Top developers optimistic about Dubai's economy

Dubai: Dubai's economy expected to recover from the downturn by 2012, a top businessman said on Monday.

At a business conference Monday morning, Shaikh Maktoum Hasher Maktoum Al Maktoum, CEO of Al Fajer Properties, expressed confidence that a recovery was near.

"It usually takes five or six years to recover from a downturn. Judging by this, I believe a recovery in Dubai should come by the end of 2012," he told a gathering of industry officials and media persons.

At the same conference, Abdul Majid Esmail Al Fahim, chairman of Dubai Pearl, also expressed confidence in Dubai's economy. "History shows every country has its ups and downs. Dubai is a classic example of how a state can build so much in such a short time."

While the international media was going berserk with the news of Dubai World's restructuring plans, Shaikh Maktoum chose to invest in the group saying his decision was based on its value proposition. He does not see a debt repayment restructure as a concern.

"These companies are facing challenges. They have huge amounts of debt and are thinking of the next step. I would try and see how I could pay my debtors in the most practical way possible. The sensible thing would be to restructure the debt. That's the best solution."

Shaikh Maktoum added: "America pays its debts over 10 to 20 years. For us the problem is maturity. Dubai World's debt is due in a short period of time."

Shaikh Maktoum said the international media's permanent spotlight on Dubai is counter-productive.

"When we were going up, the world couldn't have enough of us. During the downturn, we made a bigger splash than when the Lehman Brothers went down.

Knee-jerk reaction

"There is an oil company in Ukraine that has just restructured a couple of billions of dollars worth of debt but no one knows about it. The eyes are all on Dubai."

Contrary to international speculation, Shaikh Maktoum believes Dubai's geographical position will ensure its success in the future.

"If you look at the loc-ation of Dubai and the amount of wealth located within a four-hour flight from the city, you can see it's perfectly positioned geographically, with the infrastructure to support it. A lot of people operate their businesses from Dubai."

Al Fahim agreed, saying, "Dubai still offers many attractive economic business and social incentives."

In the near future, Shaikh Maktoum believes that Dubai has to focus on settling its debts and rebuilding its reputation; finishing a product is one of the most important aspects for investors.

"When our offices were nearing completion, their bidding price jumped by 30 per cent," he said.

Al Fahim shared the same sentiment, "Even though prices are down 50 per cent from their peak, the market will adjust, it has gone through this cycle several times. The situation is not unique to us. It's a global situation."