Government measures taken so far to support Dubai through a sharp economic downturn should be sufficient to stabilize its economy for at least nine months, the United Arab Emirates' economy minister said on Monday, as press said that a UAE draft media law could give authorities wider powers to regulate increasingly gloomy economic reporting.
Sultan al-Mansouri also said he expected the UAE, world's fifth-largest oil exporter, would escape recession this year even as it faces a real estate downturn and a slump in oil prices.
For the past few years, Dubai crafted an image of a place where bad news was left at the door. Money was flowing like nowhere else. Each new building seemed more indulgent than the last. But as the downturn hit, the stories shifted to gloomy updates about canceled projects and layoffs. Officials were put in the unaccustomed role of denying reports that Dubai's population was shrinking as jobless foreigners left town.
The Dubai government last week launched a $20 billion dollar bond program and sold the first $10 billion tranche to the UAE central bank, a move that calmed worries the former Gulf boom town could default on some $15-20 billion in debts due for refinancing this year.
"We are evaluating the situation on a case-by-case basis. At present, we see stability for at least nine months," Mansouri told Reuters when asked what further moves the government would take to stabilize Dubai's economy.
"As we go on, we are not isolated from the world. We will address the situation at the federal and local levels and take appropriate measures," he said.
Since the global financial crisis deepened in September, the UAE central bank and finance ministry have launched Dhs120 billion ($32.67 billion) of funding facilities for banks in order to unlock credit markets.
Dubai developers, meanwhile, have access to up to $2.2 billion from escrow accounts to cover construction commitments, the emirate's property regulator said last week.
Mansouri said he was "comfortable" about the situation of the UAE economy.
Some economists are expecting the second-largest Arab economy could shrink in size this year as hundreds of billions of dollars of projects get cancelled or are put on hold and employers cut thousands of jobs.
"I don't think there will be recession in the UAE," Mansouri said. "There will be a slowdown because we are part of the world and we will be affected."
The UAE has set up committees at the federal and local levels to examine how to tackle the financial crisis, he said.
At present, we see stability for at least nine months
UAE economy minister Sultan al-Mansouri
Regulating gloomy reporting
A UAE draft media law could give authorities wider powers to regulate increasingly gloomy economic reporting after years of basking in coverage of hyper-growth and glitterati just as dazzling and gossip-worthy as Hollywood's.
The final version of the proposed law still requires presidential approval, but journalist groups have made pre-emptive strikes - accusing officials of trying to muzzle the press and force news outlets to become part of the country's image-building machine. Government officials insist the draft law is in "no way a response" to the economic turmoil and work on it began during the boom times two years ago. "It's merely a coincidence that the legislation has reached the stage of review ... when our economy, like that of every country, is facing complex problems," said Ibrahim al-Abed, the director of the National Media Council, as reported by the Kuwait Times.
The new draft media law, passed by national lawmakers in January, can impose fines up to about $136,000 for "carrying misleading news that harms the national economy" and for "deliberately publishing false news." It also includes fines of about $272,000 for "insulting" members of the ruling elite. "The new law has no reference to imprisonment," al-Abed explained. He said it also protects reporters against revealing their sources and obligates ministries to disclose information.
"Dubai has an economic threat going on," Timothy Walters, head of the journalism and mass communications department at the American University of Sharjah, said in the report published by the Kuwaiti English daily. "When a society feels threatened, people who manage it try to regulate the media because they know media has the power to change." Nearly all Mideast countries pose challenges for local coverage of sensitive topics such as the rulers' private lives or political dissent.
We reject this law. It has more restrictions than it is necessary
Mohammed Youssef, the director of the UAE Journalists Association
The proposed law has already sent a chill through some local media, which have typically avoided stories that could anger ruling officials. But they now face a newsroom dilemma. The economic troubles are often the main story in the Emirates.
We reject this law," said Mohammed Youssef, the director of the UAE Journalists Association. "It has more restrictions than it is necessary." Youssef said journalists were puzzled by the vague wording of offenses such as "false news" and misleading information on the economy. "You could interpret every news item as misleading ... particularly since the economic indicators are unpredictable," Youssef said in the report published by the Kuwait Times.
But some Emirati journalists favor the law, saying it protects their industry. "It's not to stop bad news," said Abdullatif al-Sayegh, who heads the Arab Media Group, a Dubai-based media conglomerate. It is, however, to prevent journalists "digging for bad news," he said. "The law is to protect the media community and only those who don't have the ABCs of the business are worried," said al-Sayegh.
It's merely a coincidence that the legislation has reached the stage of review ... when our economy, like that of every country, is facing complex problems
Ibrahim al-Abed, the director of the National Media Council