Dubai's budget shows the way forward

The Dubai Government is investing in the economic and social infrastructure of the emirate to ensure its continued development, despite the difficulties facing the global economy at present.

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, approved the budget for the emirate for 2011 on Wednesday. The budget provides for Dh33.6 billion in spending, 43 per cent of which is allocated to the economy and infrastructure to promote growth and encourage investment.

About 24 per cent of the budget is allocated to social services and subsidies and 22 per cent to security, justice and safety. This expenditure will be used to improve the quality of life of residents in Dubai and strengthen the human resources of the emirate.

Importantly, the budget has a deficit of only Dh3.77 billion as the government expects to receive revenue of Dh29.9 billion. In these troubled times for the global financial system, it is essential that governments — like people — live within their means.

The budget was drafted within a framework set by the Supreme Fiscal Committee chaired by Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates airline and Group. The committee has the responsibility of overseeing the fiscal policies of Dubai. Government departments have been required to tighten their belts and spend their budgets more efficiently. This has resulted in a possible current account surplus of Dh1.9 billion for the emirate.

This conservative fiscal approach will be welcomed by investors, who are risk averse as a result of the international financial crisis. The budget shows that Dubai has adapted to the new realities of the global economy and is implementing its programme to become a commercial and financial hub in a sustainable and fiscally responsible manner.