Economy
From The Report: Dubai 2016
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Dubai’s economy is the result of a decades-long pursuit of diversification which has brought evolution into a variety of offerings – including services, finance and trade – that has made the emirate a cross-continental meeting point for commerce. Dubai has felt the impact of the fall in crude prices since mid-2014, but it now has sectors that can thrive regardless of oil market conditions. Since the global financial crisis the emirate’s economic narrative has been framed by its recovery efforts. Despite little direct exposure to the toxic assets that triggered the meltdown, Dubai experienced external shocks as the global economy suffered. However, it has successfully shifted the focus from concerns about the past towards plans for the future. As legacy debts are repaid or restructured new economic potential is emerging, helping to underpin fresh analyses and projections. Dubai will host World Expo 2020, for example, and preparation for this six-month-long series of events is a story analysts are now focused on.

This chapter contains interviews with Obaid Humaid Al Tayer, Minister of State for Financial Affairs; Hamad Buamim, President and CEO, Dubai Chamber; Amina Al Rustamani, Group CEO, TECOM Group; and a viewpoint from Jim Yong Kim, President, World Bank Group.

Articles from this Chapter

Overview

The next step: Efforts to diversify the economy have helped the emirate weather challenges
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Dubai’s economy is the result of a decades-long pursuit of diversification which has brought evolution into a variety of offerings, featuring services, finance, trade and global connectivity that has made the emirate a cross-continental meeting point for commerce. Dubai has felt the impact of the fall in crude prices since mid-2014, but it now has sectors that can thrive regardless of oil market conditions. Since the global financial crisis the emirate’s economic narrative has been framed by…

Interview

Continuity and change: OBG talks to Obaid Humaid Al Tayer, Minister of State for Financial Affairs
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Interview:Obaid Humaid Al Tayer What can be done in policy terms to fund upcoming mega-projects and deal with the risks low oil prices pose to the UAE’s federal budget? OBAID HUMAID AL TAYER: The UAE Ministry of Finance has implemented a solid diversification policy in order to expand federal government resources. The ministry conducts studies into the expected income from various revenue sources, to determine what to remove, modify and implement in regards to government service fees. The…

Interview

Ideally positioned: OBG talks to Hamad Buamim, President and CEO, Dubai Chamber
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Interview:Hamad Buamim What is the outlook for regional trade relations? HAMAD BUAMIM: Our main trading partners are in the GCC and this should remain the case in the years to come. Over the past 15 years, GCC exports by Dubai Chamber members have risen 10-fold, from Dh17bn ($4.63bn) in 1998 to Dh180bn ($49bn) in 2014. The GCC Customs Union, an agreement that became fully operational in January 2015, is important for Dubai to cement its position as an international trade and business gateway…

Analysis

Loan rangers: Despite global challenges, the emirate has been able to manage debt
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The economic narrative of Dubai has shifted in recent years, from passage through its first financial crisis as a major player in the global economy to a more forward-looking version of itself. Investors are increasingly focused on the future. That means thinking about opportunities related to Dubai’s plans to host World Expo 2020, its expected resilience to low oil prices and its move to add more innovation-based activity to its diversified economy. In the background, however, Dubai’s government,…

Viewpoint

The best way forward: Jim Yong Kim, President, World Bank Group, on inclusive governance in the MENA region
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In 2015, for the first time, the rate of extreme poverty was projected to fall below 10%. Our research and experience tells us that three things have been critical to reducing poverty and boosting prosperity: inclusive economic growth, investments in health and education, and insuring against risks that can plunge the vulnerable into poverty – risks like unemployment, illness, climate change and pandemics. Shaping governments so they deliver on these responsibilities is our shared responsibility…

Analysis

Prime position: The deal with Iran is creating new opportunities
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Dubai’s position as a centre of trade is likely to pay off again in the next few years as the deal between Iran and Western powers results in the reintegration of the country into the global economy. Located just across the Gulf, Dubai is already a conduit for goods in and out of Iran. The question now in the emirate is what opportunities will the opening create. Discussions are focused on which impacts could be immediate and which long term, what sectors would be most affected and what to expect…

Interview

Innovative growth: OBG talks to Amina Al Rustamani, Group CEO, TECOM Group
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Interview:Amina Al Rustamani What initiatives are in place to encourage entrepreneurship and fund innovative business ideas? AMINA AL RUSTAMANI: We are very active in this space, and nurturing entrepreneurship and innovation is core to our strategy, in line with the government’s vision for a diversified and innovation-led economy. Historically, we have always offered start-ups, entrepreneurs and freelancers space through our business centres, workshops and networking opportunities. This…

Analysis

In tandem: A new law will mean opportunities for public-private cooperation
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The eagerly anticipated public-private partnership (PPP) law came into force in November 2015, ushering in what could be a new era in infrastructure development. The idea is to empower investors, both foreign and domestic, to take a bigger long-term role in financing and operating large projects. The law is expected to have an immediate impact in several key sectors. Infrastructure is a primary one, with PPPs considered a likely approach for expanding Al Maktoum International Airport, extending the…

Analysis

Alternative route: New realities have led to policies to increase tax revenues
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With crude oil prices low and seen as unlikely to return to levels above $100 in the next few years, the matter of taxes has been pushed to the forefront of debate in Dubai. The establishment of some form of general taxation has been one of the longest-running political issues in the emirate, the UAE and the wider region. With public revenues lower across the Arabian Peninsula given the fall in crude prices, increased taxation has finally become a reality. The GCC countries are working towards implementing…

Analysis

Revenue raiser: Value-added tax is set to be introduced across the region
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After years of speculation, an agreement signed in February 2016 has brought clarity regarding the introduction of value-added tax (VAT) to Dubai. The UAE, along with states around the Gulf, will begin to implement VAT from January 1, 2018, and will thereafter have a full year to fully establish the new tax. The precise timing of the roll-out is a matter for each individual country, and the detailed framework, which will reveal exactly which goods and services will be subject to VAT, is expected…