The investment company controlled by the ruler of Dubai wants to extend its debt payback by three months. This had raised questions on just how far deep are Dubai’s credit problems.
Chris Jackson/Getty Images/FILE
Dubai International Capital, owned by Sheikh Mohammed bin Rashid al-Maktoum, said in a short statement Thursday that it has asked lenders for an extension “of certain maturities” until September 30.
“The extension period would allow the implementation of a consensual longer term plan that would enable DIC to maximize the value of its business for the benefit of all its stakeholders,” the company said.
DIC did not give more details of its debt involved. The company has a $1.25 billion loan coming in June.
“The extension period would allow the implementation of a consensual longer-term plan that would enable DIC to maximise the value of its business for the benefit of all its stakeholders,” said the DIC.
DIC will “continue to pay interest” during the extension period, its spokeswoman said.
The parent firm of DIC – Dubai Holding, which is also run by the Sheikh – is believed to have debts mounting to a total of $15 billion. The International Monetary Firm believes the entire Sheikhdom is about $109 billion in debt.
The Queen of Spain traveled to Nairobi Wednesday to go to the Regional Microloan Summit for Africa and the Middle East. Queen Sofia is there to reaffirm how Spain is committed to Kenya’s economic development, and also to see how the NGO Jamii Bora is helping in this.
SIMON MAINA/AFP/Getty Images
When the Queen attended the Summit, the largest on the African continent, she was joined by the Netherlands’ Crown Princess Maxima, who uses her position to promote microfinance.
In her speech, Queen Sofia called microfinance “one of the most powerful engines and solidarity” for Africa’s fight against poverty. She praised Bangladeshi economist Muhammad Yunus for being “able to give shape to an idea so simple and yet so great.”
SIMON MAINA/AFP/Getty Images
The Queen did not forget to also highlight the contribution of private banks and savings banks, with a special reference to Microbank created in 2008 by La Caixa, which has already granted over 60,000 micro-, before inviting all delegates to the World Summit Microcredit will host Spain in the next 14 to 17 November in the city of Valladolid.
“It will be the first time that such a summit is held in a European country,” recalled Queen Sofia, to the applause of the audience, thanking the solidarity of the many anonymous partners through microcredit have helped ” to so many women to regain their dignity. ”
After the summit’s opening ceremony, Sofia went to the Mathare Valley shantytown, just outside of Nairobi. She toured the slum, getting an idea of how the people are starting to benefit from microfinance. The Queen tested food made by a member of Jamii Bora, which that cooks meals at home and sells them for one US dollar to residents.
Tomorrow, Queen Sofia will head to Addis Ababa, Ethiopia, to see how Spanish funds help the people in that city get out of poverty.
Princess Maxima of the Netherlands spent part of Monday visiting the headquarters of the Dutch social networking site, Hyves. She got a chance to chat live with the site’s users, known as Hyvers, and discussed money management with them.
Royal Press/Pool/Patrick van Katwijk
During the conversation, a young girl told the Princess she was saving up to buy herself a computer. This led to an honest question: does Maxima’s eldest daughter, Catharina-Amalia, who would day be Queen and become one of the wealthiest women in the world, save any money too?
The answer was yes.
“Amalia also saves,” Maxima replied. “But she gave all her money away to Haiti during a school action so she must begin again.”
Princess Maxima also said that when Amalia moves on to group 4, which is sort of like the Dutch version of second grade, she will get pocket money like any other child her age.
Maxima was at Hyves to kick-off the Campaign Without Cash, which is meant to teach young people about spending wisely. Some of the young people she spoke to told the Princess that they found it difficult to set priorities. Maxima, a former banker, provided them with some financial tips.
Holland’s future Queen spent Friday in the town of Hoorn located in the north of the country. There Crown Princess Maxima chatted about microfinance with a financing company and local entrepreneurs. That field is her speciality, as she’s a former banker with a degree in economics.
The Crown Princess met with Start Guide, the company that helps entrepreneurs get started by use of microfinance. She was accompanied by Frank Heemskerk, State Secretary of Economic Affairs. Maxima then met for over an hour with small business owners who had benefited from microfinance.
Microfinance in the Netherlands is for people with good business plans, but who need help in developing their plans or what a bank can not correct. With coaching and credit they get the chance to make good plans approved. Start Guide focuses on people who are threatened with unemployment, labor market starters and existing entrepreneurs who could use extra support.
It should be noted that Princess Maxima is a member of Holland’s Council of Microfinance.
On Monday, Dutch Crown Princess Maxima attended the microfinancing event, “Who Profits?” at the Peace Palace at The Hague. The meeting, organized by Radio Netherlands Worldwide, focused on how to help Third World nations receive proper finances, and Maxima asked for developed nations to allow poorer countries to get easier funding.
“What I would like to make clear here is that we are inclined to focus on loans, while other financial products like savings are possibly more important for poor people,” the former banker said in her opening speech.
Check out the video below about the “Who Profits?” event, which includes an excerpt of the Crown Princess’ speech (in English)
This week, Hereditary Grand Duke Guillaume of Luxembourg will be in the Persian Gulf region to promote his country’s financial sector. He will be in Bahrain, Dubai, Abu Dhabi and Qatar, and is travelling with a delegation of representatives, including Finance Minister Luc Frieden.
Ministère des Finances de Luxembourg
In each country Guillaume stopped by, he met with political and business leaders. For example, in Bahrain Monday, the Prince and Frieden met with Prime Minister Sheikh Khalifa bin Salman Al Khalifa.
Furthermore, Guillaume and Frieden will speak at seminars developed by the Luxembourg for Finance, a developmental agency.
