The past couple of months have witnessed optimism in Dubai’s businesses; People realized that there is no use of being over protective and that corporate spending is the only way to build back confidence.
Just until… Dubai has asked to delay payment on billions of dollars of debt issued by conglomerate Dubai World and its main property subsidiary Nakheel.
As this might come at a shock, analysts around the region were not that surprised by the news, as for the past year real estate in Dubai was disastrous and the restructuring of Nakheel did not make the most of sense.
The funny part is how the international media disagrees on what could be the possible results of that standstill. The “TIMESONLINE” entitles its article “Dubai debt fears threaten credit crunch 2 — and RBS is exposed” and talks about how serious this second version of the crisis could be for the whole world. While CNN.com entitles its article “Dubai debt woes 'a drama, but no crisis” and says the debt revelations from Dubai this week will not lead the global economy back into recession, but have seriously damaged the Emirate's standing as a leading financial hub.
The pessimism in the British media stems from the amount of money that British banks have been exposed to in the troubled Dubai World case , notably RBS, Barclays and HSBC.
The solution:
Abu Dhabi has promised to look at the Dubai World setback, and to offer a case by case solution, in efforts to assist its little brother Dubai in solving its problems. People tend to forget that Abu Dhabi and Dubai are both part of the same country, and if the reputation of Dubai is ruined, Abu Dhabi will also be affected.
Now is the time for the UAE private companies to step in and help the general Dubai atmosphere gaining confidence. A lot of opportunities still exist in the country, access to liquidity is still available and as “Banque Saudi Fransi - Credit Agricole Group” puts it “quality deterioration simply is not an issue in Saudi Arabia, Abu Dhabi and Qatar”
What companies in the private and public sectors should do is to continue on hiring, spending and investing, without shying off, and the Emirates will be back on track as if nothing happened.
Camil El Khoury
The Author is the Chief Vision Officer of ideas group www.ideasgrp.com
ideas Group is a global learning and human capital development firm specialized in leadership and team development. We help our clients become high performance organizations and foster a sustainable growth.
We strive to continue on partnering with our clients, finding solutions for their sustainable performance through services that include management consulting, generic courses for immediate impact, tailor-made workshops and transformational experiential learning experiences. Ideas group provide consultancy services and learning & development training to a number of Clients in the UK, UAE (Abu Dhabi, Dubai), Saudi Arabia, Qatar, Kuwait, Bahrain, Syria, Egypt, Iran, Morocco and Lebanon.
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