There is "considerable upside to the current downside"; Gulf economies well positioned when the cycle moves upwards again, he says
David Eldon, the Chairman of the Dubai International Financial Centre Authority (DIFC Authority) today called on business leaders to separate reality from the perception of the impact of the economic crisis, which would lead them to realise that Gulf economies are well positioned to take advantage of opportunities that will emerge when the economic cycle turns.
Delivering the opening address at the DIFC Conference, the third business event that formed part of DIFC Week, the DIFC's prestigious annual series of business conferences, Eldon said: "Perceptions do not always equate to reality. Indeed if you take time to look closely, you will realise that the economies of the Gulf are by and large sound. And therefore well positioned for when the cycle moves upwards again."
However he pointed out that any hopes of economic immunity and decoupling are "consigned to the fantasy file." "All economies," he said, "are being affected by the global downturn, including Dubai."
Eldon said that Dubai has underlying strengths that remain intact despite the current economic environment, which he identified as an excellent infrastructure, a well regulated financial sector, an inherent openness to people, companies and capital from elsewhere and solid macroeconomic fundamentals.
He asserted that the perception in the western media that Dubai lacks the "financial muscle to cover its debt" is misinformed. "The reality is that Dubai is not built just on credit. Dubai's growth in the past has been largely equity-financed rather than debt-financed," he said.
Eldon stressed that it is important to distinguish sovereign debt from corporate debt.
"The reality is that Dubai's debt is also very different from the indebtedness seen in markets like the United States. Debt there has gone to finance deficit spending and increased consumption. Debt here has been largely channeled into financing infrastructure and public utilities - investments that will be self re-paying, investments that increase productive capacity and enhance productivity growth," he pointed out.
Another big reality in the global economy is that capital flows will increasingly be channeled directly between emerging markets, Eldon said." Indeed, the perception of some is that the current economic turmoil could accelerate the shift from West to East and from West to Middle East. The reality is they may be right. Only time will tell," he said.
The one-day DIFC Conference titled 'The Inside Track on Dubai' was held to highlight the "upside of the downside" of doing business in the UAE and was divided into commercial and legal/regulatory sessions that included panel and teaching discussions. Furthermore, it featured exhibitions by service providers from DIFC and Dubai's broader business community.
DIFC Week is proud to be supported by its Platinum Sponsors including Deutsche Bank and Abraaj Capital, and Sponsors who include Itau Securities and Goldman Sachs. In addition, the DIFC Week Conference is sponsored by Alvarez & Marsal, Conyers, Dill & Pearman, Emirates NBD, Grant Thornton, HAYS, International Compliance Training (ICT) Middle East, Kershaw Leonard, Latham and Watkins, M: Communications, Norton Rose and Union Properties while the DIFC Week Gala Networking Reception is sponsored by Sungard. The DIFC Summit is run in association with the Tharawat Family Business Forum.
DIFC Week is also grateful for the active support and involvement of its Knowledge Partners who include Al Tamimi & Company, British Business Group, DIFC Centre of Excellence, Oxford Analytica, Simmons & Simmons, Young Arab Leaders, and DNM connect; its Media Partners which are, AME Info, Arabian Business,, Al Arabiya News Channel, CNBC, Dow Jones, Dubai Eye, Financial News, The Times, The Sunday Times, SAB Media, The Wall Street Journal, Oxford Business Group and Zawya; as well as DIFC Week's Joint Marketing Partner, Dubai Corporate Counsel Group..
In addition, DIFC Week also expresses its gratitude to Itau Securities, the Sponsors of the DIFC Week Golf Championships.
- Ends -
About DIFC
The Dubai International Financial Centre (DIFC) is an onshore hub for global finance. It bridges the time gap between the financial centres of Hong Kong and London and services a region with the largest untapped emerging market for financial services. Since November 2004, over 650 firms have registered at DIFC. They operate in an open environment complemented with world-class regulations and standards. DIFC offers its member institutions incentives such as 100 per cent foreign ownership, zero tax on income and profits and no restrictions on foreign exchange. In addition, their business benefits from modern infrastructure, operational support and business continuity facilities of uncompromisingly high standards. In March 2008, the City of London's Global Financial Centres Index (GFCI) ranked Dubai as the region's fastest growing financial hub. For more information please visit www.difc.ae.
