Dubai budget emphasises social aspect of development

Dubai: The Dh46.1 billion annual budget of Dubai approved by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai on Sunday, focuses on maximum resource allocation social aspect of development in the emirate.

“The benefit of the budget has reflected the directives of Shaikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, who emphasised the need for attention to the social aspect and development of investment incentives, which contributed to the high ranking in global competitiveness,” said Abdul Rahman Saleh Al Saleh, Director General of Government of Dubai’s Department of finance.

The distribution of government expenditure focuses on human development. General and administrative expenses, capital expenditures and grants and subsidies accounted for 45 per cent of total government spending in 2016.

The government is keen to keep the development, advancement and support of government institutions to provide better government services for citizens and residents, a government statement said.

The government has increased its budget support of social services through public benefits funds benefiting families with children, maternal and child welfare, disabled persons, youth and sports clubs.

Wages and salaries represent 36 per cent of total government spending next year, underscoring the government’s desire to support job creation. The 2016 budget targets to create 3,000 new jobs for citizens.

In addition, the budget also targets to support housing bodies and institutions, sports and public welfare associations, charities and the media to achieve the well-being of citizens and residents.

Continuing with its emphasis on infrastructure development, the government has allocated 14 per cent of its expenditure to infrastructure sector. Dubai is planning to maintain the size of its investments in infrastructure over the next five years.

The budget has also allocated 5 per cent of government expenditures to servicing government debt which signifies the seriousness with which it has approached government obligations at a time when liquidity in the financial system is becoming tighter and cost of funds are gradually rising.

Analysts said the significantly higher government expenditure (up 12 per cent) points to the continued commitment of Dubai government to support the economy at a time when governments across the region the region are facing the prospect of fiscal tightening as a result of sharp decline in oil price.

Economists and analysts say with the renewed commitment of Dubai government to infrastructure developments linked to Expo 2020, these investments are expected to support the economic growth across the UAE. “We see strong Dubai government commitment to the timely completion of the Expo 2020. Disciplined fiscal policy remains paramount for Dubai government debt dynamics to take a stabilising sustainable path,” said Jean-Michel Saliba, Mena (Middle East and North Africa) economist, Bank of America Merrill Lynch in note.