Dubai: a success story
Mohammed Alabbar, director general of Dubai Department of Economic Development and chairman of Emaar Properties, had once remarked: “For the 300 million Arab population, there’s only one ‘New York’.
That’s Dubai... The Arab world needs more successes like Dubai.” He couldn’t have been more right. Dubai has, in more ways than one, rewritten the rules and shown the Arab world how to make a success of the country’s economy.
A vibrant economy coupled with state-of-the-art telecommunication, sympathetic business environment and encouraging tax regimes have all contributed to turn the city into the region’s main commercial hub and a dynamic international business centre. Keen that perceptions about Dubai do not suffer from the negative image associated with some other Islamic countries in the Middle East, it has done everything possible to create the right environment to encourage key global players to do business in the emirate.
Playing host to year-round activities – from the Dubai Shopping Festival, the world’s largest family festival, to the Dubai Summer Surprises, which encourages tourist traffic to Dubai during the warm summer months, to a host of international events and concerts – leisure has surpassed business as the primary reason for visiting Dubai. As the first place in the region to recognise the importance of sports in promoting tourism, it also boasts an enviable calendar of year-round sporting events. The long list includes horse races, international powerboat racing, pedigree camel races, the Dubai Air Show, Dubai Desert Golf Tournament, Dubai World Cup, Dubai Tennis Championships and Dubai Rugby Sevens. Not surprising then that Dubai is widely recognised as an international sporting venue and is on the mandatory calendar of scores of top sportsmen and athletes.
Having been acclaimed as the sporting capital of the Middle East, Dubai further consolidated its position when it unveiled the world’s first integrated purpose-designed sports city, which will be part of the multi-billion Dubailand project. The Dubai Sports City is going to be a 50 million sq ft enterprise when completely ready by 2007. But that’s not all. The UAE has also started readying itself to bid for the 2016 Summer Olympic Games!
However, looking beyond, business, sports and leisure tourism, Dubai has emerged as one of the world’s favourite destinations for freehold properties. Even though Dubai’s property sector is in the early stages of the boom, it is no small achievement that it has attracted Dh100 billion investments so far.
“Dubai has proved its dynamic growth rate to the world and its determination to be a world leader in turning exciting ideas into reality,” said Dubai Department of Tourism and Commerce Marketing (DTCM) director general, Khalid A Bin Sulayem. “A combination of factors like massive infrastructure development, investor-friendly policies and safety has helped achieve unparallel results. Freehold properties are not only changing the skyline of Dubai but also providing opportunities to invest in a destination that take prides in being bold and beautiful.”
HH Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Department of Civil Aviation (DCA) and Chairman of Emirates, said: “The value of Dubai’s real estate sector is tipped to be one of the big growth areas over the next decade, with some market-watchers predicting it could reach a value of Dh250 billion within ten years.”
Not surprising then that American property magnate, Donald J Trump, commented: “Dubai is clearly one of the most vibrant property development markets in the world. Pioneering and unprecedented projects make Dubai a prime contender in the global economy. The real economic development came from the ‘start-up’ spirit. The true driving force in any economy is entrepreneurship.”
By all accounts, Dubai is set to continue its fast pace of development, a trend that will bring more people to the emirate as visitors and tourists, largely due to the expansion programme of Emirates airline and the Dubai International Airport. The Dubai airport, which has emerged as the regional aviation hub, is expecting around 25 million passengers to use the airport this year.
To cope up with the expansion and developments, Dubai plans to invest up to $6 billion dollars in infrastructure projects including roads and bridges and the ambitious Light Rail Transit (LRT) system with a total length of 70 km, 55 stations and a budget of $4.5 billion.
“Dubai’s tourism industry has been posting impressive year-on-year growth, even at times when the travel and tourism industry in almost every part of the world is going through downturns and negative developments. The tourism, trading and technology hub of the Middle East is not resting on its hard-earned laurels, but working to attract more tourists from across the world,” added Bin Sulayem.
In the tourism sector, hospitality and catering alone achieved 16.4 per cent growth in 2004. Clearly, Dubai’s economy has enjoyed its longest period of sustained growth during the past decade and the accumulated annual growth of the country’s economy in the last decade comes to 10 per cent, the highest rate of growth in the world.
Even though the UAE’s economy in general reflects Dubai’s phenomenal growth, according to a report by EFG-Hermes, the region’s leading full service investment bank, the UAE is set to gradually move from a stage of spare capacity and accelerating economic growth.
“The UAE economy has rapidly evolved from a youthful economy to one that is now showing signs of maturity. At present, oil production is running close to full capacity, the loan-to-stable resources ratio in the banking system is approaching its statutory limits, housing rents are becoming comparable to those in Europe and the US, and equity prices have more than kept pace with the rise in net earnings,” noted Hany Genena, senior economist at EFG-Hermes and author of the report.
However, the report went on to indicate that the prospect of high crude oil prices and production levels over the coming months is continuing to bolster investor confidence as evidenced by the exuberant performance of the Abu Dhabi Securities Market (ADSM) and Dubai Financial Market (DFM). From end 2004 until August 30, 2005, the DFM and ADSM indices gained 143 per cent and 71 per cent, respectively, ranking the first and sixth best performers in the Middle East and North Africa region.
In sum, all this augurs well for the travel and tourism industry in the UAE, which is poised to grow from strength to strength in the years to come.