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Get that money flowing
UAE banks may be getting government help to boost lending in the Emirates, says Dubai World chairman, Sultan Ahmed bin Sulayem
February 19, 2009 12:10 by Dana El Baltaji
The UAE federal government is planning a stimulus plan to help banks to kick-start lending, reports Bloomberg. The stimulus plan may help boost the country’s ailing property sector, which has suffered considerable losses due to the credit crisis.
“If we want the banks to lend again to real estate, then obviously governments will have to put a plan,” Sultan Ahmed bin Sulayem, chairman of Dubai World and member of the Advisory Committee created by the Dubai government to offset the effects of the financial crisis, said to Bloomberg yesterday.
In Dubai, real estate prices have dropped 25 percent since the market’s peak in September; in Abu Dhabi, prices fell by 20 percent, according to a report by Morgan Stanley.
With bank lending at a standstill, Dubai World has had to lay-off staff and to reassess its future projects, Sulayem said. Dubai World owns DP World, Istithmar World, Nakheel PJSC, among others.
“This mess globally, is so big, only governments can tackle it in my opinion, because they have to restore confidence,” he said.
On February 17, The National reported Standard Chartered Bank’s recommendation of a AED110 billion injection into the banking system to help banks resume lending. “First, the government must increase its expenditure substantially, and second, it needs to address the liquidity issue,” Marios Maratheftis, the regional head of research at the bank said at the time.
Maratheftis stressed that the nation is strong financially, but needs to implement stimulus plans to help boost the UAE’s economy.