Move a step in the right direction

Dubai: Dubai's plan to sell assets to the private sector is a move in the right direction that will boost creditors' confidence and add value for investors, say members of Dubai's business community.

"The move shows that Dubai is willing to re-pay its debts and that there is demand for Dubai's assets," said Hamdan Mohammad, President and Board Chairman of the Arab Business Club. The plan could boost creditors' confidence in Dubai's ability to repay its debts, he said.

"Based on what Shaikh Ahmad [Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and CEO of Emirates Airline and Group] has done for Emirates airline, he's definitely the right person to head the restructuring and to think about the long-term future for Dubai," said Vipen Sethi, CEO, Landmark Group.

Privatisation on the domestic front will mean better management when business is done in the open, he said. "Internationally, the confidence in Dubai has got to improve first before we see a lot of investment but the market is definitely turning," Sethi added.

Dubai has given a clear signal that it is taking action to address its debt problem, Mohammad said.

In the right direction

"Creditors are seeing that Dubai is very serious about paying its debts. Dubai gave a clear sign that they're not just talking about it, but they are doing something in a planned way," Mohammad added.

He added that Dubai is "working in the right direction" with its debt-restructuring plans. The announcement also showed Dubai's willingness to be transparent about its financial situation, he said.

"The press conference kept the people aware of the facts instead of hearing rumours. They're sending lots of clear messages that they're working on the debts issue, solving the problems, and inviting international businesses to work with them," Mohammad said.

The Emirati business community should not be sensitive to sales of private equity in Dubai's government-owned companies, he said. "There's lots of multi-billionaires in Dubai. If there's interest, they can buy equity and even get a preferred rate. If they have money and don't want to buy and [I am] not happy that it's being sold, then there's no meaning," he said.

SMEs will fuel investor interest in starting up new businesses, said Abdul Baset Al Janahi, CEO of MBRE for SME Development.

"Since the global financial crisis, the UAE government has been on top of it, especially Shaikh Ahmad.

"Dubai has a number of very good companies which will add value to the city's economy and to the people who are willing to invest. When it comes to SMEs which comprise around 95 per cent of the economy there is still a lot of business generated.

Local base

"Just today we had a Chinese delegation representing 110 factories in China who have opened a base in Dubai to attract local businesses. From the perspective of SMEs we still have people starting up new businesses," Al Janahi said.

This will add value to Dubai's companies and their investors, said J.R. Gang-aramani, President and Executive Chairman of the Al Fara'a Integrated Construction Group.

"It's great news if they open to the public as it will add value to the companies...

"The international community who have been in the UAE for so many years has confidence in Dubai and this announcement will add great value to Dubai as a community.

"Every month you know something is happening in the positive direction and Dubai is progressing towards recovery," he said.

Still, Dubai needs to learn from its mistakes to avoid repeating them, said Abdul Aziz Al Bannai, Chairman of Axiom Telecom.

"It's a good move. Dubai is already coming back and this will help give confidence to the people. Despite all the negative sentiment, 2010 has been more stable. We need this kind of movement and what is important is the trust of the people which is there.

"Dubai will remain a good choice for the investor and people are gaining confidence. We have to be careful now so as to not repeat this event in the future. We are going in the right direction," he said.