IMF And Other Institutions To Carry Out The Project Cautious Reminder Of Dubai
According to the United Arab Emirates’ national newspaper “reported on August 16, International Monetary Fund (IMF) said recently that the current large-scale infrastructure projects in Dubai has become an important support in 2020 before the UAE non-oil economic growth, but if implemented properly, large-scale The project is also likely to become the UAE’s economic growth potential risk.
IMF predicts economic growth in the UAE in 2015 was about 3.4%, affected by the World Expo 2020 will lead to the implementation of large projects and the private sector investment activity and other factors, to the 2020 economic growth could rebound to 4.6 percent.
But the IMF stressed that taking into account the 2008 – 2009 after the global financial crisis in Dubai as well as large-scale undischarged debt (currently the Dubai government and government related enterprises (GREs) in debt of about 143 billion US dollars), so if the implementation of large-scale projects properly, it is possible for GREs, banks and government in Dubai itself lead to greater macro-financial risks.
It is reported that this year, the Dubai government budget of 410 million dirhams (US $ 112), of which about 13 percent or 53 billion dirhams (about 1.45 billion US dollars) plan for infrastructure, the current situation on the market liquidity is still relatively abundant.
Dubai government could choose to expand the sale of Islamic bonds funding sources, but according to market experience, such as the mega project Maktoum airport, just by issuing bonds still cannot meet the financial needs of the project undertaken.
So Dubai is likely to improve the utilization of resources contracted with, that the necessary funds by the Contractor raise construction projects through bank loans and other channels, and income-generating projects are completed and then gradually recover the costs.
It is reported that the Dubai Roads and Transport Authority and other departments have adopted contracting with funding the canal project in Dubai, Al Maktoum Airport expansion project and other large projects, provide financial support for foreign export credit agencies including the United Kingdom and the Republic of Korea and Japan Finance Corporation specialized export credit agencies.
Industry analysts believe that, with a funding contract it is not a bad way, but the outbreak of the negative impact brought about by the growth of borrowing by the year 2008 GREs, the need to attract attention is that the project can proceed smoothly and achieve the expected recovery of investment costs income.
The world’s leading economic research institutes Kay cast macro has recently expressed the current construction projects in Dubai GREs projects especially concern, saying that if the 2020 World Expo visitors bring growth and other positive effects cannot be sustained, then the project before 2008 Construction accumulated surplus and debt problems will reappear.