DUBAI, Nov. 24 – Senior officials and leading business leaders said today that the fundamentals of the economy of the United Arab Emirates were healthy, and that the federation was taking steps to ensure that it would be able to deal adequately with the financial turmoil roiling the global community.

Those steps include improving the liquidity situation of key real-estate companies in which governmental institutions have a stake, and of locally owned banks. Better governance of these institutions has also been underscored in the efforts of emirates such as Dubai, one of the seven sheikhdoms that constitute the UAE.

Officials told scores of delegates from 75 countries at the annual forum – organized by the Dubai International Financial Center on November 24 and 25 – that, in addition to the above steps, the UAE is emphasizing transparency in policy making and implementation. Delegates are discussing critical issues such as the impact of the global financial crisis on the region, the next generation of Islamic finance, emerging markets, and energy geopolitics in an era of structural change.

In a keynote address this morning, Mohammed Alabbar, chairman of the Dubai Government’s Advisory Council – which was established recently by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Dubai Ruler, to manage the impact of the global financial crisis in Dubai -- assured delegates that, contrary to media speculation, the government was fully capable of fulfilling its debt obligations. Mr. Alabbar is also chairman and chief executive officer of Emaar Properties, one of the largest real-estate developers in the world.

"There has been a lot of talk about the debt obligations of Dubai. There is confusion and therefore concern about how much Dubai owes, and how this debt will be refinanced. Let us put an end to that speculation,” Mr. Alabbar said.



Although there have been varying estimates published internationally of Dubai’s sovereign debt and of the value of its assets, Mr. Alabbar said that the Dubai government's sovereign debt obligations current stood at the equivalent of $10 billion. He said that key sovereign assets were worth more than $ 90 billion, not including the value of airports, bridges and the Metro.



He said that the total debt obligations of affiliated companies were $70 billion, compared with assets valued at $260 billion. The total value of the assets of the government and affiliate companies in Dubai was roughly $334 billion, Mr. Alabbar said.

"The Government can and will meet all its debt obligations going forward. Let there be no doubt about this fact," he said, noting that much of Dubai's borrowing has been used to finance Dubai's long-term, risk-free infrastructure development.

That assertion seemed to resonate well with the audience.  

“We needed to hear this,” said Ganpat Singhvi, CEO of Nasser Holdings, which is based in Abu Dhabi. He underscored that most state-owned entities in the UAE had positive cash flows and, echoing Mr. Alabbar’s assertion, said that these enterprises also enjoyed strong long-term value.

Another assertion that seemed reassuring to delegates was Mr. Alabbar’s commitment that the Dubai government would assist affiliated real-estate companies “if and when the need arises.” Dubai’s three largest developers control about 70 percent of the supply.

Mr. Alabbar also dealt with an issue that was clearly on the minds of delegates, who’d gathered at the Jumeirah Emirates Towers Hotel – the current drop in property values.

"Today, the real estate sector is witnessing a healthy correction. This is a consequence of global financial conditions -- and is inherent to the very nature of the market. As we all know, real estate is cyclical. Monitoring supply and sales, the Advisory Council is managing this important sector of our economy, ensuring that new supply is properly managed and that current and future demand is adequately met,” Mr. Alabbar said.

How Dubai deals with the current global financial crisis will continue to be debated at the forum. Maria Bartiromo, the star anchor of CNBC – and one of the world’s most influential television journalists – will moderate a panel tomorrow on “Getting Confidence Back.”

But as one senior corporate executive said today, “Dubai’s confidence has never gone away. It’s going to do just fine.”