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Your View e-polls e-paper Subscription Weather RSS Feeds e-poll document.write(''); content = document.getElementById("pollcontainer").innerHTML; myReg=/Sorry/; myAr=myReg.exec(content); if (myAr == "Sorry") { // document.getElementById("pollcontainer").style.height="0"; document.getElementById("pollcontainer").style.display="none"; } document.write(''); For Dubai World and the nation’s infrastructure Last Updated: December 14. 2009 9:22PM UAE / December 14. 2009 5:22PM GMTWhen speaking about the sums exchanged in global markets, the relationship between Abu Dhabi and Dubai, or the UAE's pace of development, it is easy to succumb to hyperbole. In the past few weeks, many have. Since Dubai World's request for a standstill on its debts last month, uncertainty reigned as analysts and bankers grappled with how it would be resolved. A deep breath and a longer view are now in order.
Yesterday's news that Abu Dhabi will provide $10 billion to help Dubai World pay back a $3.5 billion sukuk – and to meet many of its other obligations – reassured investors from Tokyo to New York. Advances on both the Abu Dhabi and Dubai exchanges made clear that confidence in the UAE economy has also been buttressed. Dubai World has also reserved part of the $10bn to pay many of its contractors, which will have positive reverberations both locally and internationally.
Yesterday's pledge of $10bn has been just the latest instance since the global financial crisis began of how the country's liquidity has been used at the service of its parts. Still, $10bn will not save every plan for a new development; many that have gone under or put on hold may not return. This type of creative destruction is fundamental to any dynamic economy.Yesterday's announcement must be considered within the context of Dubai's and the nation's history. Since Sheikh Rashid Al Maktoum decided to dredge Dubai Creek and build a port at Jebel Ali, much of the UAE's strength has been tied to its infrastructure. Transport networks, harbours and airports have connected the UAE to the rest of the world.
document.write('');But with greater access to the world's capital, labour and intellect, the country also had greater access to its contagions. The global financial crisis that began last year spared few markets. What it has made clear in its wake – both here and throughout the world – is that infrastructure is more than bricks and mortar. Undergirding a nation's progress and its ties to the world are the strength of its laws and institutions. And yet, laws and institutions often mature at a different pace than the societies that are built upon them.
The nation's legal infrastructure may have also received a boost yesterday along with Dubai World's balance sheets – one that may be even more critical to the maturation of the country's economy. Creditors of Dubai World will have their claims settled in a special tribunal within the Dubai International Financial Centre (DIFC). Creditors can have confidence that any judgements on Dubai World will be enforced. The DIFC's judges have demonstrated expertise in a number of specialised fields and arbitration methods that can help to streamline the adjudication process.
While billion dollar sums make headlines, they can also make it easy to overlook that transparency and legal infrastructure are just as essential for a country's development. In the months and years ahead, this lesson must be remembered.
Send to friend Print For Dubai World and the nation’s infrastructure Last Updated: December 14. 2009 9:22PM UAE / December 14. 2009 5:22PM GMTWhen speaking about the sums exchanged in global markets, the relationship between Abu Dhabi and Dubai, or the UAE's pace of development, it is easy to succumb to hyperbole. In the past few weeks, many have. Since Dubai World's request for a standstill on its debts last month, uncertainty reigned as analysts and bankers grappled with how it would be resolved. A deep breath and a longer view are now in order.
Yesterday's news that Abu Dhabi will provide $10 billion to help Dubai World pay back a $3.5 billion sukuk – and to meet many of its other obligations – reassured investors from Tokyo to New York. Advances on both the Abu Dhabi and Dubai exchanges made clear that confidence in the UAE economy has also been buttressed. Dubai World has also reserved part of the $10bn to pay many of its contractors, which will have positive reverberations both locally and internationally.
