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 strategy in 2007 to support continued economic growth and deliver on specific social goals. The Dubai Strategic Plan 2015 (DSP 2015) was drafted to present a unified government vision that prioritised key areas of development.
FUTURE VISION: DSP 2015 is part of a broader national development agenda that has since been articulated in the UAE Vision 2021. UAE Vision 2021 seeks to transform the UAE into “one of the best countries in the world by 2021”. The plan is notable for its major themes that emphasise unity between all the emirates and highlights social goals to preserve Emirati identity. The very first objective states: “Ambitious and responsible Emiratis will successfully carve out their future, actively engaging in an evolving socio-economic environment, and drawing on their strong families and communities, moderate Islamic values, and deep-rooted heritage to build a vibrant and well-knit society.”
UAE Vision 2021 also seeks to shift the UAE onto a path of economic diversification based on a highly skilled national population. The third goal of the strategy states: “A diversified and flexible knowledge-based economy will be powered by skilled Emiratis and strengthened by world-class talent to ensure long-term prosperity for the UAE.” All seven emirates have their own strategies to meet these outlined aims.
Within this framework, DSP 2015 targets five veins. These are economic development, social development, infrastructure development, security and justice, and government excellence. The strategy lays out specific indicators for success, with specific growth targets. Segments prioritised for contributing to development include tourism, trade and logistics, construction and real estate, and financial goods and services.
REVISED STRATEGY: Following the dramatic shifts in the economy due to the global financial crisis, development goals under DSP 2015 are being revised to set more realistic targets. In May 2012 the Department of Economic Development (DED) reduced the prior goal of 11% annual economic growth to a tentative new target of 4.5%, but a new finalised strategy has yet to be released. It is expected that the revised approach will also add elements to stabilise Dubai’s financial system and bolster the domestic jobs market.
KEY FACTORS: DSP 2015 identifies seven enabling factors for sustaining growth in the targeted sectors. These are: human capital; productivity; science, technology and innovation; the cost of doing business; quality of life; economic policy; and laws and regulations.
Infrastructure is identified as a critical component. Dubai has an integrated road, air and sea transport systems that link the emirate with the rest of the world, and it recently invested in building a metro rail that connects the entire length of the city, transporting over 184m passengers since its inauguration. Dubai is also investing in building a strong information and communications technology network to help businesses and households access and share data at high speeds. These investments contribute to Dubai’s business-friendly environment and are important in sustaining growth.
Promoting social development is equally important to DSP 2015. The strategy calls for investment into health, education and social welfare, and improving work environments. Delivering these services requires a leveraging of private sector investments, as is already being done with health and education, and the government is now focused on improving regulation and oversight and streamlining sector planning.
Improvements in security and justice seek to preserve human rights, ensure equal access to the justice system, protect public health and generally secure the safety of all UAE nationals, residents and visitors. DSP 2015 calls for using technology to streamline judicial processes and facilitate an efficient criminal justice system. This also applies to boosting efficiency and transparency. The DED, for example, is testing a faster licensing process whereby businesses can instantly get a 120-day trade licence to start to operate while full licences are processed. Additionally, according to Ahmed Saeed bin Hazeem Al Suwaidi, director-general at Dubai Courts, “Legislation should ensure that investors are clear as to the legal risks they are taking and can therefore assess expected financial returns. That is why it is essential we maintain the highest international standards so that our global efficiency ranking for a legal framework in settling disputes continues to improve.”
The ultimate goal for public sector planning is to link performance and budget targets to results. DSP 2015 calls for better planning to drive innovation and to improve productivity by 4% per year.
REINFORCED STRATEGY: The DED has been put in charge of revising and updating DSP 2015, with a particular focus on reassessing the economic development pillar. Goals of the revised plan will take into account the global investment climate and will outline a more sustainable development path for Dubai. The DED highlights that, “There is an urgent necessity to re-visit the economic pillar of DSP 2015 with the twin objectives of: 1) shielding Dubai from the current [ economic] storm and ensuring that its past achievements are safeguarded; and 2) defining a new, non-inflationary and sustainable growth path that is commensurate with Dubai’s socio-economic imperatives.”
The revised plan is being drafted as the 2020 Economic Strategy Plan of Dubai (ESP 2020). The DED is also analysing new avenues for economic growth. Small and medium-sized enterprises (SMEs) are at the top of this list as they form the vast majority of companies located in Dubai, representing 95% of all firms in the UAE. Under ESP 2020, the government is expected to initiate specific programmes to support SMEs, including financing mechanisms to improve access to capital and business development services to help small businesses take products and services to the market. The DED indicates that, “the SME focus will further enable our economy to move from capital- and labour-intensive [products and services] to a more innovation and technology-driven economy underpinned by a high degree of efficiencies and levels of productivity.”
DSP 2015 and its pending update are ambitious. The government has much to do in building systems and processes and implementing reforms that can support the outcomes identified in the plan. Dubai’s greatest asset is a comparatively nimble public sector that can respond to changing circumstances and adopt appropriate policy quickly and efficiently. The past four years have been focused on efforts to address the effects of the financial crisis, and the government can now shift this emphasis to implementing its longer-term vision.
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