‘Dubai is Sound’
In a New York Times article (8 September 2009) entitled, ‘Dubai to Be More Careful in Wake of Crisis, Ruler Says,’ Sheikh Mohammed bin Rashid al-Maktoum said that “financial headwinds were easing on the cash-strapped state and that Dubai was sound.”
“I don't think we made any mistakes,” he told reporters at a briefing. “Our strategy will be really the same but things will change a little bit because of this crisis and we will be more careful now.”
The article reported the magnitude of Dubai’s debt saying the emirate and state-linked firms have outstanding debt of about $80 billion (48 billion pounds), much of it incurred during a drive that saw Dubai expand activities in logistics, financial services, real estate and luxury retail and tourism.
Dubai raised $10 billion in emergency cash from the UAE central bank early this year and plans to follow that with another $10 billion to fund obligations still pending.
Response to Personal Debt
A second New York Times article this week (11 September 2009) looks at the very different approach that the UAE takes toward personal debt.
The article by Robert F Worth entitled, ‘For a Bounced Check, the Penalty Can Be Years in Jail’, reports on the numbers [no tally has been given] of Dubai executives who have been arrested and charged for corruption and fraud.
Yet the chief interest of the article is the way that personal debt is being addressed:
“A rising number of businesspeople have been sent to jail for going into debt. Bouncing a check is a criminal offense here. That fact has begun raising questions about the fairness of Dubai’s laws, especially among the foreigners who make up about 90 percent of the population.”
Legal System Wanting
The article looks at the ‘overall uncertainty of Dubai’s legal system’ which has caused many expatriates to flee and claims that the risk of arrest for debt is driving away potential new investors and businesspeople at exactly the time when Dubai is struggling to rebuild business and investor confidence.
Robert Worth quotes analysts who claim that “Dubai’s legal structures [based on Shariah law] have not kept pace with its frenetic development….and are often found wanting.”
While many international journalists have contributed to negative and uninformed ‘Dubai-bashing,’ the most perceptive and prophetic articles continue to emerge from outside the Emirates, as UAE laws prohibit the criticism of the government and its leaders.
The high interest in UAE affairs, as evidenced by the number of articles in the New York Times and the Economist this week, suggests the importance of leaders and commentators in the Emirates tackling these issues and participating fully in this conversation.
‘Dubai to Be More Careful in Wake of Crisis, Ruler Says,’ New York Times, 8 September 2009.
Robert F Worth, ‘For a Bounced Check, the Penalty Can Be Years in Jail’, New York Times, 11 September 2009.
A Metro for the Emirates…All that Glistens, The Economist, 10 September 2009.
Other Stories and Sites
Look at the Progress on the America’s Cup Venue at RAK, America’s Cup in the UAE, 10 September 2009.
Fujairah for Blue Skies, Beaches and Diving, Fujairah in Focus, 11 September 2009.
Ted Kennedy’s Inspiring Last Letter to President Obama, SFS, 11 September 2009.
Dr Geoff Pound
Geoff can be contacted by email at geoffpound(at)gmail.com on Facebook and Twitter.
Image: “New York Times Keeps Close Eye on UAE.”
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