The Department of Economic Development was responsible for crafting the 2020 Economic Strategic Plan (ESP), which recalibrates policy efforts especially towards the real economy, and carries the responsibility of aiding the intended contribution of the private sector to this revised projection of future growth. An emphasis on supply-side measures, particularly as to the ease of doing business, will complement the demand stimulus for which the region is better known.
How is Dubai's economy performing in the aftermath of the global economic downturn?
Unlike other leading business hubs of the world, Dubai remained resilient and growing even during the global economic downturn. The emirate sustained investor confidence and stimulated economic activity through increased public spending, infrastructure development, debt restructuring and a strong focus on traditional growth sectors such as logistics, trade and tourism.
Today Dubai is firmly on the growth track, advancing through unprecedented infrastructure expansion and economic diversification. Non-oil sectors already contribute 98 per cent of Dubai's gross domestic product. The government of Dubai has allocated 43 per cent of its 2011 budget for developing infrastructure, including roads, transport, airports, civil aviation and tourism.
In 2010 Dubai registered 2.2 per cent GDP growth, and, going by current trends, it is expected to grow 3.5-4 per cent this year. International financial institutions, including the International Monetary Fund (IMF) and business analysts, are predicting growth to reach 6 per cent in 2012.
How far has the 2020 Economic Strategic Plan devised by DED helped the economy to regain momentum?
Dubai being one of the most globalised economies, an open economy, we have to remain flexible and accommodate global trends and developments. The 2020 ESP is part of our efforts to reposition the Dubai Strategic Plan 2015 in the new economic landscape. ESP outlines an innovative, non-inflationary and sustainable growth plan that will help achieve Dubai's social and economic agenda.
The impact of ESP is currently being felt across the economy and policymaking in Dubai. Institutions and their functions are being streamlined, business procedures simplified and new growth ecosystems created for investors and entrepreneurs. These changes are reflected in rising trade volumes, improved foreign direct investment (FDI) inflows, an increasing number of small and medium enterprises (SMEs), growing passenger arrivals and high hotel occupancy levels in Dubai.
Can you describe DED's comprehensive plan for SMEs?
SMEs are the backbone of the Dubai economy. Together they account for 95 per cent of the enterprise population, 42 per cent of the workforce and 40 per cent of the annual gross domestic product in Dubai. Our SME strategy focuses on enabling SMEs in Dubai to move to the next level of growth and compete on a global level, through better access to capital and enhanced equity participation of the public and private sector. Earlier this year we launched the "Dubai SME 100," a first-ever ranking initiative aimed at identifying the top-performing SMEs in Dubai and enable them to become bigger, better and sustainable enterprises, competing globally.
Also, this year we organised the first-ever Conference on Corporate Governance for SMEs and announced a landmark Code of Corporate Governance at the conference. Both were aimed at creating awareness among SMEs in how they can attract investments and grow by embracing efficient governance practices and transparency. Empowering SMEs with knowledge and resources will eventually enable Dubai's economy to be less dependent on capital and labour and instead be driven by innovations, technology and high productivity.
In a recent initiative DED set up a fund for supporting SMEs run by Emirati youth. How has the response been?
The SME fund, recently approved by His Highness Shaikh Mohammad Bin Rashid Al Maktoum Vice President and Prime Minister of the UAE and Ruler of Dubai, will build on the competitive SME environment already existing in Dubai. It aims to create a holistic entrepreneurial culture, through financial and intellectual support to young Emiratis. The fund will provide young entrepreneurs with financing options, qualify and train national cadres, and provide consultancy and research on business procedures and best practices.
The Emirati entrepreneur community in Dubai clearly understands the benefits they gain from this SME strategy by way of new opportunities, capabilities and revenues. For example, the SME sector received contracts worth Dh40 million during the first half of 2011 under the Government Purchase Programme (GPP) launched by Dubai. Initiatives such as the Code of Corporate Governance and SME 100 have also provided a new growth perspective for SMEs.
When do you expect the economy to show double-digit growth again?
A significant feature of growth in Dubai today is its stability. Present and projected growth are steady and draw on our strong economic fundamentals and traditional strengths. This kind of qualitative growth is the best guarantee for its sustainability. Hence our focus is on maintaining the current growth pattern.
