The Malaysian state of Johor said its economic zone, which has the nation’s largest number of Middle Eastern investors, should be unscathed by the Dubai debt crisis, reports said yesterday.
Dubai World, the city state’s flagship conglomerate, announced on Wednesday that it was seeking a six-month reprieve from its US$59 billion debt payments, sending global stocks into a nosedive on fears of a default.
The chief minister of southern Johor state, Abdul Ghani Othman, told the Star daily only one Dubai company, Damac Properties, had invested in the Iskandar special economic zone.
PHOTO: REUTERS
“Since only one company from Dubai is involved in Iskandar, we don’t think the Dubai financial crisis would have an effect on the regional growth area,” he told the paper. “Most of the investors in the growth area are from Saudi Arabia, Kuwait and Abu Dhabi.”
An aide to Abdul Ghani confirmed his comments to reporters, saying the Dubai company had yet to begin operations in the area.
He said total investment for Iskandar, which was launched in 2006, had hit US$13 billion so far, with about 15 percent coming from Middle Eastern investors. Almost three times bigger than neighboring Singapore, the Iskandar region is planned to be Malaysia’s largest economic zone upon completion in 2025, by which time the government hopes to have created 800,000 jobs and attracted about US$100 billion in investment.
Separately, the impact of the Dubai debt crisis on South Korean markets will also be limited, the nation’s regulator said yesterday.
“The chance of this expanding into an outright systemic risk like Lehman Brothers is pretty low,” the Financial Services Commission said in a statement on its Web site. “Still, we’ll monitor the possibility of an escalation into instability in global financial markets and will make preparations.”
South Korean companies had a combined US$32 million in loans and investments associated with Dubai World and its property unit Nakheel PJSC at the end of September, the Financial Supervisory Service said on Friday.
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