WORLD PROPERTY CHANNEL ®

(DUBAI, UAE) -- When Dubai's stock exchange closed Thursday for the weekend, it was down to its lowest point since August 2004. Leading developers including Emaar, the biggest, contributed to the tumble that has been going on for several months.

Burj Dubai

But while the world and some local investors may have doubts about Dubai's ability to thrive in the new tight credit environment, the director-general of the Dubai Department of Finance was building confidence in an interview published in the UAE daily newspaper Gulf News today.

"No doubt the new environment is challenging. But we are in absolute control of our destiny," Nasser al-Shaikh said. According to al-Shaikh, Dubai's sovereign debt is $10 billion while the debt of companies affiliated to the Dubai government is about $70 billion.

He added, "We are confident that we will meet our obligations when it comes to government and private company debts. It will be a mixture of paying off and rolling over existing debts."

The Dubai Mall under construction

Dubai is preparing to announce a record budget early next year, al-Shaikh said.  In 2008 the emirate's budget was nearly $37 billion.

"I cannot disclose the size of next year's budget," he said, "but it will certainly witness an increase over the budget of 2008."

While some plans may be scaled back, "there will be an increase in spending on infrastructure projects, including completion of the Metro project, expansion of the airport and construction of a new airport," al-Shaikh explained.