The economy of the United Arab Emirates which includes Abu Dhabi and Dubai is one of the growing and flourishing economies of the world. Regarding figures, it is considered to be second largest. The reason behind the success is that they are trying day after day to diversify the economy and as the principal of success states that” greater the diversification, more will be the return.” The macroeconomic factors contribute positively towards the positive trend. The main reliance of their industry is basically based on the petroleum and oil industry. Another important material is a natural gas which has a huge part in the earnings of these states.
Some time back, the economy of Dubai suffered a major collapse back in 2017 to 2010. The economic crises were really hard. The security of oil reserves was no longer ensured, and it was a major setback to their economy. Now the petrodollars of Abu Dhabi are the main reserves and sources of success for this place. The disadvantage they had from this event was that now they are suffering from the extreme amount of debt.
Current economic trends
Because of the crises in the last decade, Dubai is in a large amount of debt. But the main advantage they have is the tourism industry. This industry gives them a lot of profits. A large portion of revenues comes from the luxurious hotels and resorts in the state. Many people move and visit this amazing place of the world just to enjoy the luxury and different atmosphere. These deluxe hotels are present because of the great boom in the construction industry. The main building blocks of the developed economy of Dubai and Abu Dhabi are the service sector and construction industry. World’s largest developers are present there, and they are developing such high-end projects day after day that leaves the viewer astonished.
Right now, among all the Muslim and Arab Nations, Dubai is the second largest regarding GDP. There was a huge increase that was seen at the end of 2016. All the sectoral, as well as macro factors, indicate towards the larger chances of growth. If we see the economic growth, we can observe that the place is continuously developing since really old times. The main point of development of this state is the oil sector, but if we also see the non-oil industries, they are also contributing a lot to the development, improvement, and success in the revenue. All these positive indicators lead to major growth factors. The main results of this growth are shown in the form of an increase in the expenditures of government and purchasing power has also seen a great boom.
Trade with external world
Some years back, the imports of UAE improved so much that they even passed Saudi Arabia in the market of being the largest consumer goods purchaser. The exports are also great in number which makes it collectively the second largest exporters of the whole region. The chief contribution in the trade side of UAE is of India. There are a large number of Indian nationals living in UAE, which increase the opportunities and make them largest trading partners. Regarding exports, the large portion of their exports is given to Iran, India, Saudi Arabia, Oman, and Switzerland. However, on the opposite side, the countries who supply the goods to UAE include China, United States of America, India, Germany, and Japan. These countries become the trading partners and contribute a lot to the mutual benefits.
The preparations of Dubai for 2020 expo
It is a known fact that a large portion of the revenue in non-oil sector consist of the tourism industry. The sector is facing a large growth in the previous years, and the future forecast also suggests a large boom in the hospitality and hotel industry. With so many avenues and growth opportunities, required changes should be made. One of the steps towards growth is the arrangement of Expo 2020. At large, no matter how much cost it may incur, but the benefits of this opportunity outweigh all those negative impacts. The main features and moto behind this expo are about connecting the powerful minds and creating new future. Accordingly, all the required changes are being made in the infrastructure of the area.
The main objective behind carrying out such a large plan is the development and growth of the city. Already the preparations are made. With the estimate of expected population, this plan is made. These plans basically focus on some of the strategies which will ultimately benefit the tourism industry in Dubai. Some of the related projects include Dubai Canal Project and Bluewaters Island. These projects include the presence of residential units, retail outlets, entertainment areas and hospitality industry. The unique idea behind these projects provide a great boom to the industry of Dubai and revenue will ultimately increase.
Future hopes after Expo 2020
When Dubai decided to host the Expo 2020, the main purpose was to bring benefit to the future generations. According to the requirement, great level of changes is made in the area. If we talk about energy resources, then according to plan the 50% of power will be generated from renewable energy resources. Moto states that “Connecting Minds, Creating the Future,” that motivates for the growth and learning opportunities. The main concern here is the energy resource, and the project will get the main source from Mohammed Bin Rashid Al Maktoum Solar Park. The park will provide a large amount of clean energy for the project.
