DUBAI — This Mideast boomtown’s government has hired financial advisers to review the emirate’s economy amid a global credit crunch that has pushed up the cost of financing its large debt, according to senior Dubai officials.

The advisers will review the investments of various Dubai-owned companies, and present a report on how to reduce the risks to the sheikdom’s economy from the global downturn, the officials, who declined to be identified, told Zawya Dow Jones.

The officials declined to describe details of the advisors’ mandate or to identify who Dubai has hired to carry out the review.

Analysts have worried about Dubai’s ability to refinance its massive debt as international capital markets have become increasingly difficult to access amid a global credit crisis. Dubai, one of seven emirates that make up the United Arab Emirates, doesn’t have the large quantities of oil that neighboring sheikhdoms in the Persian Gulf enjoy. For years, its rulers have financed the city-state’s economic diversification and rapid, recent growth with the help of overseas borrowing via its many state-owned or controlled corporate entities.

Next-door emirate Abu Dhabi, the UAE’s federal capital, has deep pockets thanks to its vast oil revenues. Analysts have long suggested it could come to Dubai’s aid in a pinch, providing a sort of federal bailout for the government or its corporate entities.

Publicly, Dubai officials have said in recent weeks that the government’s finances are sound, and it won’t have trouble meeting its debt obligations.

Source: Wall Street Journal

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