Britain will Continue to Support Dubai

DUBAI — The British government will continue to support Dubai through this difficult period and believes that the emirate’s economy will recover, UK Business Secretary Lord Peter Mandelson said on Sunday.

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By Ovais Subhani

Published: Mon 15 Feb 2010, 11:14 PM

Last updated: Mon 6 Apr 2015, 4:46 PM

He said his government was working closely with the authorities in Dubai and hopes to achieve resolution of issues like debt restructuring and payments.

“The British government will stand besides Dubai,” said Mandelson. “We do so not just because of the historical nature of the relationship between Britain and Dubai. We do so because we believe in Dubai, we are an admirer of Dubai and we believe in Dubai’s future. So it’s therefore not just the natural solidarity but it is self interest as well.”

Mandelson was speaking at a lunch hosted by the British Business Group of Dubai and the Northern Emirates and said he would meet several officials in Dubai, including executives of Emirates Airlines, Emaar Properties, and Dubai World.

“We are working with Dubai authorities to resolve the issues of the British companies here, largely banks and construction companies.”

Mandelson urged Dubai to reach an agreement with its creditors to settle its debts in a transparent and equitable manner as quickly as possible. “Dubai has to be conscious of the fact that depending on how it resolves the current problems will mean a great deal for how it secures investment in the future. Dubai has to tread carefully, openly and not for too long. It has to reach an agreement that’s demonstrably fair,” Mandelson said.

He said economic restructuring will not be “painless” but was necessary to set Dubai on a sustainable growth path on which the government and companies of Britain would want to partner the emirate. “Dubai is going to recover its direction and therefore we want to be part of the upturn just as we were with Dubai in its bad period.”

British companies are amongst the biggest international creditors to Dubai, with state-controlled Royal Bank Of Scotland Group Plc and Lloyds Banking Group Plc exposed to Dubai World which plans to restructure repayments on some $26 billion in debt linked to its main property units Nakheel and Limitless World.

Dubai shares tumbled on Sunday, closing down 3.5 per cent on speculation about terms of the proposed Dubai World debt deal. The cost of insuring Dubai’s sovereign debt against default rose to its highest level since November on Friday as concerns resurfaced over the emirate’s large debt and a delay in presenting a deal to Dubai World creditors.

ovais@khaleejtimes.com

Ovais Subhani

Published: Mon 15 Feb 2010, 11:14 PM

Last updated: Mon 6 Apr 2015, 4:46 PM

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