Dubai is inching closer to resetting its economy to take on GDP growth in the 2 per cent plus range. The benefits of hosting the Expo 2020 figures prominently in the expectations of higher growth for the economy — 3.8 per cent next year and then tapering gently to 2.8 per cent in 2021. These targets look realistic after Dubai showed its resilience in trying to find a way through what proved an exceptionally difficult 2018, when the growth was pegged at 1.9 per cent.
What Dubai did was intervene forcefully since mid-2018 in rolling out a series of reform packages that would provide a boost for key sectors such as real estate, construction, tourism, and in pulling in foreign direct investments. By next year the full impact of the reform packages will be felt. Coupled with the start of the Expo in October next year, the reforms will help Dubai’s stated ambition of drawing in Dh50 billion and more through foreign investments. The official growth projections by Dubai, released on Sunday, indicate the commitment to stay the course towards opening up the economy further and ensure this is built on drawing as much support as possible from overseas fund flows as on locally and regionally generated investments.
What about the Expo 2020’s legacy? Dubai estimates put a value to that — Dh62 billion. That would be derived from May 2021 to 2030. The Expo 2020 thus sets a marker for how the local economy can benefit in the run-up to the event and after that as well. In plain terms, this does not end when the curtain falls on the six-month event in April 2021. What it then does is allow Dubai to build itself new platforms on the Expo foundations. That would be a good place to start the next phase of the growth story.
But even as it gives a direction to the next chapter, Dubai has shown that it is willing to intervene forcefully in the present. What this shows is the unwillingness to let market cycles phase out themselves; instead, the emirate decided that it will change the rules of the game to spur growth.
This is the message now, both to a domestic audience and those in charge of vast funds for disposal. Dubai means business.
