Thursday, November 13, 2008

Restoration of public confidence in Dubai

For the first time in years, Dubai's fast-growing economy is showing signs of slowdown - something its residents are not used to. In the real estate sector, which is driving the emirate's economic growth, selling activities have come to a near halt.

Speculators, who used to trade in 'paper projects' and 'artist's impressions', are feeling the pinch while others are looking at cost-cutting measures. A lot of people have burnt their fingers and the rest are waiting to see what happens. Investors are holding on to their cash and banks are reducing personal loans.

In the absence of clarity, wild rumours are flying at lightning speed - much faster than news while the real news is becoming a casualty - damaging consumer confidence.
Rumours of real estate firms firing employees did perhaps more damage to Dubai than the release of the news of actual redundancy.

Damac - one of the largest private sector developers - showed some courage in informing the public of reducing headcount by 200, or merely 2.5 per cent of its manpower base, that will now calm the rumour mills.

This comes amid indications that the major players are also reducing manpower as part of cost-cutting measures. Emirates airline reported an 88 per cent decline in its half-yearly net profit. The news bolsters public trust in the airline.

Restoration of public confidence amid such a slowdown is the need of the hour, as Dubai gradually faces the impact of the global meltdown. It is therefore, important to take stock of the situation, revise plans and keep the public informed.

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