Dubai’s government has moved to reassure investors after abruptly sidelining the emirate’s recently appointed director of finance as he sought to lessen the effects of the economic crisis.

Nasser al-Shaikh was appointed eight months ago to restructure the city’s economy. Falling property prices and the credit crunch have hit Dubai’s financial model hard, with work stopped on hundreds of building sites and the government and state-owned developers facing debts totalling $80bn (£52bn).

But this week Mr al-Shaikh was unexpectedly moved to a position in the emirate’s foreign affairs office with no explanation given.

Speculation was rife that he had fallen out with an adviser to Sheikh Mohammed bin Rashid al-Maktoum.

On Tuesday night, the government released a brief statement attempting to draw a line under the controversy and to reassure the financial markets, which regarded Mr al-Shaikh as an innovator keen to introduce more openness into Dubai’s financial management.

The statement said that his replacement, Abdul Rahman Saleh al-Saleh, a senior official at the customs agency, would continue to pursue similar policies as his predecessor.

Mr al-Shaikh’s main achievement has been the successful issuing of a $10bn bond, bought by the federal government of the United Arab Emirates, which eased the immediate financial concerns of the major state companies.

In an equally unexpected, separate development, the federal government of the UAE also announced it was pulling out of plans for a common Gulf currency.

The new currency, to be shared between the UAE, Saudi Arabia, Kuwait, Bahrain and Qatar, was due to be issued next year. The UAE, the second biggest economy in the group after Saudi Arabia, was upset at a decision taken last month to site the new Gulf central bank in the Saudi capital Riyadh.

Source: The Telegraph

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