Dubai bets on Knowledge-based Economy to Sustain Growth
Knowledge and Innovation to remain Dubai’s priority – Sheikh Hamdan, Crown Prince of Dubai
The emirate of Dubai has worked hard over the past several decades to develop wider, more diversified economic bedrock to power growth. As a result, the emirate has several sectors which continue to prosper in the current environment. With aims that include higher spending to stimulate economic growth and job creation, Dubai’s 2016 budget is another key focus in Oxford Business Group’s (OBG) latest publication.
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The Report: Dubai 2016 by OBG explores the emirate’s plans to boost foreign investment through new legislation governing public-private partnerships (PPPs), along with other major economic reforms. The introduction of subsidy cuts and taxes are among the other measures implemented that are also analyzed.
Sheikh Mohammad bin Rashid, Vice President and Ruler of Dubai, earlier in 2015 had approved a budget of Dh46.1 billion for the year 2016. The 2016 budget’s main allocation is to the social sector, followed by infrastructure, security, justice and safety, respectively. The expenditures on social development, accounts for 45 per cent of government expenditure, while debt servicing gets 5 per cent of total allocation. Revenue from government services represents 74 per cent of government revenue. Tax revenues represent 19 per cent of total government revenues, which include customs and taxes of foreign banks. The oil revenues accounted for only 6 per cent of government revenue.
The report highlights the latest developments in Dubai’s drive to create a knowledge-based economy. Dubai 2016 maps out the milestones that are paving the way for the emirate’s economic development, including the introduction of the Dubai Open Data Law and the launch of the Dubai Smart City initiative.
OBG’s report provides detailed coverage of the sectors that have been drivers of Dubai’s broader economic diversification and helped the emirate to weather lower global oil prices, which range from retail and Islamic financial services to tourism. In addition, it shines a spotlight on Dubai’s project pipeline, which continues to gain momentum as the World Expo 2020 draws closer.
However, 2016 will see a high profile and impressive projects come to fruition across Dubai. From amusement parks and opera houses to themed hotels and safari parks, the next year is set to be a busy time for the emirate. In next 12 months, 16 projects will make their way.
Dubai Plan 2021 is quite crucial. It describes the future of Dubai through holistic and complementary perspectives, starting with the people and the society who have been and always will be the bedrock of the city. The plan addresses the urban environment including both natural and built assets, and looks at the living experience of the people of Dubai and its visitors as a result of their interaction with this environment and the economic and social services provided.in addition, the plan also focuses on the economy, which is the city’s development engine and its fuel for its march forward.
Finally, the plan addresses the government as the custodian of the city development in all aspects. The framework of the plan includes six themes that aim to define and describe Dubai in the year 2021: a city of happy, creative and empowered people; an inclusive and cohesive society; the preferred place to live, work and visit; a smart and sustainable city, a pivotal hub in the global economy and a pioneering and excellent government.
However, the launch of World Expo 2020, with the theme of ‘Connecting Minds, Creating the Future’ is a big initiative by Sheikh Mohammad bin Rashid Al Maktoum. Dubai has announced a Smart City initiative that will leverage the internet of everything to become one of the most connected and sustainable cities with the Expo as a platform for unveiling the vision.
The Report: Dubai 2016 contains an exclusive interview with Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, in which he gives his views on a wide range of topical issues, ranging from the aims of Dubai Plan 2021 to the key role earmarked for PPPs in the emirate’s development.
Commenting on the importance of remaining competitive in uncertain times, Sheikh Hamdan said it was vital for Dubai to further solidify its core strengths, cope better with shocks and prioritize knowledge and innovation. “Accordingly, Dubai aims to strengthen its global foot-print and enhance its standing as an international business centre in trade, logistics, finance and tourism,” he told OBG. “It also seeks to develop itself into the capital of the global Islamic economy.”
Regional trade and economic integration were among the subjects explored in a separate interview with Hamad Buamim, President and CEO of the Dubai Chamber of Commerce and Industry, a key partner for OBG’s report. “We are hoping to achieve smoother transitions of goods, people and services between the GCC states,” Buamim told OBG. “Using technology to streamline Customs procedures and clearance should be integrated in a coherent way within all member states.”
Other personalities interviewed exclusively by OBG in the report include: the President of the Dubai Women Establishment Sheikha Manal bint Mohammed bin Rashid Al Maktoum; the Chairman of Dubai Airports and Emirates NBD, Sheikh Ahmed bin Saeed Al Maktoum; the Minister of State for Financial Affairs, Obaid Humaid Al Tayer; the UAE Minister of State for International Cooperation and Director General of Expo 2020 Dubai, Reem Al Hashimy; and the President of the World Bank Group Jim Yong Kim.
Andrew Jeffreys, OBG’s CEO and Editor-in-Chief, said that while Dubai was not immune to the external challenges facing the region, its impressive diversification strategy implemented over time was now serving the emirate well.
“Having moved to broaden its economic base over the years, Dubai was able to achieve steady growth in 2015 at a time when low commodity prices and currency depreciations were weighing on many of the world’s emerging economies,” he said. “With a raft of mega-projects under way and initiatives to boost foreign inflows taking shape, our report points to a similarly bright outlook this year with plenty of opportunities for investors.”
OBG’s Managing Editor for the Middle East Oliver Cornock agreed that Dubai’s plans to put innovation at the heart of its economic development had paved the way for new openings in various guises across both the government and private sector.
“The year 2016 has brought several indications that change is on the way, from a significant ministerial reshuffle to the use of social media at governmental level as a means of communication,” he said. “While Dubai’s huge project roll-outs have continued to make the headlines, our report also confirms the growing contribution that knowledge and innovation are making to the emirate’s development.”
The Report: Dubai 2016 marks the culmination of a year’s worth of field research by a team of analysts from Oxford Business Group. The publication assesses trends and developments across the economy, including macroeconomics, infrastructure, banking and other sectoral developments. It is available in print and online.