A top Dubai official moved to assure investors that the emirate, hard hit by the financial crisis, was committed to meeting its financial obligations, one day after Dubai's ruler dismissed his finance chief.

The surprise dismissal of Nasser al-Shaikh as the emirate's finance head triggered questions among some investors as Dubai and its constellation of government-controlled companies effort to restructure and meet looming debt needs.

'The government is firmly committed to sustainable fiscal policies and to adopt actions that are appropriate for the current circumstances taking into account the scope of the global crisis, meeting Dubai's financial obligations and future development requirements,' said Mohammed al-Shaibani, aide to Dubai's ruler, in a statement issued late yesterday (May 19).

Al-Shaibani is director of the office of Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai and vice president and prime minister of the UAE, the Gulf confederation to which Dubai belongs.

Al-Shaibani expressed his support for the new finance director, Abdul-Rahman al-Saleh, as 'the right man to lead the next stage of managing the economic situation'.

Saleh previously held a position at Dubai's customs authority, a key body in the trade and tourism hub, known as home to the world's tallest building and man-made islands built in the shape of palm trees.

The timing of the surprise leadership switch underscores Dubai's delicate financial situation after the UAE central bank bailed out the emirate with a $10 billion bond programme. The emirate has said it has outstanding debt of around $80 billion.

Unlike many of its neighbours, Dubai has few energy resources or foreign investments to draw upon for revenue during the financial crisis.

The crisis has hit Dubai's highly exposed economy disproportionately hard due to its reliance on cyclical industries like trade, finance and tourism, and after its real estate bubble burst late last year.

The emirate is using the bailout proceeds to provide financing to its myriad of cash-strapped firms, some of whom are in arrears in paying contractors. The payouts have not been made fully public, leading to questions about which companies will receive the cash and who they will repay.

Dubai officials have said they aim to raise another $10 billion in a second bond issue through the market, making leadership changes and payout plans of keen interest to investors.

During his brief tenure, Al-Shaikh earned a measure of respect from investors as head of the department for his efforts to navigate the difficulties created in the former boom-town following a liquidity crunch and collapse in real estate markets.

In his new position, al-Shaikh will serve as an assistant to the director of the ruler's court for foreign affairs. He holds leadership or positions at a number of important Dubai companies. – Reuters