The Report: Dubai 2019
Near-term sentiment is on the rise amongst Dubai’s business leaders, with the IMF forecasting a healthy GDP growth rate of 4.2% in 2019 for the emirate. While not as exposed as some of its regional neighbours to the effects of fluctuating commodities prices in recent times, Dubai nevertheless stands to benefit from the knock-on effects of higher prices over the last year.
Country Profile
Covering a total area of 83,600 sq km, the UAE borders Saudi Arabia to the west and south and Oman to the east. The country’s coastline stretches 1318 km from the south-eastern shore of the Gulf, nearly reaching the Strait of Hor¬muz in the north. Most of the country is situated along the Gulf. By area, Dubai is the second largest of the emir¬ates behind Abu Dhabi, covering around 4110 sq km in total. A series of land reclamation projects beginning in the early 1990s increased the emirate’s geographical area by 200 sq km and also contrib¬uted to an expansion of its coastline. This chapter contains a viewpoint from Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai; President, Financial Audit Authority; and Chairman, Dubai International Financial Centre.
Explore chapterEconomy
Dubai is the second-largest of the seven emirates that comprise the UAE in terms of economic size, and the main driver of economic diversity in the country. Its tourism, logistics, manufacturing and services sectors provide opportunities for growth beyond oil and gas, the industry upon which many economies in the region are dependent. At the country level hydrocarbons account for 30% of GDP and oil exports for less than 40% of revenues. Economic development programmes for the emirate have been designed to leverage its strategic location between Europe and Asia, and the airline Emirates has played a significant role in bringing foreigners to Dubai, which accounts for two-thirds of tourist arrivals in the country. This chapter contains interviews with Hamad Buamim, President and CEO, Dubai Chamber of Commerce and Industry; Sami Al Qamzi, Director-General, Department of Economic Development; and Ahmed bin Sulayem, Chairman, Dubai Multi Commodities Centre.
Explore chapterBanking
Featuring both onshore and offshore markets, Dubai’s banking sector has become an integral part of the global financial services universe. Facilities range from conventional financial intermediation in a competitive domestic landscape to advanced specialist services housed in the Dubai International Financial Centre, the emirate’s financial ser¬vices free zone. Dubai has also positioned itself as a global centre for Islamic banking, a young and fast-developing market segment. With oil prices ticking up in the latter half of 2017 and first half of 2018, the outlook for Dubai’s financial services providers is improving in tandem. This chapter contains an interview with Bernd van Linder, CEO, Commercial Bank of Dubai.
Explore chapterCapital Markets
Capital markets in Dubai are spread across multiple exchanges, each with an emphasis on a different asset class. With this structure established and still growing, the aim is to boost activity in all asset classes, and to create an overall offering with the breadth and depth to rival major global financial centres. For now, most securities trading is governed by external factors, foremost among them being oil prices. Equities values in particular have tended to rise and fall with the price of crude. Building long-term liquidity – the presence of enough securities and investors to make buying and selling easy, fast and free from price distortion – is the goal for most emerging markets such as Dubai, and the emirate is deploying a multi-faceted strategy to achieve this. This chapter contains an interview with Hamed Ali, CEO, Nasdaq Dubai.
Explore chapterIslamic Financial Services
Throughout 2018 Dubai continued working towards the goal of establishing itself as the global capital of the Islamic economy. Financial services are a core aspect of that project, and the emirate has taken a leading role in hosting Islamic financial services companies. Its government and government-related entities were early sellers of sukuk (Islamic bonds), and the industry has become one of the world’s most active in takaful (Islamic insurance). Dubai’s market is a two-track one; its onshore oper¬ations are complemented by an offshore element operated by the Dubai International Financial Centre. The free zone is emerging as a global hub for secondary market trading of sukuk, sharia-compliant, risk-management tools and insurance syndicates, and soon its first offshore Islamic bank. This chapter contains an interview with Adnan Chilwan, Group CEO, Dubai Islamic Bank.
