Dubai is ready to move forward

Clarity has returned to Dubai with the announcement of the new $10 billion (Dh36.7 billion) support for the Dubai Financial Support Fund, a deadline of April by when the affairs of Dubai World's troubled subsidiaries need to be sorted out, the clear empowerment of a restructuring officer to manage the process, and a more general sense that a plan is now in place to handle the debts and enable Dubai to move on.

The worrying sense of drift that allowed ill-informed speculation to flourish has gone. It has been made abundantly transparent that Dubai's Supreme Fiscal Committee, chaired by Shaikh Ahmad Bin Saeed Al Maktoum, backed by the most senior financial and administrative officials of Dubai's government, are getting on with the business of moving the $25 billion to where it will do the most good to handle the debts and kick-start the economy.

Dubai's business community has commented favourably on the focus on paying Nahkeel's creditors in Dubai. Sorting out their unpaid bills is a very important part of putting the economy of Dubai back on track, since a vital part of getting liquidity back into the market is for the billions arriving in Dubai to move through the system. Nothing will restore business confidence more quickly than getting the bills paid.

That is why it was a refreshing change to see a clear commitment in this week's announcement of new fin-ancial support that "in addition, the Government of Dubai is particularly focused on addressing the concerns of Dubai World creditors within the Emirate of Dubai ... Discussions with affected contractors will begin in short order."

It is also very important to note how the style of announcement was also a major boost to general confidence. The clear language and readiness to answer further questions allowed the media to work with the government officials to get the message out about exactly what was happening. This is very different from the struggle to work with limited facts after the very brief statement on November 25, which only said that Dubai World would seek a "debt standstill" without any more information or detail.

The unfortunate lack of information meant that the media in the UAE and around the world had little to work with. They could either wait for more facts to emerge or offer some analysis of what was going on, but in many cases the international hunger for more analysis led the journalists and editors to slip into speculation, which at its worst was ill-informed gossip.

One particularly poor example was published in The Times of London, which on November 30 published what purported to be an opinion piece headed ‘Enough glitzy debt: time for regime change', and stated as though it was a serious option that "though undeclared, the hope is that these events will force the leadership of Dubai to resign."

The writer, Jo Tatchell, had recently published a book based on her memories of her childhood in Abu Dhabi, which is a nice enough read, but not the basis for an understanding of what has been going on at a political and financial level in the UAE over the past year.

Tatchell then continued with a confident-sounding statement that "the strategy is simple. Abu Dhabi will cherry-pick the successful big-name assets and transfer them to Abu Dhabi control. These deals have been under discussion for some months."

Quite the opposite

In the event, what happened this week was exactly the opposite of what Tatchell and The Times were suggesting. The strong working relationship between Abu Dhabi and Dubai has been made very clear, and the financial support has been granted with no demands for equity in specific projects. The money is a financial deal, and an integral part of the support is that the bonds and the funding will be repaid to Abu Dhabi at the agreed time, with interest.

It is important to stick to facts: President His Highness Shaikh Khalifa Bin Zayed Al Nahyan has been explicit in his support for Dubai as an integral part of the UAE, and for the leadership in Dubai. He could not have been clearer than when he toured Dubai at the height of the crisis earlier this year, and commended the "wise vision of Shaikh Mohammad", which he said was complementing the strategy of the leadership and government of the UAE.

"Shaikh Mohammad's vision is part and parcel of the government's comprehensive strategy, which as a leadership is striving to maximise its elements to improve living conditions of the citizen, education standards and provide all factors of stability and strength to our citizens," he said.

Looking ahead, Dubai has to rebuild its reputation after the battering it has received from the wild speculation over the past weeks. This may take some time, but the economic confidence generated from the underlying core business of Dubai as the region's commercial and service hub will see the emirate through the recession and back to prosperity.