Economy
From The Report: Dubai 2013
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After weathering the effects of the global financial crisis, Dubai is swinging back toward a more guarded optimism as it regains its status among regional and international economies. In 2012 GDP was expected to reach $386bn, and the IMF estimates that GDP will continue growing, reaching $450bn in 2017. However, Dubai’s economy is currently operating at about 15% of capacity, implying that economic gains can be made by increasing efficiency and productivity. While the emirate still faces challenges relating to its exposure to regional and global volatility, efforts to strengthen the regulatory framework and improve oversight of GREs should help it to better withstand future turmoil in the global economy. This chapter includes interviews with Ahmad bin Byat, CEO, Dubai Holding; Abdulaziz Al Ghurair, Chairman, Al Ghurair Group; Hamad Buamim, Director-General, Dubai Chamber of Commerce and Industry; and Anand Sharma, Indian Minister of Commerce & Industry.

Articles from this Chapter

Overview

From crisis to recovery: Vital reforms have been put in place to stabilise the economy
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The last decades of rapid economic growth in Dubai are a well-known phenomenon. Equally well known are the economic shocks the emirate witnessed in wake of the global financial crisis. The mood in Dubai, however, is swinging back towards a more guarded optimism as it regains its status among regional and international economies. Dubai is still exposed to developments in global financial markets, but the federal government and Dubai’s authorities have taken concrete steps towards stabilising…

Analysis

Back on track: New measures to guard against future turmoil in the global economy
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The global financial crisis hit Dubai hard. Local government-backed investment companies were overextended and had taken on a high level of risk during the years of readily available capital from international banks, many of which had assumed the government would guarantee every deal. Exact figures vary, but estimates suggest that Dubai firms borrowed more than $80bn to finance the construction surge in the years leading up to the crisis. This infusion of funding proved to be disastrous when…

Interview

OBG talks to Ahmad bin Byat, CEO, Dubai Holding
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Interview: Ahmad bin Byat How are government-related entities (GREs) looking to improve support for economic diversification in the current global economic environment? AHMAD BIN BYAT: Dubai’s GREs are moving away from investing in non-core sectors or industries that do not complement the strength of Dubai. The emirate’s economic diversification strategy was key to surpassing the economic crisis. GREs have focused their investments on a variety of sectors in Dubai, which include infrastructure,…

Interview

Strengthening its position: OBG talks to Abdulaziz Al Ghurair, Chairman, Al Ghurair Group
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Interview: Abdulaziz Al Ghurair How would you evaluate central bank policies in regards to personal loans and their potential impact on the wider economy, and what else can be done to protect the financial system from defaults? ABDULAZIZ AL GHURAIR: The policies of the central bank have been fairly prudent, and are required to ensure the health of retail banking in the country. I am a strong advocate of a free economy and adequate market discipline. Having said that, I also agree that regulators…

Analysis

Leveraging private capital: Attracting investment with the development of free zones
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A business-friendly environment and prime location have helped Dubai maintain a long-standing reputation a centre for trade. Building on a historical model that gave tax breaks to pearl traders, the emirate has attracted foreign investment by developing free zones that appeal to investors and businesses alike. Dubai’s free zones generally offer a tax-free environment coupled with modern infrastructure to facilitate manufacturing, trade and export of goods at a competitive cost. SECTOR FULL…

Interview

OBG talks to Hamad Buamim, Director-General, Dubai Chamber of Commerce and Industry
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Interview: Hamad Buamim Which sectors will be targeted for development as part of Dubai’s economic diversification plans? HAMAD BUAMIM: The primary driver behind Dubai’s economic prosperity has been the strategy of generating new business opportunities through diversification. Specifically, the emirate has been focused on the trade, tourism and logistics sectors, supported by its well-developed infrastructure and its growing reputation as a centre for international business. These sectors,…

Interview

Key enablers: OBG talks to Anand Sharma, Indian Minister of Commerce & Industry
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Interview: Anand Sharma Which of India’s economic sectors offer the most potential for Emirati investment? ANAND SHARMA: The UAE is the 10th largest investor in India, with foreign direct investment (FDI) equity inflows from April 2000 to May 2012 standing at $2.23bn, or about 1.37% of total FDI equity inflows into the country during that period. The FDI into India is primarily focused on power, metallurgical industries, the services sector, construction activities, and housing and real estate. If…

Analysis

Specific goals: The medium-term plan prioritises key areas for development
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As one of the fastest-growing economies in the world in the early 2000s, the emirate’s GDP grew by 18% between 2006 and 2007 alone, according to the Dubai Statistics Centre. The biggest achievement during this period, however, was the successful diversification of the economy away from oil. While the government was the main driving force behind this growth, Dubai’s strategy depended on the active participation of the private sector. Building on this progress, the government developed a medium-term…

Analysis

Income breakdown: A look at the government’s main revenue streams
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Total government revenues for Dubai have quadrupled from Dh10bn ($2.7bn) in 2003 to an estimated Dh42bn ($11.4bn) in 2011, according to the IMF. The 2011 figures include an estimated Dh10bn ($2.7bn) in cash transfers from Abu Dhabi. Expenditures have been traditionally balanced to control the budget deficit, but the financial crisis in 2008 prompted the need for economic stimulus. The year 2009 saw the largest budget deficit of the decade, when the government created the multibillion-dollar Dubai…