Dubai as a city has changed dramatically over the past few years, becoming a major business centre with a more dynamic and diversified economy. It enjoys a strategic location and serves as the biggest re-exporting centre in the Middle-East. Dubai is the currently the second richest Emirate in the UAE after Abu Dhabi. Most believe that the revenues for Dubai come primarily from oil but in fact it only uses moderate amount of oil reserves to generate infrastructure for trade, manufacturing, tourism in order to build up Dubai’s economy. About 95% of the Dubai’s GDP is generated from non-oil based sectors. So far oil has accounted for less than one percent of Dubai’s GDP and tourism to produce 20% of the GDP. These figures explain why Dubai has had to become a more dynamic and diversified economy in order to survive the decay of fossil fuels.
Dubai Economy- Current Scenario
Dubai’s economy is expected to expand at a faster pace this year outgrowing in levels achieved in 2018, despite headwinds from a global economic slowdown, as the emirate continues to implements policy initiatives and investments measures under its 50-year Charter. Gross Domestic Product is expected to grow 2.1% in 2019, further accelerating to 3.8% and in 2020 and moderating slightly to 2.8 per cent in the following year, according to Dubai Economic Department, the government body that sets and implements the government’s economic agenda.
Dubai Tourism- Going Back In Time
In the early 1990s there were only handful of hotels available for tourists and Dubai never had the oil revenues like Abu Dhabi so something had to change. The Burj Al project in 1994 gave hope to the economy as a long term strategy, an ambition to become the world’s top tourist destination. Now, being the top tourist destination in the UAE, Dubai has seen a tremendous change in its economy in the past 20 years or so.
Dubai as an Investment Location- The What’s and Why’s
The economy of Dubai enjoys a competitive combination of cost, market and environmental advantages that create an ideal and attractive investment climate for local and expatriate businesses alike. The benefits not only rank Dubai as the Arabian Gulf’s leading multi-purpose business centre and regional hub city, but they also place it at the forefront of the globe’s dynamic and emerging market economies.
Not just this, there are other factors like Dubai’s warm and welcoming people, world-class facilities and infrastructure and farsighted, open and liberal economies policies making the country a preferred destination of investment and business setup. In more recent years, the Emirate has become a major venue for a number of growing, profitable industries and activities:
- Meetings, conferences, exhibitions
- Corporate regional headquarters
- Regional transport, distribution and logistics center
- Banking, finance and insurance
- Business and industrial consulting
- Information and Communications Technology
- Light and medium manufacturing
Committing to a progressive vision of itself, keen to diversify its economy and diminish its reliance upon shrinking oil revenues, Dubai has begun to develop into the Arabian Gulf’s premier international business center.
A Future Facing Economy
As said above, the country’s commitment to economic growth and receptivity to different cultural trends and practices have energized new ways of doing business and attracting investment. Fusing of strategic ideas about economic development – such as the creation of ‘Free Zones’, which group entrepreneurs in the same sector together in the same location – with private sector energies, Dubai has been able to move towards the goals outlined in its 2021 Strategic Plan. The constellation of forces that underpin Dubai’s economic success continues to attract the attention of foreign investors. They see the emirate as a key player in global trade and finance and as a centre of innovation for entrepreneurs.
Dubai Expo 2020
The Emirate is preparing to host the most awaited Expo 2020 and is heavily investing on infrastructure ahead of the global fair. According to the EY study, the contribution of Expo 2020 Dubai to the Emirates GPD over the period of 2013-2030 has been estimated at Dh122bn. During the period 2013 to April 2021, the construction and delivery of the Expo site is expected to contribute Dh38bn with direct benefits to the construction, business and financial services, transport, storage and communication sectors. The event itself is expected to add another Dh23bn to the emirate’s GDP. Hence, the expectations for this 6 month event have been high from the very start as it will give the major boost needed for Dubai’s economy.
Whatever the expectations, there is a firm belief that the Dubai as well as the whole UAE is setting and implementing its plans, and is carving its future with strong determination and relentlessness; it does not know the recession and does not believe in it, but believes that its place is at the forefront, leading the way for all.