Quick Action Averted Crisis

DUBAI - Timely intervention and assistance by the UAE government has helped minimise impact of the global financial crisis on the country’s economy, said His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and the Ruler of Dubai.

“We live in a global village. Global economies are one unit. Which was the reason why the UAE was quick to deal with the current situation,” Mohammed said in his opening address at the World Economic Forum’s first summit on the Global Agenda in Dubai.

“His Highness Shaikh Khalifa bin Zayed Al Nahyan, UAE President and Ruler of Abu Dhabi, took quick measures to face this crisis by injecting money into the UAE banking system to preempt any potential issues, strengthen the financial system’s capabilities and to ensure the industry is unaffected by global market forces,” he said referring to the Dh120 billion facility announced last month for the country’s financial sector. He said economists have traditionally opposed a larger government role in the economy. However, steps taken by governments across the world have proved otherwise.

Full Text of Shaikh Mohammed’s Speech

· Ladies and Gentlemen.

Thank you all for attending and welcome to Dubai. I would like to take this opportunity to congratulate the American people on the election of the new President Barack Obama this week. This election comes as a symbol of hope during the present economic crisis, of which the American nation is the most affected. I hope the new administration takes the time to reconsider its foreign policy in current war-zones.

To the new administration, I would like to say that crises are not solved by wars, weapons or a show of power. This is evident in current crises, such as the Israeli/Palestinian conflict, the Iraqi war, Darfour, Somalia and even Afghanistan, that are still raging and circumstances there deteriorating. Military spending in these hot spots could have aided underprivileged citizens and assisted those in need. Had this in fact been the case, and had brain power been utilised, the world would not be in the situation it is today. Today, we are in a unique place.

The United Arab Emirates is the country of the future. We come together to build this future and make history happen. I assure you, these efforts will not stall and will continue on with full speed. We have proven to everyone how capable we are in turning risks and challenges into opportunities.

The present situation is a result of misguided policies and not of difficult times. In the west, and especially the USA, the policy of unsecured mortgages or loans are good examples of this. These are usually accompanied by incentives – bonuses – coveted by those in senior positions in banking and finance. These bonuses usually result in losses for institutions due to chaos in the processing of loans. In the case at hand, this resulted in damage to banking and finance institutions – the reason behind the chaos in the first place.

When it comes to reality, things are different.

A few of my friends were wondering about what is happening in stock markets; where some shares were dropping. I told them it did not matter since these shares rose from what they originally started from, technically we are still ahead. Unfortunately, people usually tend to be pessimistic and focus on losses and forget their gains.

Investors should always keep in mind that – in trading – you may lose and you may win. That is a risk you should always be prepared to take.

It surprises me that many experts did not see this crisis coming. I take this opportunity to remind you of my speech in China – and Al Khaleej University in Bahrain – where I mentioned that things would change soon. I meant then that the economic powers would shift from the shores of the Atlantic - the USA and Western Europe. The fluctuation in world markets, global inflation and rise in price of oil were indicators that this was inevitable. Everything has its advantages and disadvantages. This crisis has proved that the economy is truly global – and whatever happens in the USA or China will ultimately affect all global markets.

It has also proven the importance of interference and assistance of governments in some cases – such as in this case, where a bad situation was prevented from becoming a disaster, and governments proved they looked after the interests of their citizens.

Economists and experts should not continue their preaching to alienate governments. We do not aim to control, but rather to strengthen public-private partnerships for overall economic prosperity. The strict financial regulations in the GCC have minimized the impact of the crisis on their economies. 

We live in a global village. Global economies are one unit. Which was the reason why the UAE was quick to deal with the current situation.

His Highness Sheikh Khalifa Bin Zayed Al Nahyan, UAE President and Ruler of Abu Dhabi, took quick measures to face this crisis by injecting money into the UAE banking system to preempt any potential issues, strengthen the financial system’s capabilities and to ensure the industry is unaffected by global market forces.

Despite the negativity of today’s situation, we can learn a positive lesson from it.

People are decision makers and they can write their own history.

We should never forget that the economy and global stability go hand in hand to building the future.