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
By Claire Ferris-Lay
Wed 02 Nov 2011 08:52 AM

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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