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Few people on the ground in the GCC would suggest that the ongoing shenanigans around the restructuring of Dubai World’s debt has cast a particularly long shadow over the financial sector in the region.
Those outside of the Middle East would disagree, however, and the implications for Dubai as an internationally recognised financial centre – and attractive place for western financial professionals to work – have been significant.
In the eyes of the western media, not only were Dubai’s ambitions to challenge London, New York and Singapore as a financial centre scuppered, but it also had to fight for its regional crown from the likes of Abu Dhabi, Qatar and Saudi Arabia.
After months of negotiation, Dubai World has now reached a deal in principle to restructure its $23.5bn worth of debt with its creditors.
In theory, this should draw a line under the incident and allow the Arab emirate to begin the long walk down the road to economic recovery after a tough 18 months.
But how much has Dubai’s image as the place to be for bankers based in the Gulf been tarnished anyway, and how viable are the claims of the new pretenders?
Abu Dhabi would finally be able to truly establish itself as a true global financial centre; Qatar – so long a relative minnow in the sector – would create as many as 5,200 finance jobs this year
and become the new mecca for expat bankers. And Saudi, the sleeping giant of the GCC, would finally flex its muscles and attract deal-hungry investment bankers to its borders.
Certainly, the UAE has been the worst affected when it comes to redundancies, with 16% of all cuts hitting there in 2009, according to a report by GulfTalent, and 13% of headcount reductions across the GCC occurring in the banking sector.
It would be foolhardy to suggest that Dubai is offering financial sector professionals bountiful employment prospects again. What is open to debate, however, is just how great its fall from grace has been since that dark day in November 2009 when markets plummeted after Dubai’s debt bombshell.
After an initial retrenchment, one large regional financial services recruiter told me this week that for the first time in six months, Dubai has more live job vacancies than any other Gulf state. Don’t write the old dog off just yet.
Debt woes behind it?? Please, let’s try to maintain a level of realism and credibility on the articles on this site, unless you want to start replicating the garbage on other MENA business sites (e.g., arabianbusiness.com, etc.). Articles like this, that clearly refuse to deal with economic realities in the region, contribute nothing. I understand you’re trying to get viewers/applicants to the site, but this is ridiculous.
I have to agree generally with the previous comment.
Dubai World is just the tip of the iceberg in regards to debt problems in Dubai. An agreement in principal is not a completed agreement. There is still further to go and if it doesn’t get resolved soon, before the regional markets (especially Dubai) take a serious plunge (which could happen soon), then it could get more difficult to close the deal. Talk to the smaller business owners and individual real estate investors and you find problems everywhere.
Further, the powers that be have so little credibility in my opinion when it comes to comments to the press, that their comments should be looked at as contrary indicators. This is not to say that there’s not some truth in the statement that 60% of creditors agree to the proposed restructuring, just hhat iit should be viewed with extreme caution.
What are you talking about? Debt problems of Dubai is past, a turned page. All bonds and loans since the DW event last year have been paid timely and orderly with the government support.
In fact, during this current crisis in Europe and the US that dragged down their equity and credit markets, many bonds from the UAE are actually are trading higher as they have been perceived as safe havens due to the implicit government support and the large sovereign reserves of the country. Get a Bloomberg/ Reuters and check by yourself.
Never thought that being an European expat in Dubai could be so comforting like in these days.