Under the patronage of Sheikh Nahayan bin Mubarak Al Nahayan, UAE Minister of Higher Education and Scientific Research, Dubai Chamber of Commerce & Industry in association with Georgetown University Washington DC, hosted an economic forum titled, ‘The Gulf Region in the Global Economic Crisis: Force for Stability’ at the Shangri-La Hotel in Dubai today (Sunday).
The Forum was inaugurated by Sheikh Nahayan bin Mubarak Al Nahayan, whose keynote speech was followed by presentations of panel of experts including Eng Hamad Buamim, Director General, Dubai Chamber, Henry Azzam, CEO Mena region, Deutsche Bank, Paul Bagatelas, Managing Director, Carlyle Group, Nabil Habayeb, President and CEO ME and Africa, General Electric, and Hamdi Osman Vice-President, Federal Express International.
The Forum came at the launch of a week-long field research as part of the Dubai Residency course involving consulting projects that the students of the Georgetown University Washington DC MBA are attending at leading Dubai-based companies.
Said Sheikh Nahayan, “Our national leaders, our Government agencies, our businesses and our universities are examining the questions related to the nature and size of this economic downturn. They are continually monitoring its effect on the sectors most affecting the UAE – finance, real estate and tourism and they want to know how long it will last, and what measures are needed to deal with its ramifications.”
Nahayan added: “Our search for opportunities in this economic situation to advance the UAE includes charting a future of economic diversification, reviewing our development and human resource policies and re-examining our national objective of dependence on foreign labour. We recognize that an economic recession creates opportunities and, in the UAE, we are determined to seize these opportunities in order to promote long-term prosperity, to encourage business development and to improve standards of living.”
Al Nahayan called upon the students to be leaders in promoting fresh thinking and designing and adopting new approaches as he said that the current economic situation highlights the work of colleges and universities as suppliers of ideas, talent and leadership. He said that a more prosperous future rests in the hands of the young people.
Buamim, who led the executive panel of prominent speakers, gave a presentation on Dubai and UAE Economies in light of the Global Economic Crisis, said the effects of world economic crisis was felt in the UAE in the first and second quarters of 2008 when the oil prices dropped to $40/b as there was a mismatch between lending and deposits due to re-evaluation of AED-USD peg while in Q4, after the failure of Lehman Brothers when the global inter-banking system was frozen which affected the local banking system.
According to Buamim, the crisis implications on the UAE economy created reduced demand for exports and tourism, consumption, investment and increased job losses indicating lower economic growth as his presentation outlined the crisis prone sectors of finance and stock markets, real estate and construction, trade (exports-reexports), and tourism and the less affected sectors of education and health services, consumer staple (food and beverages) Government and Utilities.
On UAE debt obligations and refinancing risks, Buamim’s said the public and private institutions have relied on external sources to finance their investment programs and development projects including infrastructure, services and real estate as UAE’s total FC debt stood at $211bn of which Dubai’s share was 57%.
Buamim said the policy responses from the UAE Government and Central Bank was quick and fast as they deployed AED 120bn (US$33bn) facility to address the banks’ liquidity needs including AED 70bn ($19bn) long-term deposits in the banks, AED 50bn ($14bn) Emergency Funding Facility and AED-USD Swap Facility to secure dollar liquidity needs. The Dubai Government issued project bonds worth $ 20 billion while the Abu Dhabi Government deposited AED 16bn ($4.4bn) in its banks.
On UAE Economic Outlook for 2009, the presentation indicated that the UAE is well positioned to survive the economic crisis with a real GDP growth of 2-4%. Buamim said the country will continue to record surpluses as fiscal surplus will support Government investment spending while the UAE inflation is expected to reduce from 14% in 2008 to 8-6% in 2009.
Henry Azzam, Deutsche Bank’s CEO in the Middle East and North Africa said, “Economic growth in the UAE will slow down this year, but Government support will ensure that the country does not slip into outright recession. The Government and the Central Bank have responded swiftly and strongly to provide liquidity, and have the resources to do more if necessary. They have put in place expansionary fiscal and monetary policy, and have been injecting equity into local banks and guaranteeing deposits.”
Added Azzam, “The $20 billion bond program issued by Dubai provided assurance to capital markets that the emirate will be able to meet its financing requirements this year.”
Nabil Habayeb, President & CEO, GE in the Middle East & Africa, highlighted GE’s role and presence in the Middle East. “Since the mid-1930s, GE has played an integral role in the region's development by providing advanced technology products and services necessary to further strengthen the region’s infrastructure and meet its energy and industrial needs. Continuous investments in localization and infrastructure development have helped position GE as a long terms partner for the region,” said Nabil Habayeb.
© 2009 Al Bawaba (www.albawaba.com)