Explore chapterInsurance
Dubai has a growing and multi-tiered insurance sector, with options including a conventional market as well as an offshore segment that features specialists and reinsurers that cover the region. The sector is part of the larger UAE’s insurance industry, in which federal regulators and laws oversee providers that operate nationwide as well as those created to service specific emirates and market niches. Together, they comprised the largest insurance market on the Arabian Peninsula in 2016, with premiums valued at $216m. Although retail insurance remains a small part of the UAE economy, the crowded and competitive nature of the segment indicates most players anticipate future growth.
Explore chapterTransport & Logistics
As a well-established regional hub for transport and logistics, Dubai is the UAE’s primary transit point for passengers and the main gateway for its non-oil exports and imports. Counting one of the world’s busiest airports and the Middle East’s largest port among its facilities, the transport sector makes a significant contribution to Dubai’s economy as well as that of the wider UAE. In 2017 transport and storage accounted for 11.2% of Dubai’s economy at a value of Dh46.1bn ($12.5bn), second only to wholesale and retail trade, which accounted for 25.8% of the economy. Although the emirate’s economy has had difficulties in recent years due to a series of largely external fac¬tors, the trans¬port and logistics sector has by and large bucked the trend. This chapter contains an interview with Mohammed Al Zarooni, Director-General, Dubai Airport Freezone Authority.
Explore chapterMaritime
Maritime endeavours are a key component of Dubai’s history. The city was originally established as a trad¬ing port and achieved its prosperity chiefly from pearl exports. The discovery of oil in the emirate in the 1960s not only created a new source of wealth, but also encouraged the nation to develop modern maritime infrastructure, as oil exports relied heavily on shipping. In recent years, maritime facilities have been instrumental in Dubai’s efforts to diversify its economy. As part of a larger network of transport, logistics and free zones, the maritime industry is one of the cornerstones of Dubai’s economy. This chapter contains an interview with Sultan Ahmed bin Sulayem, Chairman, Ports, Customs & Free Zone Corporation and Dubai Maritime City Authority.
Explore chapterConstruction & Real Estate
Dubai’s economy went through several years of expansive growth in the years following the turn of the millennium, with much of this driven by an active and rapidly expanding construction sector. Indeed, such was the pace and scale of activities at the time that a popular claim had it that the emirate was home to around 20% of the world’s cranes at the height of the boom in 2006. Even though growth levels are not what they once were, Dubai’s construction industry continues to play a significant role in its economy, and the emirate has become a global leader in terms of the value of its ongoing projects.
Explore chapterTourism
Dubai enjoys a global profile as a major destination for both business and leisure, and today boasts some of the world’s leading offerings for hotels, conference centres, entertainment facilities and shopping malls. It is within close flying distance of some of the world’s most dynamic tourism source markets, and the emirate also remains a popular destination for its neighbours in the Gulf. The sector faces mounting challenges: competition is fierce, and low oil and gas prices have dampened the economy. Dubai has also widened its appeal to the mass market, which is more price conscious and careful with its spending. Nevertheless, signs of recovery are now easily recognisable, and it appears that the ability to stay strong in tough market environments will result in future rewards.
Explore chapterRetail
There are few destinations more closely identified with retail than Dubai. Indeed, its duty-free and low-tax shopping is one of the hallmarks of the emirate. Dubai is home to some of the world’s largest malls, most diverse retail outlets and most value-added shopping experiences, with everything from giant aquariums to ski-slopes adorning its air-conditioned retail spaces. Various substantial projects are set to come on-stream in 2019, with established centres also seeing new extensions and refits. Meanwhile, a range of special events, such as Black Friday, White Thursday and Cyber Monday, have extended the shopping calendar far beyond the original Dubai Shopping Festival, which will also extend its running time from four to five weeks in 2019. This chapter contains an interview with Colm McLoughlin, Executive Vice-Chairman and CEO, Dubai Duty Free.
