Opinion | Editorials
Restructuring will make Dubai stronger
If the creditors accept the proposals everything should proceed smoothly
- Gulf News
- Published: 00:00 March 26, 2010
- Image Credit: AFP
- The government support in reshaping both Dubai World and Nakheel will ensure a gradual recovery of both conglomerates, which have collectively been contributing to Dubai's growth.
The collective announcements made by the Dubai Government, Dubai World and Nakheel in restructuring Dubai World's $23.5 billion (Dh86.4 billion) debt is one of the best solutions put forward by their officials and will go a long way to restoring confidence in the emirate's ability to come back in the market very strongly.
The proposals put forward for Dubai World's creditors of a 100 per cent payment in five to eight years is probably the best option, in which the creditors will not have to consider a direct haircut.
The proposal might have been a surprise to many who have been talking about a possible 40 to 50 per cent haircut. That is not the case. The government has agreed to pay creditors 100 per cent. The issue now could be the timeframe — eight years.
The Dubai Government also acted very responsibly by agreeing to pump in $9.5 billion (Dh34.9 billion) to support the plan over the specified period. The government support in reshaping both Dubai World and Nakheel will ensure a gradual recovery of both conglomerates, which have collectively been contributing to Dubai's growth.
The proposal by the government also gives creditors enough time to reassess their position and come up with a fair response in settling this by May this year.
In an economic downturn all parties involved in wealth creation come under financial stress, some more than others. At the end of the day, what matters is how smartly one comes out of the situation.
Related Links
The roadmap laid out by the Dubai Government last December is a clear and transparent one. Yesterday's debt restructuring is part of the plan put forward to the creditors — giving them ample time to go through and strike a deal. There are no hidden surprises.
If the creditors accept the proposal, Dubai will emerge much stronger than many other economies.
Comments (1)
|
More from Editorials
More from Opinions
Opinion Editor's choice
-
No political roadmap for Afghanistan
By Rahimullah Yusufzai, Special to Gulf News
Weak Karzai government does not want Nato to abandon country even after combat troops pull out
-
US campaign to end Israeli occupation
By As’ad Abdul Rahman, Special to Gulf News
It is bound to evoke painful memories of the sordid history in America of the Ku Klux Klan
-
Egypt revolution is far from finished
By Jack Shenker
The Islamist/secularist divide gets all the attention, but it’s also only one faultline among many
Your turn
