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Dubai announces $8.7 trillion economic plan to boost trade, investment

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Dubai is seeing its hottest property market in years, with property sales up 45% year-on-year in April and 51% in May, according to the Dubai Land Department.

DUBAI, United Arab Emirates – Dubai on Wednesday announced a massive $8.7 trillion economic plan for the next decade, designed to supercharge 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 (US$177 billion) in the next decade,” tweeted Sheikh Mohammed bin Rashid al Maktoum, ruler of Dubai. “More than 300,000 global investors are helping to transform Dubai into the fastest growing global city.”

The post outlined some of the 100 “future transformational projects” included in the ten-year economic roadmap. This includes boosting foreign trade to MAD 25.6 trillion from MAD 14.2 trillion over the past decade, nearly doubling annual foreign direct investment to MAD 60 billion annually and increasing government spending by MAD 512 billion over the past decade. decade to 700 billion in the next.

The plan also aims to increase private sector investments from MAD 790 billion in the last decade to MAD 1 trillion in the next and pledged MAD 100 billion in annual contributions to the economy for digital transformation projects.

Dubai aims to double the size of its economy over the next decade and become one of the “Top 3 Economical Cities in the World”, read the Sheikh’s tweet.

The news comes just days after Dubai announced the end of its exorbitant 30% alcohol tax, a move that appears to have been taken to boost tourism and business. In recent years, the emirate – which is the flashy commercial and tourist capital of the oil-rich UAE – has implemented a series of reforms aimed at making it more attractive for foreigners and international companies to live and invest.

The size of the city’s economic targets may attract some skepticism, but finance experts in Dubai believe they are achievable.

“It’s ambitious, but there’s no reason to doubt these targets, given Dubai’s economic history and record of reforms,” Tarek Fadlallah, CEO of Nomura Asset Management for the Middle East, told CNBC.

Karim Jetha, chief investment officer at Dubai-based asset management firm Longdean Capital, noted the competition angle: neighboring Saudi Arabia is investing trillions to shed its closed-off, conservative image and attract tourism and foreign investment.

“The numbers look ambitious, but Dubai has never lacked ambition,” said Jetha. “As neighboring countries like Saudi Arabia open up and look to capture more regional business, Dubai is aiming higher and looking to be a global hub.”

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Dubai has long been a regional hub for the Middle East, but it has recently made changes to integrate even more with other parts of the world. It is home to a diverse population of 90% expats and has for many years offered lifestyles comparable to those of the western world – along with beaches, no income tax and one of the lowest crime rates in the world.

The UAE has also recently changed its Islamic Friday-Saturday weekend to the Western Saturday-Sunday weekend to be in line with much of the rest of the world, and has begun offering a remote work visa program during the coronavirus pandemic as more people embraced a remote work lifestyle.

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An early rollout of vaccines to the entire population in early 2021 allowed Dubai to get back to “normal life” during the pandemic much sooner than most other places, attracting waves of new residents and visitors. Its real estate sector is currently booming, and Dubai was recently ranked as one of the top ten cities in the world for expatriates to live and work.

While much of the world looks forward to a bleak and pessimistic 2023, with forecasts of widespread recessions, high energy costs and sluggish economic growth, the Gulf states in general are set to flourish, says Nomura’s Fadlallah – buoyed by still-high oil prices and fueled by by the desire to diversify their economies.

“I think the GCC is going through a Golden Age,” Fadlallah said, referring to Gulf Cooperation Council states. Their “economies have never been bigger, stronger, more diversified and more integrated into the global economy”.