Explore chapterEnergy
Although Dubai’s growth and prosperity have been fuelled by its proximity to oil, its own modest hydrocarbons endowment accounted for just 1.3% of the emirate’s GDP in 2016. Energy’s contribution to national GDP in recent years has averaged around 45% for the UAE as a whole, but only about 5% in Dubai. Still, Dubai operates as a centre for oil and gas trade. The emirate has diversified activities to become a global financial and trading hub, and hydrocarbons continue to have a major impact on economic activity. At the same time, Dubai is right at the forefront of what might be called the new emerging cleaner energy world, by developing and promoting disruptive technologies. This chapter contains interviews with Saif Humaid Al Falasi, Group CEO, Emirates National Oil Company; and Saeed Mohammed Al Tayer, Managing Director and CEO, Dubai Electricity and Water Authority.
Explore chapterHealth
One of the most rapidly expanding markets in the region in recent years, Dubai’s health care sector is set for further growth, driven by an expanding and ageing population, changing medical needs and a determination by the government to provide all citizens with the best possible health care. Both inpatient and outpatient markets are widely forecast to see double-digit expansion in the run-up to 2022, while subsectors such as medical tourism continue to gain momentum. At the same time, investment in new technologies is gathering pace, with Dubai seek¬ing to become a global leader in high-tech medical applications and digital services, like telemedicine. This chapter contains an interview with Humaid Al Qutami, Director-General, Dubai Health Authority.
Explore chapterEducation
The education sector of Dubai is shaped by a population that was 3.2m in early 2019 and around 90% expatriate, making it multinational, multi-ethnic and multicultural. In the 2017/18 academic year, Dubai’s student body included 182 nationalities, with students from India comprising around 33.9% of the total, followed by those from the UAE (11.7%), Pakistan (8%), Egypt (5.5%) and the UK (4.7%), while the emirate’s most diverse school included 114 different ethnicities. Legislation reserves public school seats for Emiratis, meaning that this large percentage of foreign students attend private schools and colleges, which offer a variety of opportunities and incorporate 16 different national curricula.
Explore chapterICT
Dubai offers a healthy environment for ICT operators, with its strong, high-tech and high-coverage network combining well with a tech-savvy and internationally connected population. At the same time, the gov¬ernment in Dubai – and in the UAE – has repeatedly demonstrated its commitment to become a world leader in terms of IT. Initiatives such as Smart Dubai and the Dubai Future Foundation, along with a minister of state for artificial intelligence (AI) and a minister for cabinet affairs and the future, are all positive indi¬cators of this emirate’s forward-looking commitment. This innovative approach is more necessary than ever in a market where basic ICT services long ago reached saturation point. This chapter contains an interview with Aisha bin Bishr, Director-General, Smart Dubai Office.
Explore chapterTax
The UAE currently has no system of federal income taxation. Instead, most of the emirates – including Dubai – enacted their own corporate tax decrees in the late 1960s. These emirate-level corporate tax decrees are of general application and remain in force as amended. These decrees are similar in nature and text, and deal in broad terms with the identities of taxable persons, rates, administration, computation of taxable profits and loss relief. The decrees limit the scope of taxation to “bodies corporate” carrying out a trade or business in the respective emirates. This chapter contains a viewpoint from Mark Schofield, Partner, PwC Middle East Tax & Legal Services Leader.
Explore chapterIndustry
From 2007 to 2017 the UAE’s industrial sector grew by approximately 31%. According to consultancy Oxford Economics, it is set to grow marginally faster — by another 34% — in the 10 years leading to 2027. At the emirate level, Dubai’s industrial sector has likewise emerged as a major driver of growth; the sector in Dubai grew by 6% annually in the ten years to 2017 and this rate of expansion is expected to surge to 51% in the decade to 2027. Growth will continue to be fuelled by the emirate’s strategic location, which is within an eight-hour flight of almost two-thirds of the global population; its comprehensive airport and seaport infrastructure; and the investment-friendly policies in place.
Explore chapterThe Guide
The guide contains listings of some of the leading hotels and resorts in Dubai and contacts for important government offices and services. It also contains useful tips and information for first-time or regular and business and leisure visitors alike.
Explore chapterTable of Contents
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