Yesterday's pledge of $10bn has been just the latest instance since the global financial crisis began of how the country's liquidity has been used at the service of its parts. Still, $10bn will not save every plan for a new development; many that have gone under or put on hold may not return. This type of creative destruction is fundamental to any dynamic economy.Yesterday's announcement must be considered within the context of Dubai's and the nation's history. Since Sheikh Rashid Al Maktoum decided to dredge Dubai Creek and build a port at Jebel Ali, much of the UAE's strength has been tied to its infrastructure. Transport networks, harbours and airports have connected the UAE to the rest of the world.
document.write('');But with greater access to the world's capital, labour and intellect, the country also had greater access to its contagions. The global financial crisis that began last year spared few markets. What it has made clear in its wake – both here and throughout the world – is that infrastructure is more than bricks and mortar. Undergirding a nation's progress and its ties to the world are the strength of its laws and institutions. And yet, laws and institutions often mature at a different pace than the societies that are built upon them.
The nation's legal infrastructure may have also received a boost yesterday along with Dubai World's balance sheets – one that may be even more critical to the maturation of the country's economy. Creditors of Dubai World will have their claims settled in a special tribunal within the Dubai International Financial Centre (DIFC). Creditors can have confidence that any judgements on Dubai World will be enforced. The DIFC's judges have demonstrated expertise in a number of specialised fields and arbitration methods that can help to streamline the adjudication process.
While billion dollar sums make headlines, they can also make it easy to overlook that transparency and legal infrastructure are just as essential for a country's development. In the months and years ahead, this lesson must be remembered.
Send to friend Print Comments (2) var addthis_pub="noahkhan"; var addthis_brand = "The National"; var addthis_logo = "http://www.thenational.ae/images/the_national_logo.gif"; var addthis_logo_color = "3261A5"; Bookmark & Share function storeCaret(textEl) { if (textEl.createTextRange) textEl.caretPos = document.selection.createRange().duplicate(); } if ((document.all) && (navigator.userAgent.indexOf('Opera')== -1)) { IE = true; } else { IE = false; } function doSubmitMessage(aFormId,aUrl){ aForumForm = aFormId; aCreateUrl = aUrl+"&omniture=0"; aForumMessageUrl = ''; aAjaxDiv = document.getElementById("cpost"); processForum(aAjaxDiv); }Added: 12/15/09 11:26:00 AM
The Global "crisis", as you term it, was initiated through the early years of the noughties, as credit was dispensed by Banking Institutions with great, unrestricted largesse, resulting in "sub-prime" crisis in the summer of 2007.The Executives of Dubai were wooed by, and succumbed, to the same Institutions. Surely when those same Institutions knocked on the doors of the true Arabic and Asian SWF's, as winter dawned in 2007, the alarm bells should have been ringing?Now is the time to draw a very distinct line in the sand and have no reversion to the exuberance of the mid-noughties. Abu Dhabi has given Dubai this one opportunity to move forward, hopefully the wise and mature managers will execute this opportunity well.
Added: 12/15/09 09:24:00 AM
Transparency certainly is going to have to be more than just a watchword upon which economies of the future, including those of the Gulf countries, will have to be built. While this is something the Arab World has always considered almost taboo, cities like Dubai have managed till date to get by, indeed even do brilliantly well, and keep investments pouring in, by providing an illusion of transparency.....as the recent debacle of Dubai World has shown, such facades when put to the test, will fall on their faces, and simply show themselves up to be poor imitations of the icons of capitalism and a free market. Dubai and the UAE would do well to take pause, regroup, and plan on building an economy that is driven by more than just infrastructure or tourism projects - real economies are indubitably built on sound natural resources and a knowledge capital that cannot be displaced by good times or bad. Perhaps, as H. H. Shaikh Mohammed bin Rashid Al MAktoum, and before him the Founder President of the UAE, H. H. Shaikh Zayed Bin Sultan Al Nahyan had planned to do, it is imperative to think of building that knowledge base and economy first, and think of the tall buildings later.....human and natural resources have to be the foundations on which great empires are built.
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