Dubai Debt Problems - Someone Else's Fault

As per this article from The National

Dubai’s financial slowdown should be treated as a “special case” caused by the downturn in world trade and had nothing to do with the intrinsic productive capacity of the emirate’s economy, the UAE economic report says.

It seems the culprits were:

1. Banks and investors who didn't provide sufficiently long-dated capital to finance Dubai's real estate projects.
2. Foreign investors whose tremendous and apparently imprudent large capital inflows contributed to a form of the "Dutch" disease causing rampant inflation.
3. The global financial crisis.  Long time readers of this blog will appreciate our standing comment that this is a "global" and not a "Global" crisis.

Despite the short-sighted actions of these external parties, there are a few bright spots:

“The case of Dubai is ‘special’ also because very large investments have been made in its soft infrastructure, in both industry and government, which will have highly positive effects on the long-run development of the emirate,” the report says.

Besides being "special", and I trust you'll note the comparison here is Emirate-wide:

“But perhaps the biggest improvement in the overall productivity of the UAE in general, and specifically in Dubai, is the high efficiency of Dubai government agencies and departments which adopt first-best policies and international best practices …,” the report says.

 And

When these factors are recognised, it will position Dubai as one of the “most competitive cities in the long run”, the report concludes.

A hat tip to The National for helping to set the record straight.

New Dubai Government Media Office

Established as WAM notes "to enhance channels of communications with the local, Arab and international media community and mobilise resources and potentials necessary for conveying an accurate image of events going on in Dubai and delivering Dubai message via clear, objective AND affective style at bar with the highest international recognised professional standards and practices."

I suspect that's "effective style at par".

However, since journalists (particularly those impudent Western ones) are known  for frequenting bars, this could be quite a savvy strategy.  Chat them up in the bar, buy a few drinks.  Maybe a way that space at the top of the Burj Khalifah could be put to good use.  The Tip Top Tap.  And perhaps a Nady Al-Iftar.  (Apologies to the Allerton, though the TTT has been closed for many a year now).

Or maybe that's an English law reference as in "If you print something negative, we'll see you in court".   They say that some in Dubai see Singapore as their model.

Anyways, hopefully, the new office's press releases will be a bit more carefully crafted.  Or they'll provide WAM with better English translations.

Here at SAM we're filing this in multiple files as the tags indicate.

The two most important are:

1. "Лучше поздно чем никогда" Of the two this one is the most important.   One should learn from one's mistakes.  And it's never too later to start.  Especially in correcting one's mistakes in one's own blog!
   
2. Politically correct.  All the news "that's fit to print" fits the government line.  It is important to correct all that inaccurate press reportage out there.
   

Dubai Financial Market Provides Unrivaled Liquidity - Passes All Tests

Frankly, when I read this article in the Gulf News, I was more than a little dismayed.  It seems perhaps that not everyone has gotten the editor's memo yet.  I suppose one excuse is that this is a guest columnist .

Here's just one example of the unjustified negativism in this article:

"The most important thing to keep in mind at this time is that the market trend of both the Dubai Financial Market General Index (DFMGI) and Abu Dhabi Securities Exchange General Index (ADI) continues to be down. There is high risk of further declines both in the near and medium term."

Well, aware not only of the Gulf News editor's memo but possessed of a keen civic spirit, I've taken it upon myself to write the article as it should have been written.

Dubai Financial Market Provides Unrivaled Liquidity - Passes All Tests

Special to GulfNews:  Abu 'Arqala  December 28. 2009

"The most important thing to keep in mind at this time, particularly in the light of the unjustified negative campaign being waged against Dubai by the world press, is that the Dubai Financial Market  ("DFM") is thriving and reaching new pinnacles of success.

Under the wise political and financial leadership of the Emirate, the DFM has been providing unrivaled access to liquidity to investors wishing to rebalance their portfolios from equities to cash.  As part of this process, the DFM has repeatedly not only tested its lower support levels, but also in keeping with the spirit of Dubai has surpassed every test.  And thus broken through every barrier placed in its way.

At the present time we can expect this trend to continue, demonstrating yet again that the Emirate is motivated not only by a sound vision but excellence.  And while it may seem a bit self-centered, the DFM can truly claim to have set not only the tone but also the trading pattern for other regional markets as well.  This is after all Dubai - a model for the GCC.

As the Dubai market consolidates at these new levels, it is positioning itself for a renewed period of explosive growth."