14 December, 2009

Abu Dhabi to the rescue

"The Government of Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World.

As a first action for the new fund, the Government of Dubai has authorized $4.1 billion to be used to pay the sukuk obligations that are due today."

That's from a WAM report, which you can read in full here.


Anonymous said...

I hope dubai learns from this experience.

This is a government and not a company... this type of risk should never be taken.
flooding our emirate with freehold properties will not create a sustainable economy.
Dubailand and a single palm island would have been enough

we need more projects like the internet/media city that create high paying jobs and is a good source of government revenue. also their effects on the environment are minimal and are not source of strain to the city's infrastructure.

Anonymous said...

Brother, can you spare a dime?

Will EK now merge with Etihad?

BuJ said...

Good news. Transparent too!

Anonymous said...

Some visionary.

Anonymous said...

@ anon 15:33

we are considering the merger. Will keep you posted in due course of time.

Anonymous said...

Two possible scenarios to sum up this whole debacle:

Scenario 1:

Dubai Ruler dispatches deputies to Abu-Dhabi to seek financial assistance. Deputies come back empty handed. Dubai Ruler takes it upon himself and seeks an audience with Abu-Dhabi Ruler. Abu-Dhabi Ruler obliges the old Arabian way with no strings attached.

Scenario 2:

Dubai ruler dispatches deputies to Abu-Dhabi to seek financial assistance. Deputies come back empty handed. Dubai Ruler formally announces to the world of a possible default. Maybe threatens dire consequences, including but not limited to backing off or breaking away from the Union. Abu-Dhabi Ruler appoints an interim group of advisers to brainstorm a solution, as stakes are too high, maybe even a reversal of the nuclear deal unless the UAE is secured; hook, line, and sinker. Abu-Dhabi Ruler meets with Dubai Ruler, pleasantries exchanged, presents a list of prized trophies, agree, press release.

And we all breath a sigh of relief.

For now!

P.S.: Scenario 1 never took place. Had it taken place, then we would have never known the dark side of Dubai, Inc.' predicament.

rosh said...

"flooding our emirate with freehold properties"

Anon, it wasn't just flooding 'freehold' properties! There was / is little freedom or 'hold' on homeownership. Homes built and sold sans the basic guidelines, rules or laws of homeownership, mortgages or credit worthiness. In some ways it is stunning banks loaned billions on poor due diligence, if any?

That said, yes, a wake up call. What the UAE could do for starters is to start looking within and reduce the silly appeasement process / reliance on certain external elements and more importantly, accept the fact, transparency to a large extent is a positive thing! Only when the powers and the thought processes of people collectively change to value what the country truly has to offer from within shall things change.

Seabee said...

Anon@13.01 I agree. I said something similar on one of my postings about it, huge egos got into more and more ridiculous projects and they lost the plot. Dubai has always been about trading, dealing, doing business. Add the new tourism industry and that's what they should have concentrated on.

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