Dubai media and several business leaders rallied to support the Gulf Arab emirate's efforts to manage its debt crisis, saying problems have been exaggerated and the impact of restructuring overblown.
Riad Kamal, chief executive of Arabtec, said he had no doubt about Dubai's commitment to settle its debt.
"Dubai should be given time to restructure its debt. I'm not going to lose sleep over this issue," he said.
The crisis began on Wednesday when Dubai, part of the United Arab Emirates federation, asked to delay payment on billions of dollars of debt issued by conglomerate Dubai World and its main property subsidiary Nakheel, developer of palm tree-shaped islands that once attracted celebrities and the super-rich.
"I am very relaxed. Dubai has never defaulted and it will not default," Khalaf Al Habtoor, chairman of Al Habtoor Group, said. "I am confident the government will meet its commitments and help the companies."
An executive at Emirates, one of the region's largest banks, also sought to minimise the impact, saying: "It's business as usual and there's nothing to worry about."
Nevertheless, Dubai's share index fell 5.9 per cent in early trading, while DP World plunged 14.9 per cent when UAE markets opened for the first time since the debt repayment delay was announced. Abu Dhabi's bourse also declined, losing 7.1 per cent to 2,703 points.
The president of Emirates airline told London's
Sunday Telegraphin an interview that he was shocked by the global fallout, but said: "Dubai will navigate itself out of this, as will we." He said the carrier would not be affected.
The English-daily
Khaleej Timesnewspaper said the Dubai government had taken a hard look at the way Dubai Inc operates, and will fix what has not worked.
"The need to restructure Dubai World is for real, and the decision to go ahead with it indicates maturity on the part of the emirate's decision-makers," the paper said in an editorial.
Khaleej Timesdefended the goverment from critics who said the announcement, made just before a four-day Eid al-Adha holiday, had undermined Dubai's credibility and transparency. "The timing of the announcement of a possible six-month delay in repaying the group's debt can be debated by market-makers, but not the intention behind it," it wrote.
Some bankers and investors also believe last week's Dubai World restructuring announcement was blown out of proportion.
"The crisis itself has been exaggerated. It is very much localised in one sector and one group. It has been escalated to a much bigger issue," Suresh Kumar, chief executive of Emirates NBD capital said.
Ajman Bank, one of the UAE's smallest banks, said it would pursue its plan to open a Dubai branch in December.
"Since the start of the global crisis, this is not the first time a postponement has been announced in a world economy like Dubai," Ajman Bank's acting CEO Ali Alshaqoosh Al Mueen said. "The decision will certainly have been taken after a thorough review of all resulting benefits and outcomes."
Some executives at international banks active in the region also voiced confidence in Dubai.
Michael Geoghegan, HSBC Group chief executive, said in a statement at the weekend he was "confident that the leadership of Dubai and the UAE will overcome any short-term issues they face, which appear to have been somewhat sensationalised, and continue to lay the foundations for sustainable growth."
Mounir Husseini, Deutsche Bank's chief country officer for the UAE and Qatar, said in an email statement: "It is clear to me that the leadership of Dubai, supported by Abu Dhabi, is committed to taking the right steps for the UAE."
Reuters