Get your own house in order

By Administrator |

As some sectors of the international media have seemingly stopped writing about the supposed 'demise' of Dubai as quickly as they seized upon it last week, it is amazing that a country dealing with $59bn-worth

of debt at Dubai World and $84bn in total should even register on the international debt Richter scale – considering that the UK national debt now stands at ?800bn and US debt is now ranked at more than $12-trillion.

While Dubai has its problems, the seeming arrogance of some quarters of the media and financial sectors in both the UK and the US to seemingly hand out comment and advice to Dubai does defy belief.

Dubai's debt problems are serious, but they are hardly life-threatening and the fact is that the UK is currently seen as far more likely to default on its sovereign debt in future than Germany, France and the US. In fact, given the extent of the hidden debt mountains run up by US and UK financial institutions that shocked the world when they were revealed last year, the prospect of the UK going 'technically bust' is not so ridiculous.

In fact, if the UK and US were PLCs then the plug would have been pulled long ago.

So it seems just 'a bit rich' that in a world where financial panic has reigned over the last year and banks in the US and the UK have been effectively nationalised to keep them going, some of the very same people who brought down the whole deck of cards are still arrogantly pontificating about what others should be doing.

Having said this, there is no doubt that life is tougher in Dubai today, but this is still a thriving country and most countries would die for its continuing 5% annual growth rate.

That Dubai will come back to somewhere near its former 10%-14% annual growth rates seen in the past seems highly likely and while it may take time, the country might be excused for retaining less than fond memories of those 'experts' who handed out such 'sage advice' from their own bunkers – while surrounded by the ruins of their own economies.

The fact is that the resilience of the country and its ability to bounce back from adversity was there for all to see in terms of its visitor arrivals this year, where the Middle East – and principally Dubai and Abu Dhabi within the UAE – has been the only region in the world to show any growth this year.

At the same time, the national airlines and airports at Dubai and Abu Dhabi are carrying record numbers of passengers and Dubai Duty Free looks set to beat its $1.1bn sales record last year by 4% to 5%. In fact, Dubai International Airport, Dubai Duty Free and many other operations in the region have never had such good facilities from which to trade – considering their investments – or the passenger numbers to match.

All of which was very evident at the recent Middle East Duty Free Conference (MEDFA) in Dubai which was held just ahead of the news related to the debt problems that subsequently surfaced in Dubai.

Following this event, MEDFA President Anthony Chalhoub put Dubai's current predicament into proper perspective when he said: ‘It has to be said that the aviation and travel industry within the Middle East has shown strong resilience throughout the current global downturn. In my view it is unlikely that the travel retail industry will be affected by this latest development long term, given all the other positive investments being undertaken, as we have all just witnessed during the MEDFA Conference this year.’

The fact that this event was attended by 409 delegates – a hugely impressive number considering the financial pressures on all companies – might just bear that out.

Having said all of this, there is one area which will hopefully remain relatively untouched within Dubai World's debt restructuring and that is P&O. The P&O Ferries' operation on the English Channel – owned by Dubai World – has made major strides forward in the last two years, both in terms of infrastructure, service and its travel retail offer.


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