Dubai’s competitiveness ahead of regional peers

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Dubai’s competitiveness ahead of regional peers

Call to tap opportunities to bring it on par with world economies

By Issac John – Associate Business Editor

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Published: Fri 30 Jan 2015, 11:38 PM

Last updated: Fri 26 Jun 2015, 12:13 AM

Dubai: Dubai is ahead of its regional neighbours in competitiveness, but further opportunities need to be tapped to bring its capabilities up to par with leading world economies, said a report prepared by Dubai Economic Council.

A factory in Jebel Ali Free Zone, Dubai. The emirate has undergone large scale transformation change and is in prime position to significantly grow further as it seeks to capitalise on its current economical, trading and financial success. — Supplied photo

The report, prepared in collaboration with Deloitte Corporate Finance Limited, argues that “Dubai’s goal post should be placed far away from its immediate regional neighbours, so as to catch up with global leaders in overall economic competitiveness, such as the two benchmark city economies of Hong Kong and Singapore.

Titled, “Financial Sector Development for Promoting Investment and Sustainable Growth in Dubai,” the report authored by Rajeev Patel, director and Panos Stavropoulos, manager in transaction services at Deloitte, said in order foster further growth and to achieve its potential, the respective financial, legal and governmental authorities seek to continue develop Dubai into a global leading financial and trading hub.

“A core component of this vision is the need to promote domestic and foreign investment in Dubai as a key contributor to economic activity and growth. Although Dubai currently surpasses its regional neighbours, there are further opportunities for development to enable it to compete more effectively with other leading global hubs,” the report said.

At the moment, the report notes, Dubai has boosted investor confidence and improved market activity following its win to host the Expo 2020 and the MSCI upgrade to emerging market status.  Dubai is ahead of other regional Arab economies, in both current and sustainable competitiveness but still lags behind the benchmark cities and advanced economies.  However, “other regional economies, such as Qatar, Kuwait and Saudi Arabia are not very far behind Dubai and could pose a challenge to Dubai’s regional dominance as a financial and trading hub,” said the report.

Over the last decade, Dubai has undergone large scale transformation change and is in prime position to significantly grow further as it seeks to capitalise on its current economical, trading and financial success. “Despite the global financial crisis, Dubai has succeeded in transforming its economy into a model for many countries around the world. During the period 1995-2003, the economy grew by almost 17 per cent and by a further 12 per cent during the period 2003-2008. Also, the emirate’s GDP per capita has almost doubled from $ 22,752 in 2000 to $42,133 in 2012,” the report observed.

Dubai has achieved such impressive growth through four strategic pillars: Diversification of the economy to avoid its dependency on commodity resources aided by expansion in tourism, real estate and trade sectors;  expansion in infrastructure and logistics that has developed Dubai further and made it comparable to international standards;  development of the financial services sector through the establishment of an integrated system with world markets; and establishment of free zones to increase the attractiveness of the economy for multinational corporations as well as entrepreneurial startups.

The report has identified further opportunities for development to enable Dubai to compete more effectively with global hubs. These include the creation and growth of start-ups and SMEs; improving trading capability; developing the financial services industry; enhancing capital market activity; and formalising the regulatory framework.

The report called for more steps to enable the growth of start-ups and SMEs through improving access to finance and government initiatives promoting innovation, improving education levels and use of latest technologies

It also called for extending further support for the creation and growth of start-ups and SMEs through appropriate government schemes so as to attract further investment and contribute to economic growth. “Dubai has introduced a number of government schemes and initiatives for supporting SMEs, such as the SME 100 programmed, but further improvement opportunities exist to promote innovation and growth through the introduction of funding schemes to support SMEs in the adoption of latest technologies; the introduction of Government funding, loan schemes and loan guarantee schemes to support SMEs that meet specific criteria with regards to funding of working capital requirements and expansion of facilities.

Another step is to develop Dubai’s financial services industry through promoting product innovation, balancing asset quality, growth and liquidity and developing the wealth management industry. This will support growth of other industries and the economy overall

The report argued that the enhancement of Dubai’s capital market activity could be achieved by improving market confidence and liquidity, raising awareness of the benefits of listing and further developing the market infrastructure.

“Aligning the regulatory framework to international standards with respect to bankruptcy regulation, arbitration processes, issuance of visas and easing foreign ownership restrictions in selected industries could attract further investment,” it said.


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