Enjoy our faster App experience

Dubai on firm footing to reach economic goals

If anyone is closely monitoring the current situation today, they will see that Dubai's financial system is strong, and despite all the regional variables and international conflicts, Dubai has managed to prosper and move forwards with speed and intent.



By Mustafa Al Zarooni (The Emirati)

Published: Thu 24 Oct 2019, 9:18 PM

Last updated: Thu 24 Oct 2019, 11:20 PM

Dubai has systematically and successfully moved away from an oil-dependent economy. It has been able to diversify into other options by creating a sophisticated financial system that addresses other revenue streams effectively. In doing so it simulates the present and the future for the country and takes into its account global economic risks, factoring them in before making an assessment of where it is most lucrative to invest.
As a result of its pragmatic approach Dubai is now ahead of the rest of the region economically. Not just that but it is perpetually citing an example of coexistence between different disciplines, moving away from reliance on a single oil-restricted commodity. In brief, this multi-pronged approach offers so much more fiscal stability and allows for prosperity to percolate to all levels.
Let's go back a little into the pages of history. Strong and specific steps were taken by Dubai in the aftermath of the financial crisis that hit the world in 2008. These were worked out through a longterm prism. As a result between the crisis and now Dubai has activated several high profile projects converting dreams into reality. The opening of the Dubai Metro on September 9, 2009, the investment in aviation with the 100 strong Airbus 380 all made an impact, the boom in construction and tourism adding to the prowess.
One can confidently say that if anyone is closely monitoring the current situation today, they will see that Dubai's financial system is strong, and despite all the regional variables and international conflicts, Dubai has managed to prosper and move forwards with speed and intent. It is no surprise that several economies see in Dubai an advanced model to emulate, looking at it with admiration and recognising that their sovereign debt amounts to or exceeds 100 per cent of their GDP.
A look at the latest IMF report illustrates that emerging market economies have risen exponentially to 160 per cent of exports from 100 per cent in 2008. In some countries it has soared to more than 300 per cent. The private sector has been galvanized in this aspect by introducing these relatively nascent economies as investors in the energy sector and public transport. As for the real estate investments which proliferate, one can see the nation's scaffolding so to speak still working significantly with a decrease in the profit rate of the companies. This reduces the cost of living, a development that will relieve residents and investors at home and abroad and make Dubai more attractive to as a tourist destination, adding greater meaning to the legend Fly Buy Dubai.
Dubai has pragmatically also reduced the fines of violations despite the fact that it needs such money in its budget. Yet reducing overhead costs in this time period makes it more comfortable for investors. This reduction of fines and facilitation of the fees for new investors acted as a spur despite the fact that the government revenues in this sector were decreased by Dh2 billion in 12 months. The collective goodwill made this exercise successful.
The process is being continued to avoid duplication of collection of fees and the streamlining will try to attract more investments after reducing the costs. This will get more revenues through the value-added tax addition.
This correction is what we have repeatedly seen manifest itself like an aircraft correcting its flight path and we then realize how dynamic the emirate is in decision-making. This is a fresh start to its economy.
I hope it will positively affect its financial market, which has been reported to be the most profitable but also the one that witnessed the biggest decline in the last year . a paradox but one that is acceptable in a state of flux that makes it a work in progress.
- malzarooni@khaleejtimes.com


More news from OPINION