisis.

"Both public and private sectors must shun the will of imposing the status quo policy and adhere to the will of change for the better. Public-private sector partnership is crucial to reach this goal", Sheikh Mohammed said, according to WAM.

He said the UAE, a federation of seven emirates, would continue to provide an investment-friendly environment. The UAE is the top recipient of foreign direct investment in the Gulf Arab region.

"...there is nothing to panic or fear about the future under the available protection and incentives offered by the UAE government," he said. WAM did not say which businessmen attended the meeting.

A business and tourist hub, Dubai has been hit harder than other UAE emirates and cities in the Gulf Arab region since it has few oil reserves left and borrowing for rapid development was high.

The crisis ground to a halt a six-year-long Dubai property boom, while construction has continued in the emirate of Abu Dhabi, where most of the UAE's oil is located. The UAE is the world's third largest oil exporter.

In February, Dubai sold $10 billion of bonds to the UAE central bank to raise funds to support state-linked companies suffering from the crisis and investing in Dubai's infrastructure. (Reuters)

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raj 11 years ago

I agree with His Highness's view. But Sir please order to reduce the rents of the Dubai Freezone. Especially TECOM as they are still stuck on AED 180 -225 psft whereas all other buildings in TECOM and JLT are at 60-75 psft. How can private sector thrive if they have to fall under pressure of heavy rents in time of the passing crisis.

Ahmed 11 years ago

I agree with HH's view. As a sign of recovery, Rent should start to increase, so Real Estate Value increase, hence Demand increases on Real Estate. Which will lead to increase in Real Estate construction Which will need more people to live in Dubai, more Retail ...etc.

Honest Chappy 11 years ago

Rents increase, are you mad, to get people coming back here, we need to decrease the rents first, ahmed, your obviously a landlord, and here lies half the problem, your all greedy and want to get rich quick off the back of people wanting to work here, which is why so many have left as they can't afford to stay.... Make it easier to live here, make it easier to settle here, the economy will grow as people will want it too, at the moment, most people send money away from here to keep there interests going in there own country, due to never being able to settle here, if we could, people would keep there money here and invest in this country, helping it to grow and recover quicker....

MHM 11 years ago

When rent comes down a family would have more disposable income allowing it to spend more, hence, improving the economy! Anyways, i think that rent is still high and needs to decline further to reach its normal levels! But i hope this happens in a natural process and gradually without having people loose their jobs

Rent Surveyor 11 years ago

I agree with the rest that in order to bring back the uae to its old glowry or hay days ... people should start to stop being greedy.. !! greed is the ultimate killer ... be it for anything in life.. !! and from the last few years Dubai's own people have been greedy.. !! The goverment should realise this and address this issue. Rents ofcourse are way too high and should be down to a reasonable level where an average man with a monthly avg income can support his family and get a decent life without over stretching. Similarly prices of other things should be controlled. I remember Petrol prices jumping up with the boom, since then they havent been cut down... compare it with Saudi/Kuwait/Qatar or Oman .. all oil producing/exporting nations.. the prices are so much low. I do not understand this ...

naive 11 years ago

TRUE,WHAT ELSE IS THERE EXCEPT RENT TO JUDGE THE RECOVERY OF UAE

Jebel Ali Baba 11 years ago

Greed driven real estate speculations and over-optimistic forecasting brought the Dubai economy to an end. Unregulated and unrealistic, even though as bad planning and bad quality have caused the current stop of Dubais major money maker. Ahmed, this makes your wish unrealistic and contra-productiv. The oversupply in property in Dubai is imense. Nor reason for increase of prices but a lot for further decreases. The only way to bring back investors is a reliable, transparent and longterm secured real estate market. With realistic prices, safe legal conditions, owner-friendly support and trustful financing. Confidence and reliability are the key for every good business. This is what I understand by an investor-friendly environment.

Max 11 years ago

I'm not sure what planet you live on Ahmed but its NOT this world! I own property and i hate to say it but prices need to come down to aid the recovery of Dubai. Many factors need to be addressed before there will be any signs of recovery. New government regulations, visa law changes, legal ownership addressed, retail prices coming down drastically, cost of doing business to name a few. Despite landlords hoping and wishing for rents to stabilise and even go up, IMO, they will not. In certain parts, yes they will like the Palm and in general property terms, its the survival of best located and best finished that will hold prices. All others will flounder to a level determined by the market. Also a lot of landlords have purchased near to or at the peak of the market so the rental returns will be so low, they will all be holding out in hope. International confidence has all but gone so this also needs to be addressed for any signs of recovery.

MM 11 years ago

Shame that Ahmed thinks Dubai can recover with increased prices. Ahmed, if you get a chance, visit Malaysia and have a check how busy they are with tourists through out the year inspite of recession. Because the prices from A-Z are affordable. Hotels, rents, restaurants, theme parks, shopping, taxis, metro, trains, busses, and everything... is just affordable and attractive. Dubai should have its prices attractive, then we will see a recovery mode. With all due respect, we all wish to see Dubai boom again but this time it should be careful and not in greedy manner. We miss the old Dubai.

Dod 11 years ago

In answer to your question, Dubai recovery and success can be measured by GDP; prfitability of businesses; job creation etc Rent rates (except in the very short run) are purely a result of demand and supply of available units. Dubai business could recover without an increase in rent if additional supply continues