How far do you expect global events such as in the European economy and banking to have an impact here?
The banking sector in Dubai will remain a strong driver and promoter of economic activity in Dubai. By strengthening its banking sector and successfully restructuring debts, Dubai has been able to make sure that investors have access to financing as well. Leading international financial institutions, especially from the fast-growing economies in Asia, are moving to Dubai to expand their coverage across the Middle East, North Africa and CIS regions. The Government has issued new legislation that consolidates commercial laws and regulations in Dubai.
How do you expect the business environment to improve as a result?
Law No. 13 of 2011 aims to regulate economic activities in the emirate, and create a conducive environment for investment across various economic sectors. Under the new law a single portal will be set up through which various government bodies can co-ordinate.
The law also seeks to establish a unified record of licences and registry of businesses operating onshore and in the free zones in Dubai, enabling both to interface effectively.
It aims to further improve the ease of doing business in Dubai, provide more legroom for investors and entrepreneurs, and integrate global best practices in the accuracy of information, transparency, protection of consumer rights and intellectual property, and application of state-of-the-art technologies. As per the law, DED, at the request of the free zone authorities, will provide permission for using its software and electronic systems for business registration and licensing. DED also has the right to delegate any of its powers provided in the law regarding licensing of facilities to any public or private agency. The law also provides for allowing establishments in the free zones to operate outside these areas, based on agreement and coordination between DED and the free zone authorities. DED will also issue permits for promotional and marketing activities in accordance with the requirements and regulations adopted.
The law allows for the suspension of an enterprise for a certain period, with the exemption from fees and fines for non-renewal during the period of suspension, according to rules and conditions set by the Department.
It authorises DED to manage all the issues related to inspection, control of intellectual property rights and commercial fraud, in addition to strengthening the role of the government in consumer protection. The law also covers grievances regarding DED's decisions. On receiving a complaint the DED Director General will form a committee to consider it and arrive at a decision within 30 days from the date of grievance.
Recently the government launched Foreign Investment Establishment under DED. What does that comprise?
Dubai has always attracted investors and businessmen from all over the world. Continuous improvements in the business environment have meant global interest in Dubai as a business destination growing further. The FDI Confidence Index of A.T.Kearney ranked Dubai as the 11th preferred destination in the world and first in Middle East and North Africa (Mena) in 2010. The Foreign Investment Establishment is a timely initiative to leverage this growing interest and provide the right opportunities for businesses to set up in Dubai, gain traction and expand globally from here. The initiative will also provide investors with the required facilities, incentives and logistics support, enabling them to focus on their core business.
The DED offers a substantial portion of its services online. How far might that extend?
DED has one of the most competitive and progressively evolving eServices platforms among government departments in the region. Currently 92-94 per cent of our services are available online.
The range of eServices offered by DED includes a number of online initiatives that streamline and simplify the process of setting up and running a business. These include reserving and renewal of trade name, renewal of licences, initial approval of licence permits for most activities, and updating trade licence data.
The eServices also include Transaction Status, whereby customers can check the status of the transaction by using a transaction number, licence number or initial approval number. Search Trade Names enables users to reserve trade names or find out if the desired name is already taken. Company Lookup helps to search for existing companies operating in Dubai and gain information on their contact details and business activities. A Number of Licences per Person Report is also available whereby the number of licenses registered under one person's name can be known.
Through Business Set-up Simulator potential investors can get a rough estimate of the cost of setting up a new business in Dubai, while Licence Renewal Cost Estimator allows existing companies to find out the cost of renewing their licences. The Activity Search procedure helps users to understand more about the activities that are classified by DED.
The Create Account Name service allows users to create a special account to be able to complete transactions electronically, the Reservation and Modify Appointment Service provides transactions in one of DED's branches (Business Village, Al Tawar Branch), and the Print a Licence service allows users to print their licensing after adding details to their personal account.
These services are led by the Business Registration and Licensing Division at DED. That division will continue to provide more tech-driven and value-added services to cope with the growth of businesses, and to position DED as the best government department offering services leveraging the latest technologies.
The writer is Deputy Business Editor, Gulf News
