UAE President backs Dubai

UAE Backs Dubai

The President of the UAE has taken steps to calm the storm after markets fell once again after the announcement of Dubai's debt crisis.

Sheikh Khalifa bin Zayed al-Nahayan was eager to reassure investors that the UAE economy remained in good condition. He praised Dubai's leader for his achievements in damage limitation since the emirate's debt woes were revealed to the world after one of the most highi-profile companies in the region, Dubai World, asked for a six month delay on borrowing repayments.

Sheikh Khalifa paid a specific tribute to the ruler of Dubai - who is also his UAE vice president, prime minister and defence minister - saying Sheikh Mohammed bin Rashid al-Maktoum and his cabinet "face every morning challenges, but plan and remove all obstacles to score achievements."

A plan for restructuring its debt

The debt laden Dubai World last night gave its first hint of a reaction to the crisis by revealing something of its plan for the restructuring of its debt. The company said, in a brief and undetailed statement, that it "intends to adopt a policy of regular communication and will provide further updates as the process develops."

The BBC reports that plans to reshape the business is its highest-profile arm, Nakheel, the property company that built the stand-out offshore Palm Island and The World developments (pictured), lies at the heart of the restructuring.

Dubai's oil-rich neighbour Abu Dhabi have vowed to make Dubai learn its lessons the hard way by not intervening as much as they could, which it hopes will force a swift restructuring of unviable business entities.

Abu Dhabi ready to "accept considerable reputational risk"

Abu Dhabi says it is ready to "accept a considerable reputational risk" for Dubai and the UAE as a whole by letting Dubai walk a thin line of debt restructuring and default, sharing its burden with international investors.

Last week, Dubai's government distanced itself from Dubai World's problems saying that it would not guarantee the company's debt.

"[Creditors] think Dubai World is part of the government, which is not correct," said finance minister Abdulrahman al-Saleh.

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