“The Global Financial Crisis: Impacts, Policy Responses and Future Prospects”
(27-28 October, 2009)
The current global financial and economic crisis is almost unanimously considered as the most serious shock to the global economy since the 1930s Great Depression. Though this crisis emanated from advanced economies, its consequences are global, especially for emerging economies that are highly integrated into the global economy like those of the GCC, most notably Dubai/UAE. Moreover, even less developed and poorer countries that are relatively isolated from global markets are also vulnerable, some quite severely, because the crisis might also lead to lower official development assistance or collapse of commodity exports. For example, the World Bank projects high income economies to shrink by 0.1 percent in 2008, compared to a pre-crisis projected growth of 2.5 percent for the same year; and for 2009 these economies are forecasted to experience even deeper recessions, ranging from a negative real growth of -4.2 percent for the Euro area to -5.4 percent for Japan. Also, for the first time since 1982, global trade volumes are expected to actually contract in 2009. The policy responses discussed in policy and academic circles, and implemented by some countries, are centered on fiscal stimulus packages and liquidity provisions, asset purchases, recapitalization, and guarantees.
The Group of Twenty (G-20) economic summit in April pledged to do whatever is necessary to “restore confidence, growth and jobs; repair the financial system to restore lending; strengthen financial regulation to build trust; fund and reform the international financial institutions to overcome the crisis and prevent future ones; promote global trade and investment and reject protectionism; and build an inclusive, green, and sustainable recovery”. The G-20 at their summit in Pittsburg in September 2009 pledged to sustain the strong policy response to counter the global economic crisis and provided political support for a shift in country representation at the IMF towards dynamic emerging market and developing countries. Moreover, the G-20 was designated as the “premier forum for our international economic cooperation”.
The UAE government and that of Dubai succeeded in stabilizing the banking sector and restored depositors’ confidence in the system by adopting fiscal and monetary policies and measures that counteracted and contained the impact of the global crisis on the domestic economy. Liquidity was provided to the banking sector; the governments guaranteed all deposits at all banks in the UAE as well as inter- bank deposits. In particular, Dubai’s bonds have contributed immensely in this regard.
The Dubai Economic Council, being the strategic advisor for the Government of Dubai in development policy issues, has taken interest on the current global financial crisis and its potential implications for Dubai/ UAE. In this context, the Council has conducted many studies and organized consultations with government officials and representatives of the business community. This event, the Dubai Economic Forum 2009, was the culmination of these efforts.
In the light of the above, this forum analyzed and drawn the lessons from four interrelated issues regarding the crisis:
- Why and how it happened and its consequences for the economies of the region;
- The sectoral impacts on key sectors and markets: real estate, stock markets and oil;
- The emerging global regulatory framework and the new financial architecture;
- The long term development strategy for the UAE/ Dubai in the post crisis global economy.
- Decision makers of federal and local entities in the UAE.
- Representatives of local business community.
- Local and international academic and research institutions.
- Regional and international development organizations.