Dh37.7b Dubai budget boosts public spending

Dubai: His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on Saturday issued Decree number (1) 2009, announcing Government of Dubai's budget for 2009.

The budget this year has allocated Dh37.7 billion for public spending, which is 42 per cent higher than the previous year. The budget estimates a 26 per cent increase in government revenue from Dh26.5 billion last year to Dh33.5 billion in 2009.

The budget, which includes a strong fiscal stimulus through increased spending, has avoided any new government fees or taxes on the revenue side.

"We are confident that the strategy we adopted under the new budget will prove to be highly successful while providing an essential economic stimulus that will enable businesses to weather short-term challenges," said Shaikh Ahmad Bin Saeed Al Maktoum, chairman of Dubai Supreme Fiscal Committee.

Unveiling the details of the first-ever budget with a deficit of Dh4.2 billion, Nasser Hassan Al Shaikh, Director-General of Dubai Department of Finance, said: "The budget is aimed at conserving the dynamic growth Dubai has witnessed in the past few years."

The budget deficit is estimated at 1.3 per cent of Dubai's gross domestic product of Dh301 billion in 2007. "The deficit we have is one of the lowest in the Gulf region. The significantly higher budget expenditure and willingness to go for a deficit budget reflects the government's commitment to keep up its spending on key sectors," said Al Shaikh.

Dubai has budgeted for an estimated fiscal revenue of Dh138 billion and a fiscal expenditure of Dh135 billion in the consolidated budget of the government which includes the revenue and expenditures of both government departments and commercial undertakings owned by the Government of Dubai.

The consolidated budget has an estimated operational surplus of Dh3 billion.

Do you think the budget allocation would boost investor confidence? What else could be done to reassure investors? How have you been affected by the financial slowdown?

Yes. The budget allocation will boost investor confidence.The government budget will reassur investors. I really appreciate the budget. No I am not affected by the financial slowdown.
Kamran Khattak
Dubai,UAE
Posted: January 11, 2009, 14:10

I have one more idea. Authorities should make the visit visa easier to get. If investor or visitor is getting a visit visa easily, they can come here and see the beautiful country and be encouraged to invest their money.
Qamar Al Zaman
Dubai,UAE
Posted: January 11, 2009, 12:22

The hike in public spending is a welcome move by the government. This will no doubt increase the business confidence and boost the investors confidence. 1.3 per cent deficit can be made up easily by the end of this year, even if this is carried forward I am sure on the capabilities of the government to bridge the gap by the next fiscal year.
Sreejith Menon
Dubai,UAE
Posted: January 11, 2009, 11:31

I would say yes, provided that authorities provide investors with additional incentives.
Fahad
Al Khobar,KSA
Posted: January 11, 2009, 10:54

Just a thought - there are ways to bring some cheer, if not much, in times like these. For example, visiting parks, aquariums and public places for children is not feasible anymore. For one year at least, I request that authorities remove entrance fees for children up to 13 years old, and half the price for adults. They will go willingly and in fact spend more on available services like food etc. One more way, for example, shops, commercial buildings having their ground floors with empty looks, a simple AED 5,000 per month will bring in thousands of tentants, limit them to 2 years, let them get used, occupy the place, make it lively and then, rents can be adjusted. Look for example International City, looks like a haunted area with hundreds of closed shops. Reviving from within is the main key first, and external entrants next.Thanks.
Peeku Punjabi
Dubai,UAE
Posted: January 11, 2009, 09:46

Increase in public spending by 42% would relax the tense environment of uncertainity. The money would gradually pour down to the common man and market confidence would increase. I am effected because companies' sales have droped as they are not ready to invest in capital goods at this point due to uncertainity.
Asad
Dubai,UAE
Posted: January 11, 2009, 08:56