Dubai Poised to Lead The Next Economic Boom
Is Dubai heading for another economic boom? Industry and financial experts reply in the affirmative. They base their insights on the latest Dubai FDI Monitor data which ranks Dubai first in the Arab world and third globally in FDI attraction.
“Dubai is now among the world’s most attractive FDI locations. Global investors have placed their confidence in our business ecosystem,” says H.H.Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council of Dubai.
Experts agree with Dubai’s political leadership which has been presiding over a series of reforms to boost economic growth. Dubai, interestingly, had attracted $ 4.3 billion of FDI capital inflow from 371 projects in the first 9 months of 2021, a significant increase from the year prior to that.
“Attracting FDI to the tune of $ 4.3 billion at a time when the world is still recovering from the pandemic-induced slowdown is something very reassuring,” opines Rakesh Menon, former global senior vice president, JP Morgan Bank based out of London.
Menon, in fact, had fairly long innings in Dubai as a senior banking professional with Standard Chartered Bank and Citi Bank before he moved to London. Dubai, according to him, is fashioning itself as a wealthy European nation.
“It is not the old Dubai anymore. The new Dubai is all about AI, Blockchain, Crypto, Startups, Fintech and other emerging technologies. I see a trend of US and Europe moving their blockchain platforms to Dubai,” Menon points out, taking cue from the FDI source countries released by the Dubai FDI Monitor.
The United Kingdom (UK) led the capital inflows into Dubai with 29% followed by France (19%), the US (14%), Saudi Arabia (6%) and India (4%). Together, these five countries accounted for 72% of the total capital inflow into Dubai.
In terms of FDI projects, the UK ranked first 20% followed by the US (19%), India (11%), France (6%) and Germany (5%). These figures, according to Menon, show Dubai is able to sustain the interest of the West which holds the key to the future events.
“Then, you also need to factor in Dubai’s strategic location which is helping it to control 70 to 75 percent of the global GDP. So, I can confidently say Dubai is now riding the next wave of economic boom which has just started,” adds Menon.
Director-General, Department of Economy and Tourism, H.E. Helal Saeed Al Marri attributes the latest FDI trends to the emirate’s future-forward policies, creation of new investment avenues and continuous improvement in the area of ease of doing business.
Krishnakumar Varma, the founder of Finage Consulting Pvt Ltd, concurs and lauds the infrastructure that Dubai has created over the years. “Their infrastructure is simply unbeatable. The recent reforms like 100% ownership are also fuelling Dubai’s growth further,” Varma elaborates.
Varma, a senior banking professional who had worked in Dubai for over 30 years with leading banks like Emirates NBD, First Abu Dhabi Bank, NBQ, Doha Bank and HSBC believes long-term investment made by Dubai that led to the creation of world-class infrastructure is finally paying off.
What Varma says reflects in the Dubai FDI Monitor data which confirms that as much as 58% of the inbound FDI happened in strategic sectors while it stood at 52% in the case of Greenfield projects. FDI projects in total increased to 378 compared to 326 in 2020 which is a 16% leap.
Menon and Varma agree that Dubai would soon emerge as the global hub for emerging technologies as the emirate is eager to increase its revenue from non-oil sources. It is true that Saudi Arabia is upping its competition. “But it won’t be easy for them to catch up with Dubai,” adds Menon.
Meanwhile, Dubai FDI CEO Fahad Al Gergawi credits the FDI performance of Dubai to innovative strategies and a global approach. Enthused by the FDI inflow, Al Gergawi is optimistic that the emirate would continue to attract global businesses. “A new momentum has just started,” he concludes.
Disclaimer: This article is a part of featured content series on Business in Dubai