December 01, 2008	Monday	Zilhaj 2, 1429

DUBAI: The Dubai property giant behind such grandiose projects as a one-kilometre-tall tower and artifical palm-shaped islands said on Sunday it had fired 500 staff as the global economic crisis begins to bite in the booming desert city-state.

Government-controlled developer Nakheel, one of the biggest employers in Dubai, also said it would be scaling back work on some projects.

“Approximately 15 per cent of the total workforce, which amounts to 500 employees, was made redundant,” it said in a statement. The move is “a responsible action in light of the current global market conditions”. It is the largest job cut in the wake of the global financial meltdown to be announced in United Arab Emirates and in Dubai, a city of skyscrapers, opulent hotels and malls which hosts hundreds of thousands of westerners and Asian workers.

“We have the responsibility to adjust our short-term business plans to accommodate the current global environment,” said an unnamed spokesperson quoted in the statement.

“The redundancies are indeed regrettable, but a necessity dictated by operational requirements which are in turn dependent on demand.” Earlier this month, Damac Group, owner of the region’s largest private developer Damac Properties, said it cut 200 jobs or 2.5 per cent of its workforce.

Nakheel is developing several iconic projects in Dubai, including three palm-shaped man-made islands, only one of which is completed, and a cluster of islands shaped like a map of the world.

It also announced last month a jaw-dropping plan to build a one-kilometre-high tower which would overshadow the still unfinished Burj Dubai, already the world’s tallest.

Nakheel also develops residential and commercial property, sales of which thrived after the sector was opened to foreign investors several years ago.

Last week, Nakheel jointly hosted a star-studded $20-million- bash to celebrate the opening of the Atlantis Hotel on its Jumeirah Palm island.

Top Dubai officials insist the emirate’s real estate sector a key engine of economic growth in recent years will weather the global crisis, but investors appear to have lost confidence in the market which was until recently a great magnet for investments.

Mohammad Alabbar, head of Dubai’s Advisory Council formed to deal with the impact of the financial meltdown, hinted last week that major developers will use their control over supply to curb an increasingly clear drop in property prices.

“Our priority is to manage supply in the real estate market to ensure equilibrium,” he said.

There are still fears for the future of Dubai’s economy after a double-digit growth registered in the past few years, with concern rising over accumulated foreign debt amid the global credit crunch.—AFP