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Dubai’s economy to recover first in Mideast
Posted on 05/18/09
The Wall Street Journal
Dubai's Economy To Recover First In Mideast
May 15th, 2009
DEAD SEA, Jordan (Zawya Dow Jones)--Dubai will recover from the global financial crisis quicker than other economies in the Middle East because of its openness, according to the regional chief executive of Deutsche Bank AG (DB).
"Dubai will attract again foreign capital very fast," Deutsche's Henry Azzam told Zawya Dow Jones Friday on the sidelines of the World Economic Forum in Jordan. "Unlike other countries the stage in the United Arab Emirates is set ready for the recovery."
Dubai's economy has come under intense scrutiny since the scale of its $80 billion debt pile emerged and the global financial crisis hammered its once booming real estate industry, which did account for 30% of the emirate's economy.
In response, Dubai has borrowed $10 billion from the central bank of the U.A.E. to help meet the short-term liabilities of many of its government-related companies and set about restructuring with the help of investment bank Rothschild.
"Dubai is doing the right thing now," Azzam said. "They've realized their problems and now doing what's needed to survive the crisis." This may include selling assets.
Officials, with knowledge of the matter told Zawya Dow Jones last week that Deutsche Bank is advising government-owned Dubai World on a possible sale of part of its stake in DP World to private equity firm Abraaj Capital. Azzam declined to comment on the deal.
Dubai and its corporate entities have nearly $19 billion of debt coming due this year and next, according to EFG-Hermes.
"You can tell that the risk on Dubai is lower now," Azzam said.