Economy of Dubai
The city of Dubai loves breaking records. This biggest city of UAE has the highest skyscraper in the world (Burj Khalifa), the largest shopping centre in the world (Dubai Mall), the highest hotel in the world (Marriott Marquise) and many other exclusive buildings and property items.
History: from crude oil to tourism
In 1972 an independent state, the UAE, was established. With the formation of the new state its government decided to implement urgent changes in the development of the UAE economy. For this purpose during 1973-81 on the initiative of OPEC, whose members included Arab Emirates, prices on crude oil essentially increased. As a result of implemented changes, the development of economy in the UAE and other crude oil exporting countries picked up speed, which contributed to investing the revenue, gained from crude oil sales, in various branches of economy.
From 1990 to 2003 the UAE economy undergoes significant changes. Having faced with unstable situation on world crude oil market, the government of the country made a decision on national economy diversification, diversification of external commerce geography and restructuring of export commodity structure. Today UAE economy successfully copes with stated objectives, that`s why it`s now considered to be one of the richest countries in the world.
Each 55th citizen of the country is a millionaire, while young couple gets 100 000$ and a plot of land from the state. It should be noted that expat workforce influx plays a key role in the UAE economic progress.
Tourism industry, which started to grow in 80th, is also of great concern for country’s budget. The industry achieved a high level of advance.
NEW INDEX FOR TRACKING OF EMIRATE`S ECONOMY
Published by Emirates NBD bank, Dubai business index is an integrated part of Dubai economy index which indicates the rate of business activity as well as the unemployment level. In April 2015 this index reached 57,2 rate, lower than in March – 60,6. This index “is still much higher than 50,0 mark, which marks the development from contraction” – says report Emirates NBD.
Main economist and head research department of Emirates NBD bank Tim Fox says: “We are monitoring small contraction, but the result of global research gives evidence of economy expansion for the first time during several consecutive months of this year. Although the prices on crude oil are decreasing this year, business sector remains sustainable; this proves the real strength of Dubai economy.
GDP per capita in Dubai for last 6 years has never expended as quickly as now. Economy of Dubai emirate does not depend on crude oil now, as it is diversified and includes construction branch, real estate market, tourism branch, financial system as well as wholesale and retail sales.
The data Centre of Dubai Statistics shows GDP growth by 4,9% in the first half year of 2013, which is more than 4% higher than for similar period last year. In 2014 Dubai ranked 5th place among the world cities with the highest economic indicators.
WTTC report says that the amount of investment in tourism branch in 2013 was $5,71 billion, or 6,2% from aggregate investments in all emirate branches. It`s estimated that in 2014 its ratio must grow by 9,7%, while in future, according to forecasts, it will continue to grow by 5,1% annually until the beginning of the next decade and will attain 10,29$ billion by 2020 (7,3% from the overall volume of GDP).
Dubai came into the 5th largest economies among cities in the Middle East during 2103-14, ranking the due first place with GDP growth by 4,5% and increase of employment level by 4,7% during 2013-14.
The profitability of investment into real estate has one of the highest indexes in the world. In 2015 13% of emirate budget was designed to modernization of Dubai infrastructure. The real estate of Dubai in 2015 still was in excessive demand. Total amount of funds, invested by capital providers in emirate`s real property, exceeded 53 billion Dhs. According to statistics of Land Department in Dubai, transactions were made by investors from 142 countries in the world; however Russians together with investors from India, Pakistan, Great Britain, Canada, China, the USA and France invested about 30 billion Dhs in the real estate in Dubai. Such high demand of emirate`s property in investors from all the world once again gives evidence of investors` growing trust in the market. Meanwhile international rating agencies are very optimistic about further economic development of the region where the growth of main financial indexes can be observed year over year. This shows that real estate market in Dubai is a promising market for rentable and safe capital investment.
11th INTERNATIONAL EXHIBITION OF REAL ESTATE IN DUBAI (INTERNATIONAL PROPERTY SHOW) – IPS 2015
The revenue from investment in property has a great impact on GDP of emirate. That`s why regular exhibitions in Dubai are held to entice investors from all the world.
IPS – an annual exhibition, which is visited mostly by local and global companies related to sales of property to investors. The exhibition is accredited by RERA (Dubai Real Estate Regulatory Authority – Control Department of Real Estate in Dubai) and is the largest event in the field of real estate sales in Dubai.
According to official statistics of Dubai Land Department (DLD) for the first quarter 2015, the total cost of Dubai property is 65 billion Dhs. Everybody is preparing for world exhibition. The expected income gives many investors no peace. So if you are willing to hit the jackpot in this investment option – invest in the real estate of Dubai.
Jones Day experts say that upcoming event will attract about 23$ billion in emirate, which makes 24,4% of the current GDP of Dubai during the period from 2015 to 2021. You can learn more about the Real estate and investment in property as a strong option. The details about the World exhibition EXPO 2020 – HERE.
What economic organizations does Dubai belong?
OPEC (The Organization of the Petroleum Exporting Countries) is the international inter-governmental organization, built by oil-producing countries in order to strengthen crude oil prices. OPEC includes 12 countries: Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Libya, the United Arab Emirates, Algeria, Nigeria, Ecuador and Angola.
World Trade Organization is an international organization responsible for the development and implementation of new trade agreements, monitoring compliance of member organizations with all agreements signed by most countries and ratified by their parliaments. The WTO includes 161 States.
Cooperation Council for the Arab States of the Gulf is a regional sheltered market consisting only of 6 countries: Bahrain, Qatar, Kuwait, UAE, Saudi Arabia (except Iraq). Jordan and Morocco were also invited to join the community. The main purpose of organization is coordination, collaboration and integration in all economic, social and cultural affairs. The UAE were the first CCASG country that is going to abolish state subsidies on fuel. Thus, the petrol`s price will increase almost by 25%, but at the end of August the prices will be revised.
PLANS OF EMIRATE DUBAI DEVELOPMENT AFTER EXPO 2020
Six main concepts describing Dubai after 2021, are component parts of a plan:
- The city of happy, creative and independent people;
- Harmonious, equal society;
- Attractive for life, work and rest, high-technology and eco-friendly city;
- One of the world economy centers;
- Innovative and effective government.
According to the plan, work on which practically began some time ago, before the end of its formulation, the main purpose of Dubai modernization is taking care of human happiness and well-being. The ruler of Dubai encouraged all governmental organizations to bring own strategic plans in line with general plan and work in unison on its implementation.
Dubai citizens and investors are wondering what Dubai will face after explosive growth of activity resulting from preparations for carrying out World exhibition EXPO 2020. The plan, declared by vice president, prime minister of UAE and the ruler of Dubai Mohammed bin Rashid Al Maktoum, answers all these questions.
People go to Dubai because of the absence of taxes and bureaucracy while running a business, as well as because of the quiet lifestyle and good climate. Many companies make a decision to move its head office to Dubai and do not regret of what was done. Dubai ranked first place in the world in terms of security and the second in inflow of investments!
Owing to the geographical position of the United Arab Emirates, business in UAE can be conducted with Asia, Europe and Africa. Moreover, fast moving development of infrastructure in UAE contributes to business growth in the country. Highways, ports, airports and other points of communication are constantly recreated. Thus, the paradise for business was built up in the UAE!
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