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UAE Economy Continues to Grow With Improved Rankings from World Bank and Dubai Nabbing Top Spot as Investment Destination


Middle East : 26 October 2012

Economy in the UAE Set for Continued Growth

Rising oil prices and increased output work together for growth in the GCC economy, helping that region to avoid negative effects of the Eurozone crisis, according to recent expert statements.

Abu Dhabi’s oil economy is growing and the non oil economy in Dubai is keeping pace, resulting in GDP growth for the UAE as a whole, according to Standard Chartered Bank senior economist Philippe Dauba-Pantanacce.

Dubai has realized benefits from the Arab Spring, driving the local economy to climb back to levels seen prior to the 2008 crisis, with the real estate sector experiencing recovery and subsequent improvements.

The current year will be very good for the GCC member nations, stated Dauba-Pantanacce, especially the UAE. Resilient oil prices and output growth will result in higher levels of growth in the GDP for GCC nations.

Increased public spending in the last 18 months to 2 years have also boosted markets. Wages increased across the region and governments boosted public spending in response to the Arab Spring. These conditions have supported residents and resulted in positive short term effects, according to Dauba-Pantanacce.

Dubai is considered a “safe haven,” as quoted in Zawya, realizing the benefits of creating strong tourism and service sectors within the emirate. Dubai International Airport handled over 50 million passengers in 2011, with that figure rising to 54 million by the close of this year, according to DIFC courts chief executive Mark Beer.

Both the private and public sectors of the UAE have been instrumental in building the emirate’s economy. Beer stated that the UAE stands as a model for other nations, with a vibrant private sector allowed to play its role as the main source of future job creation.

According to statements from Bain & Company Middle East’s chairman, Jean Marie Pean, the UAE has seen success in economic restructuring and avoiding the negative effects of the 2008 financial crisis and Eurzone vacuum.

Post-crisis economic growth rates in the UAE stood at 6 percent, dropping to 4 percent in the midst of the financial crisis. Normal rates have returned and recovery points to sustained levels of impressive growth.

ADCCI vice-chairman Khalfan Saeed Al Ka’abi noted that the UAE stands as a worldwide business hub attracting business professionals and entrepreneurs launching new companies and ventures.

Al Ka’abi stated that leadership in the UAE remains committed to driving the nation forward, creating vast opportunities and attracting greater than 200 different nationalities for residence and employment.

World Bank Report Ranks UAE in 26th Place Globally

The World Bank report entitled Doing Business 2013 placed the UAE in 26th place, moving up from 33rd place in last year’s report.
Singapore grabbed the top spot for the seventh consecutive year.

This increase is the largest jump for the UAE in the World Bank’s report. In terms of “ease of starting a business,” the UAE claimed 22nd spot for 2013, up from 46th position in the 2012 report.

The World Bank and IFC prepared this report, highlighting the progress in the UAE for licensing and business reforms, such as starting a company, obtaining electricity and remitting taxes and fees, as the main factor in the nation’s climb up the rankings.

The UAE’s Competitive Council secretary general, Abdullah Lootah, noted that the climb in rankings indicates that the UAE is on a good path. Organizations should continue to focus on moving the legal environment forward with modernization and streamlining the government services. The Competitive Council’s mandate is to ensure the UAE becomes the best nation in the world by 2021. This vision is maintained as the main objective in operations.

Of Middle Eastern nations, only Saudi Arabia ranked higher than the UAE in terms of “ease of doing business,” coming in at 22. Other GCC nations ranked well, with Qatar ranking in 40th, Bahrain in at 42, Oman ranked 47 and Kuwait ranking at 82.

These positive changes indicate that governments have greater opportunities to invest in structural changes and greater levels of transparency to make a better regulatory environment for businesses.

Dubai Ranks Among the Top 25 Global Hotel Investment Locales

An international consultancy ranks Dubai among the leading hotel investment destinations in the world for 2012.

Cushman and Wakefield’s (C&W’s) report entitled “Winning in Growth Cities” covering 2012 and 2013, Dubai ranked in 16th position as a top hotel destination, noting that hotel sector investments have surpassed Dh 14.2bn (or $3.9bn) from third quarter 2011 to second quarter 2012.

Dubai is the only Middle Eastern city to make this list.

According to earlier reports by STR Global, growth of hotel room supply is forecasted to hit 9.6 percent this year as demand grows across the industry. This rate rose 16.5 percent YTD August, when compared to last year’s figures. Around 13,000 new rooms are being constructed in Dubai, with a further 21,000 announced.

The number of international visitors to Dubai surpassed the 8 million mark by the end of last year. Despite that phenomenal growth, expectations state that revenue per available hotel room in the city will expand by 8 or 9 percent, according to STR Global.

Spending by international visitors in 2011 is expected to grow by 24 percent, moving from $6.3 billion the previous year to reach $7.8 billion last year. The 2009 figure was $5.2 billion.

London claimed top spot on the C&W report, boosted by the Olympics and surpassing New York City.

Investments in the global hotel sector declined by 12.4 percent over a 12-month period ending in second quarter 2012. Economic headwinds have delayed closings and dragged down activity in the sector.

Lending constraints from the banks have resulted in increased sector activity from equity investors, sovereign wealth funds and individuals with high net worth.

In regards to connectivity, Dubai ranked in 15th place. The global consultancy firm noted that true connectivity covers the balance of the world, whether by sea, air or transportation between cities. Connectivity is vital for cities hoping to generate and sustain leisure and business opportunities.

Tokyo came in at the top for connectivity, along with Hong Kong in second place, New York in third and London capturing fourth place.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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