Earlier this week, Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum said the media exaggerated his emirate’s debt crisis, and that the world is being misled over how Dubai would solve the problem. The Sheikh also verbally attacked international investors by saying, “they do not understand anything.”
www.sheikhmohammed.ae
Speaking in an e-mailed statement, the Sheikh, who is also prime minister and vice-president of the United Arab Emirates, said “The media hype is exaggerated and will not hurt our perseverance. Dubai World is independent from the [UAE]government.”
“We are strong and persistent,” he added. “It is the fruit-bearing tree that becomes the target of [stone] throwers.”
Dubai World, the state-run company behind the sheikhdom’s property boom, began talks with banks yesterday on how to fix the $26 billion debt. It is also seeking to delay pay backs on less than half of its $59 billion of obligations, easing the possible damage to banks recovering from the credit crisis.
Analysts are saying there is now deep distrust towards Dubai, and a lot of work needs to be done to repair that.
Meanwhile, despite the emirate’s financial problems, Sheikh Mohammed still found the time to purchase some racing horses. Two days before Dubai sent shockwaves across global stockmarkets, he bought eight horses for almost $2 million.
“The horse side of the business is the private enjoyment of Sheikh Mohammed, so therefore has nothing whatever to do with the government, or government funds and the restructuring,” said John Ferguson, the Sheikh’s horse buying adviser.
As Dubai’s debt worsens, its ruler, Sheikh Mohammed bin Rashid al-Maktoum may have to turn to its oil-rich fellow emirate, Abu Dhabi for help.
MARWAN NAAMANI/AFP/Getty Images/FILE
But will that emirate assist Dubai again? Abu Dhabi already helped Dubai earlier this year with a $10 billion bailout when the global recession first hit. Sheikh Mohammed has always said the two emirates have tight bonds, but how the two will ride out this financial crisis will determine that.
“Differences between the two city-states remain on how to approach the economy and the financial crisis,” said Hani Sabra of Eurasia Group, a U.S.-based research firm. “But now Abu Dhabi is obviously the more dominant emirate.”
When Dubai announced its debt payment was being put on hold, two Abu-Dhabi banks bought $5 billion Dubai bonds, but nothing more.
“I guess Abu Dhabi is saying there will be no blank check for Dubai,” said Jane Kinninmont, a London-based specialist on Gulf economies at the Economist Intelligence Unit.
Just this month, Sheikh Mohammed insisted that all was well with Dubai’s finances and told media critics to “shut up.” Most of the plans he had for Dubai’s development – such as real-estate on the artificial island Palm Jumeirah, and other major property plans – have been put on hold. As a result, Dubai has become the biggest symbol of the global property bubble bursting. Its financial woes have some wondering if another crisis is on the way.
Next week may display that. The global stock markets reopen on Monday, following the shockwaves Dubai caused on Friday. Wednesdaay is the UAE’s national day. Whether Abu Dhabi is willing to help its neighbor remains to be seen.
“There is no point throwing good money into Dubai‘s black holes,” said Christopher Davidson, an expert in Emirate affairs at Britain’s Durham University. “These are mistakes of Sheikh Mohammed and he needs to deal with them.”
Two weeks after her appointment as the UN Advocate for Inclusive Finances for Development, Crown Princess Maxima spoke at a special event ahead of the International Monetary Fund and World Bank Meeting in Istanbul Monday.
The IMF managing director Dominique Strauss-Kahn and Maxima launched a Dutch-funded project in Istanbul, which is a global project aimed at collecting data on access to financial services in a bid to help policies aimed at reducing poverty.
In her speech, the Crown Princess explained how the project intends to help the 2 billion people worldwide who do not have access to finances.
“It is clear that national strategies and visions need to be developed,” Maxima said. “These strategies need the engagement of governments, the country’s regulators and supervisors, financial institutions (including NGO’s) and even telecom providers or retailers. All of these should work together to increase access to financial services.”
“The innovations in the field of financial inclusion are enormous,” she continued. “Technologies like smart cards, ATMs, and mobile banking hold the promise of both greatly expanding financial access and slashing costs for providers – making it possible to reach communities once thought infeasible.
“Also, new savings and insurance products are being piloted around the world, and having appropriate regulations is essential in taking them to scale.”
Maxima went on to talk about how the project helps to identify knowledge gaps and priorities for policy, monitors the effectiveness of policies over time, and finally provide a platform for researchers to better understand the causes and implications of financial access.
“While the IMF’s commitment is truly a breakthrough, it is also just a beginning,” the Crown Princess said. “Going forward, additional support is necessary. We need a continued push in the form of high-level commitment from governments and donors to complement this important effort with bottom-up data that will help unlock valuable information about financial services at the individual and household level.”
At the end of her speech, Maxima thanked the audience for their attention, but most importantly thanked the IMF for coming up with the initiative.
Crown Princess Maxima added another title to her long list yesterday. United Nations Secretary General Ban Ki-Moon named her the U.N. Special Advocate for Inclusive Finance for Development. She will be Ban’s representative on making financial development available to third world countries.
Reuters
In those countries, many are unable to take out a loan or even open a bank account. The U.N. is focused on changing that.
A former banker, Maxima has been a member of a U.N. board for microfinance and an accessible financial sector for a few years now, and this position displays how she is well trusted with these kinds of issues.
The Crown Princess is the second member of the Dutch royal family to be given a high position in the United Nations. Her husband, Crown Prince Willem-Alexander has been Chairman of the water and sanitation committee since 2006.
Maxima is also going to be present at the Clinton Global Initiative, and will be making a speech there later on today.
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