UAE prepares steps to boost confidence

Dubai: Greater transparency and better financial regulations will help overcome the current lack of confidence hurting investor sentiment in the UAE, the government said.

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, urged a group of international business leaders and financial experts at the World Economic Forum to employ their expertise and fight malpractices of some financial and banking corporations and come up with a common approach to contain the current financial crunch and protect the world financial order and interests of the public.

"I am completely conscious of what is happening in the Middle East [as a result of] conflicts and rows which weigh negatively on the future of sustainable development," he told the officials.

Sultan Bin Saeed Al Mansouri, Minister of Economy, said in Abu Dhabi a new law on banking credit will soon be introduced in the UAE, and the government has finalised a new draft of the company law, which he expected to be introduced by next year.

He said 2009 is going to be a "testing year" for the UAE as far as the economy is concerned, just as it will be for some of the major world econ-omies, referring to the impact of the global credit crunch.

"I'll not make any forecasts on the GDP until the end of 2008. We have to evaluate all the different economic sectors we have," Al Mansouri said.

On the global credit crunch, Al Mansouri said there are lessons to be learnt from it. However, he added that the economies of the GCC, including that of the UAE, are still strong and protected.

Sultan Bin Nasser Al Suwaidi, Governor of the UAE Central Bank, said at a meeting in Fujairah: "The slowdown will be imposed on us ... in everything we will see contractions. But I think we will still be growing in all directions in a very comfortable way."

His comments echoed those of Mohammad Ali Al Abbar, chairman of Emaar Properties, who said the growth in the emirate's real estate sector could slow to 9 per cent from 13 per cent due to the global downturn.

He said the government would "revisit their development pipeline to ensure that demand remains robust".

The comments came on the same day as Eisa Mohammad Al Suwaidi, chairman of Abu Dhabi Commercial Bank, moved to assure customers the financial institution has not been affected by the global crisis.

"The bank benefited from the liquidity pumped by the Ministry of Finance [MoF] and the Central Bank to provide necessary cash to enhance credit and finance loans to government and private sectors and individuals," Al Suwaidi said in a statement to WAM.

The developments come at the backdrop of a continued market slump. Dubai Financial Market index declined by 4 per cent while Abu Dhabi Exchange lost 1.9 per cent on panic selling.

- With inputs from WAM and Reuters