DP World volumes down 8%, UAE confidence slumps
Posted on 26 March 2009 with no comments from readers
Dubai-owned global port operator DP World has reported an eight per cent fall in volumes across the group in early 2009, while the latest HSBC GCC Business Confidence Survey showed a slump in UAE confidence to 57.9 per cent, the lowest of the GCC states.
DP World chairman Sultan Ahmad bin Sulayem told Gulf News that in response to the slowdown in global trade 50 per cent of expansion work was being deferred. He said the UAE remained its strongest market with most of the developed countries reporting double-digit declines.
Japanese trade crashes
Yesterday Japan, the world’s second largest economy, reported a 49.4 per cent crash in exports in February, and imports down by 43 per cent. Downturns in global trade on this scale have not been seen since the 1930s.
Indeed, the Japanese trade slump is bigger than anything seen in the Great Depression years. Analysts said that this decline would continue through March and April, and that after that the Chinese stimulus package might help revive trade.
However, it is hard to be optimistic about the outlook for global trade in this environment. President Obama’s reassuring words about the strength of the global economy are just not true. Has he heard the news from Japan?
That said the UAE might well be the least affected nation in the global economic recession, although the Governor of the Central Bank noted yesterday that the oil price slump would ‘have a great impact on the economies of the Gulf region’ and ‘a contraction is possible in all GCC countries’.
Realism rules
It is best for everyone to be realistic in this economic environment. To be optimistic is to risk annihilation by market downswings, and debt deflation with the burden of debt becoming intolerable as revenues evaporate.
In truth, the market is merciless in its deepest downswings. And while the UAE is almost sure to come out on top in the long run, that will be mainly due to the bankruptcy of other nations and their largest enterprises and the relative strength of being a net creditor and oil producer.
In the meantime, if you want proof that there is still pain to come in the UAE have a look at the thousands of unsold new cars now parked outside the Jebel Ali Port on the vacant Waterfront site. Cars are not being abandoned by their owners at the airport, they are not being sold and staying at the port.
