Dubai can pay its debts, says Sheikh Mohammed
Sheikh Mohammed said the government is “not worried” about paying off Dubai’s debt, adding that the “UAE is strong.”
September 9, 2009 10:56 by Dana El Baltaji
Dubai can repay its Islamic bond debts worth $4.52 billion this year, says the emirate’s ruler Sheikh Mohammed Bin Rashid Al Maktoum.
“I assure you we are alright, the UAE is alright, and we are not worried,” Sheikh Mohammed said at his Zabeel palace in Dubai, when reporters asked if Dubai will meet its financial commitments this year.
The government is scheduled to pay off a $1 billion Islamic bond maturing in November, and government-owned developer Nakheel must repay a $3.52 billion Islamic bond in December.
The emirate established a $20 billion fund early 2009 to help government-owned companies with their debts. The UAE’s central bank bought half of the bonds in February, and raised $10 billion to help Dubai’s economy. Nakheel reportedly received government help, but the developer did not disclose how much.
Dubai revealed it borrowed $80 billion to help pay for its developed; however Egypt-based investment bank EFG-Hermes claims the debt is closer to $84.7 billion, possibly higher. Dubai World alone owes $60 billion.
Nakheel was forced to reveal Dubai World’s debt in August as part of its obligations on the Islamic bonds.
As for the emirate’s future development plans, Sheikh Mohammed said: “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.”
“I don’t think we made any mistakes,” he added. “The crisis came for everyone, not just Dubai. People had to fight.”
“The UAE is strong; it is like a plane facing headwinds. Now the headwinds are slowing down, so the plane will reach its destination more quickly.”