The federation of the UAE's first real challenge was the effect of the global economic crisis in Dubai and during the time the leadership of the country rose to the occasion.

Nasser Al Shaikh, Director General, Department of Finance, recently said that a range of continuing public questions over several months was raised by the stresses of the economic crisis; however the situation was dealt well by the leadership in the emirates and federal governments.

It was expressed by Al Shaikh at a session on Dubai at the World Economic Forum in the Middle East at the Dead Sea that they have come closer to their colleagues in the federal government in the past six months.

He especially pointed to the UAE Central Bank, which has always regulated the banking sector throughout the whole country.

Al Shaikh added, "Throughout the crisis we have had to work closely with the federal government, and when we launched our bond issue, the Central Bank took it up fully."

When Al Shaikh was asked a question that whether Dubai had ignored the crisis for far too long, he replied back strongly that he completely disagrees that they have not been living in a state of denial.

Mr. Shaikh told the reporters, "We knew that a crisis was coming our way from the end of the summer in 2008, but until the collapse of Lehman's we did not know how serious it was going to be."

Al Shaikh, who seemed very confident that by recognizing this lapse, the fundamentals of Dubai have not changed.

Al Shaikh specially referred to how regulation of the property sector did not keep pace with the market.

Shaikh Khaled Bin Zayed Al Nahyan, Chairman of Dubai-based Bin Zayed Group was also among others in the panel discussion. Shaikh Khaled spoke of the importance to Dubai's past and future success of the government's continued cherishing of innovation, as well as its dynamic and flexible policy making.

(via TopNews Arab Emirates. Contributed by Sadik Al Rumaithi)