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RAK to avoid Dubai debt trap
Plan to repay debt and then bring in partners, says official.
June 16, 2010 4:21 by Samuel Potter
Ras Al Khaimah wants to avoid the financial problems seen in fellow sheikdom Dubai by paying off its debt, reports Zawya.com.
“We’d like to reduce this structural debt and then bring in partners,” Jim Stewart, chief executive of the Ras Al Khaimah government’s Investment and Development Office told Zawya. RAK has around $1.36 billion of debt after funding a development splurge with Islamic bonds.
Investors will share equity in some of the emirate’s 16 government-related companies – which could also sell shares to the public in a few years – or help develop its major projects, Stewart said.
The fourth-largest member of the UAE and the last sheikdom to join the federation wants to reduce its modest debts after watching Dubai allow borrowing to get out of control.
RAK has struggled to attract investment on the same scale as bigger emirates like Dubai and Abu Dhabi, but has built up raw materials and mining industries, says the website. It’s also making a foray into real estate and tourism by building resorts and an amusement park along its Persian Gulf coastline.
“We built up this emirate on a needs-basis,” added Stewart. “We haven’t just gone out and built things. Most of the work we’re doing is an expansion of our assets.”