Dubai sets sights on enhancing core strengths

Dubai: Dubai has "successfully overcome" the challenges of the global econ-omic crisis, a senior government official said in Dubai yesterday.

"We have now set our sights on the future," Sami Dhaen Al Qamzi, Director-General of the Department of Economic Development, told participants at the World Economic Forum's Summit on the Global Agenda.

"The focus is now on developing our traditional businesses — such as retail and trade. We see that these are all doing well," Al Qamzi said. "We will retain our focus on developing the SME [small and medium-sized enterprises] sector, which we consider the backbone of our economy," he said.

"The choice of UAE and Dubai as the venue for this summit for the third consecutive year highlights the growing role that we are playing in the world in participating in the setting of the economic and political agendas."

Strategic reassessment

The fallout of the global financial crisis has prompted the Dubai Government to rethink its growth strategy and shift development focus to more traditional strengths.

According to a supplementary prospectus filed concerning a bond issue earlier this year, Dubai accepted the "significant impact" the global crisis has had on the emirate's economic plans and has begun the process of re-assessing the goals of the Dubai Strategic Plan 2015.

"Dubai's reassessment of targeted strategic sectors requires an integrated evaluation of global trends, local capabilities, and the domestic economic landscape," said Dr. Armen V. Papazian, financial economist and chief executive of Keipr, a boutique consultancy specialised in business analytics and intelligence.

"The choice must be based not just on past or existing strengths. Strengths can be built and developed. It is also crucial to assess the foreign exchange earning potential of the sectors, industries, and businesses that Dubai chooses to focus on," he told Gulf News.

In May, Dubai announced plans to set up a debt management office in line with similar steps being taken at the federal level.

The aggregate direct debt of the Dubai Government was Dh105.47 billion as of July 31, 2010, the bond prospectus shows.

Dubai can meet its fin-ancial obligations in the form of debt maturing next year and needs no further help from the UAE Central Bank, Ahmad Humaid Al Tayer, Governor of the Dubai International Financial Centre, said on Sunday.

The emirate is continuing to diversify its funding sources, restructuring its finances and working on selling partial stakes to the public in government-owned companies, according to Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of Dubai's Supreme Fiscal Committee.

Government-owned conglomerate Dubai World said it has successfully restructured $24.9 billion (Dh91.4 billion) of debt. Dubai Holding Commercial Operations Group has twice extended a $555 million revolving credit line.

Dubai International Capital is in the process of restructuring its own outstanding debt.

Risks: Joint approach needed

"A joint approach to problem-solving is very important; economies do not function in isolation," Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, told participants at the World Economic Forum's Summit on the Global Agenda in Dubai on Monday.

Al Mansouri said the UAE's experience in "establishing the pillars of the knowledge economy" can serve as an example for other nations.

The world's economies are facing "pressing challenges" that can be resolved only with "meaningful change", he added.

Klaus Schwab, founder and executive chairman of the World Economic Forum, added: "The challenges are inter-related. We want to create an ongoing mechanism to deal with global risks and opportunities. We want to learn from Dubai and the UAE to be forward-looking. In a world characterised by strong volatility, we have to create a strong risk-mitigation response."