'Impact of crisis on UAE is exaggerated'

The President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, Ruler of Abu Dhabi, yesterday stressed that the impact of the current global financial crisis on the national economy has been misunderstood and exaggerated.

Sheikh Khalifa expressed confidence in the ability of the UAE's national financial and economic institutions to address the problems so as to safeguard the country's regional and international status and reputation in economic and investment terms.

Sheikh Khalifa made the remarks in an interview to the new Abu Dhabi-based Alrroya business newspaper.

"Our national institutions will be able to tackle any temporary burdens resulting from the global financial crisis, thanks to their vast experience, respect and credibility in the markets they operate in, as well as the keen interest of the government in providing support to them," Sheikh Khalifa said.

He said the UAE is dealing responsibly with the international community and the efforts being made to face the impact of the global economic crisis are in accordance with its capability as a developing nation.

"Although we too are victims of the global financial crisis, we have worked with the international community to help the countries hit by this crisis. We have also worked within the Gulf Cooperation Council (GCC) towards shaping a collective position on the crisis. Saudi Arabia had been delegated to express this position at the G20 Summit in Washington in December 2008," Sheikh Khalifa said.

The President said the global financial crisis had exposed the structural shortcomings in the world financial order, which, in turn, require the world's major economic powerhouses to act swiftly to remedy these ills so that the world can chalk out the right path towards tackling the crisis and containing its consequences.

The President categorically denied rumours about the depth of the crisis Dubai is facing and that the Government of Abu Dhabi was seeking to acquire a number of Dubai Government-owned companies.

"There were misinterpretations of the relationship between emirates, who are members in the Federation.

"We are members of one entity and parts in one strong, coherent body. As for the measures taken on the federal or local levels to address the crisis, they were declared and clear-cut and there were no need to unleash predictions in this respect," the President said.

Sheikh Khalifa further maintained that "any economic measure should maintain high standard of transparency and this is what we are doing in handling the current financial crisis".

The President said the stature the UAE is occupying on the global economic map was not temporary or born out of a certain economic condition, rather it was a fruition of tireless efforts at both federal and local levels.

Speaking about oil prices, Sheikh Khalifa said the surge in revenues generated during the boom in world oil prices in 2008, though relatively short, had been reflected in the public spending and salaries.

"The federal budget has seen remarkable increase and maintained balance despite the rise in expenditure.

"These resources have contributed to increasing investments, which back the drive for diversification of source of income."

The President called for creating a mechanism for controlling the world oil market to prevent harmful speculations by circles out of the oil industry and running after quick profits regardless of the damage they inflict on producers and consumers.

"There is also a need for introducing criteria concerning tax imposed on oil, which is an additional burden that has become more heavier than that of the original price of oil."

Replying to a question on whether global developments will slow down the development of the country, Sheikh Khalifa said, "We are part of the global economy and are affected by it. Certainly, the recent developments in the global economy was reflected in our national economy. But we do our best to contain these reflections, discover their effects and weather them, taking advantage of the relative flexibility of our economy. This makes it possible to adapt and deal with the crisis in a mature way. The modification of some priorities in the framework of the adaption process does not mean the whole march of growth and development is prone to slowdown and threat.

"The transformation of the country into a global business centre is not done by a decision, but it is the outcome of efforts and plans being implemented since years. These efforts were not restricted on mere economic building, it also included infrastructure facilities, improvement of the level of services and social development, which includes the development of human resources as well as the development of legislative environment suitable for all economic and social developments.