Dubai’s economy shows no signs of slowing even as world ‘contends with uncertainty, subdued growth’
- Dubai’s government has always been very optimistic and ambitious regarding the future of the emirate, says one expert
Dubai appears to be going from strength to strength as the city focuses unwaveringly on its D33 agenda, which aims to double the size of the emirate’s economy over the next decade, and reinforce its position amongst the world’s top global cities.
Just last week, Abdul Aziz Abdulla Al Ghurair, Chairman of Dubai Chambers, predicted that Dubai’s economy would grow by around 5 percent in 2024.
At the same time, the Chambers revealed that 67,222 new companies became members in 2023 - the highest number during any year in its history, representing year-over-year growth of 20 percent.
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This milestone “underscores Dubai’s resilience and attractiveness as a business hub,” and “reflects the emirate’s proactive efforts in fostering an environment that enables businesses to thrive and contribute to economic growth” Dr Ashraf Gamal El Din, CEO of Hawkamah, a corporate governance institute based in the Dubai International Financial Centre (DIFC), told Business Recorder.
He added that this “not only demonstrates Dubai’s dynamism but also highlights the pivotal role of corporate governance in driving sustainable growth and fostering investor confidence.”
George Pavel, General Manager at Capex.com Middle East, echoed the sentiment. He told Business Recorder the large number of new companies at the Chamber demonstrated “the thriving business ecosystem and the confidence in Dubai’s future as the city successfully attracts businesses, talent, and innovation.”
Looking forward, Gamal El Din said Dubai must continue to focus on robust corporate governance practices to ensure long-term viability and success of these new member companies.
Just a look DIFC itself, where Hawkamah is based, is telling when it comes to Dubai’s progress: it saw 34% growth in new registrations last year, helped by demand from companies in a broad range of sectors and industries such as fintech. It posted a net profit of $203 million in 2023, up about 45% year on year, while combined revenue rose 23% to $352 million.
Meanwhile, Dubai’s non-oil trade reached Dh2 trillion in 2023, a whole year ahead of schedule, and according to a report in Khaleej Times, the city has set a new trade target of achieving Dh25.6 trillion over the next decade.
Commenting on this, Pavel said “Dubai’s government has always been very optimistic and ambitious regarding the future of the emirate and the development of its economy, social environment, and infrastructure. As such, it continues to set high targets for the economy to achieve.
“The trade target could help boost Dubai’s status as a global hub and further its ambitions in other aspect.”
He said that Dubai’s ability to develop all sectors and attract talent has helped build a strong basis for future growth and further diversification of the economy, and that the city “has effectively continued to benefit from strong economic conditions at a time when the rest of the world was contending with uncertainty and subdued growth.”
As Pavel pointed out, Dubai’s economy appears to stand in stark contrast to some other top global hubs: according to Forbes, both Japan and the UK recently said their economies likely weakened during the final three months of 2023.
Meanwhile, the World Bank has said “the global economy is set to rack up a sorry record by the end of 2024 — the slowest half-decade of GDP growth in 30 years” while the World Trade Organization has warned that war, uncertainty and instability are weighing down the global economy.
Pavel believes Dubai’s lofty goals still remain attainable thanks to the dynamic nature of its economic environment and some “smart strategies” it has put in place.
One of these strategies is undeniably easing restrictions on its 10 year golden visa. A Bloomberg report recently noted that by making the golden visa easier to get and with attractive benefits “policymakers wanted to help Dubai shed its reputation of being a transient city by attracting expatriates and encouraging some of them to set up businesses. That seems to have paid off.”
That’s not all though. Some other successful policies include it no longer being necessary for companies to have a majority local partner and the working week changing from Monday-Friday.
Last month, the government of Dubai announced the gulf city had registered a 3.3% rise in real GDP in the first nine months of 2023.
What perhaps is key to its success is “harmonious collaboration between all of Dubai’s economic stakeholders, including its public and private sectors,” as put by its Crown Prince, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum.
The press release pointed out that during the same period, real estate soared by 4%, financial and insurance activities surged 2.7% and manufacturing saw a 2.2% surge.
According to Hadi Badri, CEO of the Dubai Economic Development Corporation, Dubai Department of Economy and Tourism: “Dubai’s economic performance is a clear reflection of the effective policies and initiatives that we have implemented as part of our long-term development roadmap.” It is clear that the government has set its sights firmly on achieving D33 and has no plans of slowing down even beyond that.
Copyright Business Recorder, 2024
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