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Wed 2 Nov 2011 08:52 AM

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UAE near immune to financial crisis, says Al Habtoor

Head of Dubai conglomerate says Gulf state will be least affected by economic woes

UAE near immune to financial crisis, says Al Habtoor
Habtoor Group expects to see a 15% rise in profits in 2012, its chairman said

The
chairman of the Habtoor Group has said he is not concerned about the impact the
global slowdown will have on the UAE’s economy and expects to see a 15 percent
increase in his business in 2012.

Khalaf
Al Habtoor, who runs one of Dubai’s largest conglomerates, said he believes the
Gulf state will be largely shielded from the impact of a potential second
global recession.

“The UAE
will be the least globally affected,” he said. “I think there is an
improvement; companies from across Asia and the Middle East are moving here and
people are investing and bringing money to the country and buying. If they
don’t see stability and growth why should they come?”

The
Habtoor Group, which operates across a string of sectors including construction,
hotels and cars, expects to see profits rise by 15 percent in 2012.”

“For
2012 I think it will go much higher than [this year], in excess 15 percent.
This growth will come from car sales, car leasing, hotel business [but] not
construction – construction will take time.”

Concerns
that Europe’s debt crisis is weighing on export-dependent economies have been
mounting. Greece’s Prime Minister on Monday announced his government would hold
a referendum on a new austerity package, further threatening to intensify the
euro zone crisis.

Sultan
Nasser Al Suweidi, the governor of the UAE’s central bank, on Monday said he
expected a slowdown in the Gulf state.

“We will
see a slowdown of business due to an expected economic downturn [globally], due
to effects of the European crisis and the situation in the US as well,” he told
newswire Reuters.

“There
will be an effect on China. China is the main economy to affect the supply of
oil...so there will be impact on local economies of the GCC,” he said, adding
that he not very concerned about a severe slowdown in China.

The UAE
economy is expected to increase by 4.2 percent in real terms this year helped
by robust oil prices, according to the National Bureau of Statistics.

In spite
of a weak property market the Gulf state has benefitted from a rise in
increasing trade and its status as a safe haven amid the regional political
unrest which affected neigbouring Arab countries.

State-backed
Investment Corporation of Dubai and Canada’s Brookfield Asset Management on Oct
26 said it would start a $1bn fund to buy up assets in Dubai's battered real
estate market. The following day Dubai’s ruler approved a $554m package to
develop tourism, residential and commercial projects across the Gulf emirate.

Announcements
such as these are welcomed by the construction industry, said Al Habtoor, who
recently announced plans to restart a hotel project on the Palm Jumeirah,
delayed amid the downturn. 

“If you
see every day the government of Dubai doing projects this is fantastic, this is
encouraging me to do projects. There is demand, growth,” he said.

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Mike DeLonghi 7 years ago

With all respect for Mr. Al Habtoor but why are so many people eager to 'state the obvious' - the 'obvious' here being that UAE is immune to "financial crisis" when it is so painfully obvious that UAE is NOT immune to global financial trends. We already leaned that lesson, didn't we?

Jon 7 years ago

This sounds almost identical to the claims in 2008 that Dubai was immune to any global crisis - just before Dubai crashed in spectacular style.

procan 7 years ago

I hope you were misquoted Mr. Al Habtoor as the comment that is reported here flies in the face of reality.

Billy 7 years ago

It was exactly this attitude that drove Dubai headlong into the economic crisis in the first place. I am sure the 24% of the Aldar workforce who have just been made redundant will not feel immune to the global crisis, nor will the other poor people who are about to suffer the same fate in a couple of weeks. Dubai's leaders need to make credible, factual commentary acknowledging that Dubai is in fact part of the global economy and therefore affected by it.

Jo 7 years ago

Have they learned nothing?!

sonnydubai 7 years ago

Very odd comments when you consider Aldar laying off 24% of its staff this week and other projects in Abu Dhabi being halted or scaled back. No country on earth is immune to this financial disaster. Dubai is certainly better than 2009 but we all have a very tough couple of years ahead - we are not out of the woods yet, by a long stretch.

abdul hafeez sheikh 7 years ago

UAE is developed Economy and such economies have rise and Falls ,but i am sure that with such good infrastructure and protection for Businessmen UAE will be back on road again

Mike DeLongi 7 years ago

ehhhh.....Emirates NBD lost 8% over the past 2 days due to Greek uncertainty and Emirates presented the poorest result in ages due to international factors. Does not sound like immunity to me.....

Khalid Mohd. 7 years ago

Emirates Airline's profit dropped by 75% this year. Cargo is down too. No economy is immune. We need to be honest with ourselves. It is ok, rough time, but it is part of growing. There is no shame in facing hard times. Mr Al Habtoor, sorry I disagree.

Kaptain Saif 7 years ago

Only iron curtain economies are immune but that takes away the oxygen from the economy to run.

While Dubai has already reached a point after the crisis, there is nothing to lose anymore - which in that another way is a correct point from Mr. Al Habtoor.

Dubai and the rest of the Middle East, have a lot of homework to do in terms of economy self sufficiency - market factors aren't flexible enough to allow someone to draw a good balance sheet over the next few years.

Rough sailing ahead..!!