Dubai announces $8.7 trillion economic plan to boost trade and investment

Dubai is enjoying its hottest property market in years, with sales in the sector up 45% year on year in April and 51% in May, according to the Dubai Land Department.

DUBAI, United Arab Emirates — Dubai on Wednesday announced a mammoth $8.7 trillion economic plan for the next decade, aimed at boosting trade, foreign investment and its place on the map as a global hub.

“Dubai will rank among the top four global financial centers with an increase in FDI to over AED650 billion ($177 billion) over the next decade,” Sheikh Mohammed bin Rashid al Maktoum, the leader, tweeted. from Dubai. “Over 300,000 global investors are helping to make Dubai the fastest growing global city.”

The message outlined some of the 100 “future transformation projects” included in the 10-year economic roadmap. These include boosting foreign trade to 25.6 trillion dirhams from 14.2 trillion dirhams over the past decade, almost doubling annual foreign direct investment to 60 billion dirhams per year and increasing public spending from 512 billion dirhams over the past decade to 700 billion over the next.

The plan also aims to increase private sector investment from 790 billion dirhams over the past decade to 1 trillion over the next and has pledged 100 billion dirhams in annual contributions to the economy through transformation projects. digital.

Dubai aims to double the size of its economy over the next decade and become one of the “top 3 economic cities in the world”, the Sheikh’s tweet read.

The news comes just days after Dubai announced the end of its 30% alcohol tax, a move that appears to have been taken to boost tourism and business. In recent years, the emirate – which is the glitzy commercial and tourist capital of the oil-rich United Arab Emirates – has rolled out a series of reforms aimed at making it more attractive for foreigners and international businesses to live and invest.

The sheer scale of the city’s economic goals may arouse some skepticism, but Dubai’s financial experts believe they are achievable.

“It’s ambitious, but there’s no reason to doubt these goals given Dubai’s economic history and track record of reforms,” ​​Tarek Fadlallah, CEO of Nomura Asset Management for the Middle, told CNBC. -East.

Karim Jetha, chief investment officer of Dubai-based asset management firm Longdean Capital, noted the competition angle: neighboring Saudi Arabia is itself investing billions to shed its closed and conservative image and attract tourism and foreign investment.

“The numbers look ambitious, but Dubai has never been short of ambition,” Jetha said. “As neighboring countries like Saudi Arabia open up and seek to attract more regional businesses, Dubai is aiming higher and seeking to become a global hub.”

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Dubai has long been a regional hub for the Middle East, but has recently made changes to become more integrated with other parts of the world. It’s home to a 90% diverse expat population and has for many years offered lifestyles on par with the western world – plus beaches, no income taxes and one of the lowest crime rates in the world. world.

The United Arab Emirates also recently changed its Islamic weekend from Friday-Saturday to Western weekend from Saturday-Sunday, to be in line with much of the rest of the world, and started offering a visa program of remote worker during the coronavirus pandemic as more and more people adopted a remote working lifestyle.

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An early rollout of vaccines for its entire population in early 2021 has allowed Dubai to return to “normal life” during the pandemic much sooner than most other places, attracting waves of new residents and visitors. Its real estate sector is currently booming and Dubai was recently ranked among the top ten cities in the world for expats to live and work in.

As much of the world faces a bleak and bearish 2023, with forecasts of widespread recessions, high energy costs and slow economic growth, Gulf states are generally poised to prosper, says Nomura’s Fadlallah – backed by persistently high oil prices and driven by a desire to diversify their economies.

“I think the GCC is going through a golden age,” Fadlallah said, referring to the Gulf Cooperation Council states. Its “economies have never been bigger, stronger, more diversified and more integrated into the global economy”.

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