Aerial view of the Dubai Marina.
DUBAI, United Arab Emirates — Dubai on Wednesday announced a mammoth $8.7 trillion economic plan for the coming decade, aimed at turbocharging trade, foreign investment and its place on the map as a global hub.
"Dubai will rank as one of the top four global financial centers with an increase in FDI to over AED 650 billion ($177 billion) over the next decade," Sheikh Mohammed bin Rashid al Maktoum, the ruler of Dubai, tweeted. "Over 300,000 global investors are helping build Dubai into the fastest growing global city."
The post outlined a few of the 100 "future transformational projects" included in the ten-year economic roadmap. Those include boosting foreign trade to 25.6 trillion dirhams from 14.2 trillion dirhams in the last decade, nearly doubling annual foreign direct investment to 60 billion dirhams yearly, and increasing government spending from 512 billion dirhams in the last decade to 700 billion in the next.
The plan also aims to bring private sector investments up from 790 billion dirhams in the last decade to 1 trillion in the next and pledged 100 billion dirhams in annual contributions to the economy from digital transformation projects.
Dubai aims to double the size of its economy in the next decade and become one of the "top 3 economic cities around the world," the Sheikh's tweet read.
The news comes just a few days after Dubai announced an end to its steep 30% tax on alcohol, a move that looks to have been made to boost tourism and business. Recent years have seen the emirate — which is the glitzy commercial and tourism capital of the oil-rich United Arab Emirates — roll out a flurry of reforms aimed at making it more attractive for foreigners and international companies to live and invest.
The sheer size of the city's economic goals may draw some skepticism, but finance experts in Dubai believe they are achievable.
"It's ambitious, but there's no reason to doubt those targets given Dubai's economic history and recordsofreforms," Tarek Fadlallah, Middle East CEO at Nomura Asset Management, told CNBC.
Karim Jetha, chief investment officer at Dubai-based asset management firm Longdean Capital, noted the competition angle: nearby Saudi Arabia is itself investing trillions to shed its closed and conservative image and attract tourism and foreign investment.
"The numbers sound ambitious but Dubai has never been short on ambition," Jetha said. "As neighboring countries like Saudi Arabia open up and look to capture more regional business, Dubai is setting its sights higher and is seeking to beaglobalhub."
watch now
Dubai has long been a regional hub for the Middle East but has of late made changes to integrate further with other parts of the world. It is home to a diverse 90% expatriate population and has for many years offered lifestyles comparable to those in the Western world — along with beaches, no income tax, and one of the world's lowest crime rates.
The UAE also recently changed its Islamic weekend of Friday-Saturday to the Western weekend of Saturday-Sunday, to be in line with much of the rest of the world, and began offering a remote worker visa program throughthe coronavirus pandemicas more people adopted a remote work lifestyle.
watch now
VIDEO12:2512:25
Dubai wants to become a global tech hub – and it's betting on crypto
An early rollout of vaccines for its entire population in early 2021 allowed Dubai to return to "normal life" during the pandemic far sooner than most other places, drawing waves of new residents and visitors. Its real estate sector is currently booming, and Dubai was recently ranked as one of the world's top ten best cities for expats to live and work.
As much of the world looks ahead to a grim and bearish 2023, with forecasts of widespread recessions, high energy costs and slow economic growth, the Gulf states generally are set to flourish, says Nomura's Fadlallah — buoyed by still-high oil prices and driven by a desire to diversify their economies.
"I think the GCC is going through a GoldenAge," Fadlallah said, referring to the Gulf Cooperation Council states. Its "economies have never been bigger, stronger, more diversified and more integrated into theglobaleconomy."
As an expert in global economics and geopolitics, I can provide valuable insights into the article about Dubai's ambitious $8.7 trillion economic plan for the coming decade. My expertise in this field is backed by a deep understanding of economic strategies, international trade, and the dynamics of the Middle East region. Let me break down the key concepts and provide additional information related to the article:
-
Dubai's Economic Plan: Dubai has unveiled a massive $8.7 trillion economic plan for the next decade. This ambitious plan is aimed at transforming Dubai into a global economic powerhouse by boosting trade, attracting foreign investment, and enhancing its position on the global map.
-
FDI Increase: The article mentions that Dubai aims to increase foreign direct investment (FDI) to over AED 650 billion ($177 billion) over the next decade. FDI is crucial for economic growth as it represents investments made by foreign entities in a country's businesses and projects.
-
Global Investors: Sheikh Mohammed bin Rashid al Maktoum highlights the role of over 300,000 global investors in Dubai's growth. Global investors play a significant role in shaping the economic landscape of Dubai by contributing capital, expertise, and technology.
-
Transformational Projects: The economic plan includes 100 "future transformational projects." Such projects are often large-scale initiatives aimed at driving economic growth, improving infrastructure, and fostering innovation.
-
Foreign Trade: Dubai aims to boost foreign trade to 25.6 trillion dirhams from 14.2 trillion dirhams in the last decade. This underscores the importance of international trade in Dubai's economic strategy. Dubai's strategic location and world-class infrastructure make it a key trading hub.
-
Government Spending: The plan involves increasing government spending from 512 billion dirhams in the last decade to 700 billion in the next. Government spending can stimulate economic activity and support various sectors.
-
Private Sector Investments: Dubai seeks to raise private sector investments from 790 billion dirhams in the last decade to 1 trillion in the next. A vibrant private sector is essential for sustainable economic growth and job creation.
-
Digital Transformation: Dubai commits to contributing 100 billion dirhams annually to the economy from digital transformation projects. Embracing digital technology is crucial for enhancing efficiency and competitiveness.
-
Dubai's Economic Growth Goals: Dubai aims to double the size of its economy in the next decade and become one of the top three economic cities globally. This underscores Dubai's ambition to compete with other global economic hubs.
-
Tax Reforms: Dubai recently announced the end of its 30% tax on alcohol, a move aimed at boosting tourism and business. Tax policies can significantly impact a region's attractiveness to tourists and investors.
-
Reforms and Ambition: Financial experts in Dubai believe that the ambitious economic targets are achievable due to Dubai's track record of economic reforms and its history of setting and achieving ambitious goals.
-
Global Competition: Dubai faces competition from neighboring countries like Saudi Arabia, which is also investing heavily to attract tourism and foreign investment. Competition can drive Dubai to strive for greater economic growth and global relevance.
-
Integration and Diversification: Dubai has long been a regional hub for the Middle East but has recently integrated further with the world. The city's diverse expatriate population, attractive lifestyle, and pro-business policies have contributed to its global appeal.
-
UAE's Response to the Pandemic: Dubai's early rollout of vaccines and proactive response to the COVID-19 pandemic allowed it to return to normalcy quickly, attracting new residents and visitors. This demonstrates the importance of public health measures in economic resilience.
-
Gulf States' Economic Outlook: The article mentions that Gulf Cooperation Council (GCC) states, including Dubai, are poised for a "Golden Age" of economic growth, driven by diversification efforts and strong oil prices. The GCC states are actively working to reduce their dependence on oil revenues and expand into other sectors.
In summary, Dubai's ambitious economic plan reflects its determination to become a global economic powerhouse by attracting investments, expanding trade, and embracing digital innovation. The city's strategic location, pro-business policies, and commitment to reforms position it as a key player in the ever-evolving global economic landscape.
