Recently, Sheikh Mohammed Bin Rashid Al Maktoum, the ruler of Dubai engaged journalists in a question and answer session online. The transcript is available from the new website of the PM (he is also PM of the UAE) here.
I decided to write something here this event after reading a Straits Times report of it.
I am sure Dubai will survive this financial crisis but at heavy personal costs to the many foreigners working here. There will be huge invisible costs too. They cannot be easily spotted: For emiratis eyes and years only. In many instances, only for the emirati elite.
Since I returned after a two week break in Singapore, the traffic has become even lighter. The five abandoned cars at the bottom of the office tower have been removed. It will take a while to see which ones (if any) would accumulate dust and thus shout that their owners have ran away.
The most important word in Dubai also begins with a big "D" - Debt. The emirate owes USD 80 billion, but that is not the most meaningful number. What is crucial are the maturities of these obligations. About USD 12 billion would have to be paid this year or be rolled over.
The other worry is the risk of further impairment to their assets which could effectively raise their debt burden. The elites here think the worst is over and this give them the confidence to speak publicly and louder. I think the worst is still ahead of us. Just look at America and the woes of Dubai's customers and investors.
Sheikh Mohammad is wrong to think that the foreign media wants to help do in Dubai on the way down. Imagine that Dubai had gone up rather than down. The media would have sung its praises to high heavens.
The media like debt is a good servant but a bad master. Dubai was courageous or some think reckless to ride on tigers. Nevertheless I think they will live to fight another day. May be at that time it would be impossible to distinguish between Dubai and Abu Dhabi. You will have to come live here to know such things, and not make the silly mistake like SIA CEO Chew Choon Seng suggesting that Emirates Airlines enjoyed subsidised jet fuel. Filling up my first full tank of petrol back in September, I already know that petrol sales here is profitable to the government. It is even more profitable for the Singapore government! Now should I discuss DEWA versus Singapore Power? What is the secret of Singapore's budgetary surpluses?
No comments:
Post a Comment