About Deutsche Bank:
Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 78,275 employees in 76 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people. Deutsche Bank's commitment in the MENA region is more than a century old, beginning with the Bank's financing of the construction of the Baghdad railway. Deutsche Bank opened its first office in Cairo in 1959, followed in the early seventies by an office in Bahrain. In 1999, Deutsche Bank embarked on a regional expansion drive across the GCC which began with the opening of an office in the UAE's Capital Abu Dhabi in 1999, followed by two offices in Dubai: a representative office inaugurated in 2001 and a branch at the Dubai International Financial Centre (DIFC) in 2005. In April of 2006, Deutsche Bank opened a branch in the Kingdom of Saudi Arabia, in the capital Riyadh. Most recently in November of 2007, Deutsche Bank opened its branch in the Qatar Financial Centre in Doha. Deutsche Bank AG in the MENA region offers the full range of investment banking, asset management; private wealth management; and global transaction banking services. Deutsche Bank's AG is well recognized for its leading role on some of the most prestigious regional transactions. The Bank is the recipient of several awards for its activities in Islamic Finance; and was proclaimed in 2007 as the Best M&A Bank in Middle East & North Africa by Global Finance World. For more information please visit www.db.com.
About Abraaj Capital:
Based in Dubai, Abraaj Capital is the premier investment firm specialising in private equity investment in the Middle East, North Africa and South Asia (MENASA) region. The management team has brought together some of the most compelling and successful transactions in the history of leveraged acquisitions across the region. With US$5 billion of assets currently under management, Abraaj has pioneered institutionalizing private equity practice in the region and is setting trends and benchmarks for others to follow. Winner of industry awards including 'Middle Eastern Private Equity Firm of the Year' from Private Equity International (2005, 2006 & 2007), the Banker Middle East Award for 'Best Private Equity House' in 2006 and for 'Outstanding Contribution to Financial Services' in 2007 and 'Best Private Equity House' at the World Private Equity Awards, MENA in 2007. Arabian Business recognized Abraaj among the 50 Most Admired Companies in the GCC in 2007. Abraaj is also the first pure private equity firm to be registered by the Dubai Financial Services Authority to operate out of the Dubai International Financial Centre. Apart from managing its five private equity funds, Abraaj Capital Holdings Limited (ACHL) itself is extremely well capitalized, with an issued share capital of US$1 billion. Its 135 professionals come from 27 nationalities and achieve a coverage that spans the MENASA region. For more information please visit www.abraaj.com
About Tharawat Family Business Forum:
The Tharawat Family Business Forum is a network of family-owned enterprises in the Arab World. The organisation provides a platform for the exchange of ideas and experiences on business and management issues related to family businesses in the Arab world. Tharawat's vision is to become the first-choice networking and mutual-assistance forum for family businesses in the Arab world. Through its network of members, Tharawat aims to encourage collaboration and alliances among family-owned and controlled firms in the region. It provides its members specialised education and helps them leverage business opportunities in the region and beyond. The forum seeks to bring a new focus on the business, social and cultural challenges facing family firms in the region. It promotes and sponsors research that helps advance the sustainable development of family businesses. It also works to raise public awareness of new developments within the family business sector. The Tharawat Family Business Forum has a governance structure designed to guarantee the transparency of its activities and its receptivity to high-quality inputs from both members and external experts. The members of Tharawat constitute an innovative and committed community of family-owned businesses, working together to improve collaboration, business growth, and prosperity. For more information please visit (http://www.tharawat.org )
For more information, please contact:
Amira Abdulla
Dubai International Financial Centre
Tel: +971 4 362 2433
e-mail: amira.abdulla@difc.ae
Iman Ahmad
Dubai International Financial Centre
Tel: +971 4 362 2685
e-mail: iman.ahmad@difc.ae
Alex Blake-Milton/Azadeh Varzi/John Rothera
Brunswick
Tel: +971 4 365 8260
e-mail: DIFCWEEK@brunswickgroup.com
© Press Release 2008
