My column today makes a case for the Dubai Financial Support Fund's decision to bring Nakheel's bondholders to the table. If Nakheel's business developing property is no longer as bright as it was before the crisis struck, and recent evidence suggests that it isn't, what sense does it make for the DFSF to bail out Dubai World and let Nakheel pay off its creditors at par?
The director general of Dubai's Department of Finance, Abdulrahman al Saleh, has been struggling to explain the Government's position, making more media appearances in the last week than in the entire six months since he took over from Nasser al Shaikh. Today he conceded that Dubai has a public relations issue. "Let me admit, in Dubai we are not good in publicising what we are doing as much as we are in doing it," he said in a speech Thursday.
So, just what are they doing? The decision to restructure debts at some of Dubai World's weakest units essentially puts an end to what essentially amounted to an Abu Dhabi put, the ability to borrow, lend and invest in the UAE in the faith that, no matter what happens or how badly those investments might go, Abu Dhabi's oil revenues were on tap to bail everyone out.
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