Logistics challenges faces in the Expo 2020
For the reason of having the maximum confidence of the world, Dubai has become the first city in the Middle East area to hold this Expo event. But, the thing that should be kept in mind is that all these things come at a cost. There are multiple challenges in the field of logistics that should be faced by the people arranging this event. To present all the creative ideas and depiction of multiple cultures a huge cost is needed as well as the availability of right resources at the right time is the key point. Logistics is all about getting the optimal number of resources as and when required. These challenges need to be addressed properly for making this event successful.
Handling of logistic challenges in Expo 2020
The existing residents of Dubai are 2 million, and in this event, there will be more 25 million visitors that would be hosted. To cater all the needs, a great change in the hotel and hospitality industry is required. To achieve all these things the steps taken include the assembly of assets, a greater number of transportation facilities, the high scale of supply chain management and many other changes.
Investment opportunity for the people who want to invest in Dubai
As Dubai is well-known and an economy with large opportunities, there are innumerable benefits of investing your money in the region. By the time, the place is generating a great number of prospects for the people who want to invest their valuable resources in some productive projects. Some of those people who need to invest and the reasons to justify their decision are as follows.
People looking for Development and Innovation
More intelligence is accumulated in the place which has the potential to pay for them. If a country does not have wage rates to justify the effort put in by the labor, diversity in the workforce will not be achieved which will lead to less innovation. People want to invest in a place where the growth potential is more and development is taking place at a faster pace. When the workforce is intellectual, they present innovative ideas that generate great products. It is also known to the smartest city in the whole world. Some big minds come here every year and invest their money in valuable ventures. So, the investors who require development and innovation in their business portfolio should consider it a great opportunity.
Investors who need growing economy
From the perspective of an investor, when they decide to invest in a particular property or any other business venture, the main thing that they see behind the idea is the growth rate. They are ultimately investing in the economy of the country, so the economic conditions really matter in this scenario. When the economic graphs of an economy are indicating the boom and growth in the recent years, the investor would be happy to spend his resources at such a place. According to CEO of Adgeco, Muhammad Dekkak, there is more expected growth in the region as compared to before. The future of Dubai indicates a great level of growth, and it has become the champion for planning and growth in the region of MENA. Although the oil crises were troublesome the economy is getting over this by the help of other sectors.
Security of the investment
The sense of security is the biggest motivation in this unstable business environment of the world. Especially, if you are interested in the real estate, it is the best place for you. The investors can have a great benefit by investing in the land in Abu Dhabi and Dubai. The reason behind increased growth opportunity is the development and growth of the construction industry. It is the central hub for construction. Even if you want to invest in a home for your family, it is really a great place. There are innumerable luxuries present in the area. The security feature is amazing. Even the whole building control systems are introduced in Dubai. These systems will help you to control your whole apartment without being physically present there.
Diversity in the avenues
In Dubai and Abu Dhabi, you have a great variety of options for investment. This is a known fact that the more you diversify your investment, your return will ultimately increase. This is the practical implication of that fact. If you are investing in a business venture, first of all, you will be presented with some options. Even after that, your growth potential will be enormous. Regarding property, the two main classifications are commercial and residential units. Even within these, there are many categories to support you. This diversity attracts everyone and no matter what type of investor you are, either small or large, you will have many options to invest your money.
Investors looking for High level of return
The amount of yield regarding rental returns is much higher as compared to other parts of the world. Every type of consumers and tourists visit this place every year. If you look at the spectrum of luxurious items towards the economy items, you will get all kinds of products easily. The main investment opportunity for the investors of the whole globe is the property in Dubai. Investors worldwide are making a huge amount of profits on their money by using this opportunity effectively. If we take the comparison from Singapore, London, New York and Hong Kong which are the elite cities of the world, the rental rates of Dubai are the largest. The infrastructure is amazing with all kinds of amenities. These all features make it an exceptional place.
Investors worried because of property taxes
The main worry for the investors in the property business worldwide is about the taxes they have to pay on the property. In the larger economies such as New York, London, Hong Kong and Singapore, the amount of property taxes is large, however, if we talk about Dubai, there are no taxes on the property. This offers a great motivation and saving opportunity. You do not have to pay the government any of the income you generate from your property exchange. You just have to buy the property, and the rest is nothing to pay. Now, in addition to increased rental yield, no taxes policy makes the place great opening for large and small property investors.
With all the factors discussed in this article, it can be concluded that the business and economic development of Dubai is expected to have a great boom in the new future especially because of Expo 2020.