Dubai
As H.H. Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai and Prime Minister of the United Arab Emirates, explains, “The United Arab Emirates is like a tree that has been protected by its leadership so that it will grow strong and bear fruit in abundance
Dynamic Global Hub Still Going Strong
Long-term strategies continue to bear fruit
Enlightened leadership since the United Arab Emirates was officially formed in 1971 has definitely born fruit. The federation’s GDP rose by 23.4 percent in 2006 to reach AED 599.2 billion, while the balance of payments surplus rose by 44.3 percent and the total assets of local banks increased by 34.7 percent to reach AED 859.57 billion. The Emirates now enjoy one of the world’s highest standards of living, and indicators suggest that this success story will continue.
Increasingly diversified economy
High oil revenues (which increased by 29 percent in 2006 to reach AED 223.4 billion) and rising oil prices have of course benefited the United Arab Emirates since its beginnings, but the government has made sure that even if oil revenues decline, the local economy will continue to thrive.
In 2006, a 20.3 percent growth in non-oil sectors, which now account for 62.7 percent of total GDP, reflects the government’s successful diversification strategy. In addition, thanks to the government’s willingness to remove trade barriers, liberalize the business sector and promote private-sector growth, the United Arab Emirates has also created the Arab world’s most competitive economy, according to the latest Arab Competitiveness Report.
This very modern economy has a history stretching back 100,000 years. Once a collection of H.H. Sheikhdoms, the area came under the protection of Great Britain in the 19th century when it was known as the Trucial States. The local economy was traditionally based on trade, pearl-diving and shipbuilding, but the discovery of oil in the 1930s transformed these lands forever. The first oil shipments from what is now the United Arab Emirates were from Abu Dhabi in 1962, followed by shipments from Dubai in 1969.
Cooperation and long-term strategies
H.H. Sheikh Zayed bin Sultan Al Nahyan, ruler of Abu Dhabi at that time, and H.H. Sheikh Rashid bin Saeed Al Maktoum, then the ruler of Dubai, adopted a strategy of cooperation and long-term planning that continues today. In 1971, thanks to their efforts, the United Arab Emirates was formed as a constitutional federation with six member countries: Abu Dhabi, Dubai, Sharjah, Umm al-Qaiwain, Ajman, and Fujairah. Ras Al Khaimah joined the following year.
H.H. Sheikh Zayed and H.H. Sheikh Rashid determined to invest their countries’ vast oil wealth in development projects that would ensure a prosperous future as well as better quality of life for their citizens. Initially, government played the leading role in all projects, but as the economies of the Emirates have matured, particularly in Abu Dhabi and Dubai, the private sector has taken on a larger role and foreign investors have been welcomed. As H.H. Sheikh Mohammed says, “It is people who will shape the future, not machines or capital.”
Dubai, whose oil resources are limited, has been particularly dynamic in developing its private sector, and Dubai-based enterprises have made their mark throughout the world in many fields as well as making Dubai one of the world’s leading business hubs.
The United Arab Emirates’ enlightened approach to development is reflected in its strategic plan for 2008 to 2010, the country’s first nationwide strategic plan. It focuses on international competitiveness, diversification, and corporate governance, creating more opportunities for local citizens, and providing more investment opportunities. Sustainable development is the key goal.
The UAE’s fast-growing economy and many investment incentives attracted USD 37.1 billion in foreign direct investment in 2006. Meanwhile, the Emirates are increasing their own foreign investments, investing a total of USD 11.83 billion abroad in 2006. Dubai is leading the way.
Political stability and dynamic leadership
The United Arab Emirates is led by President H.H. Sheikh Khalifa bin Zayed Al Nahyan, current ruler of Abu Dhabi, who has held this position since 2004. The government also includes a Council of Ministers led by the prime minister, with each emirate represented by at least one minister. In Dubai, the very popular ruler, H.H. Sheikh Mohammed, is known for his energetic, pro-business approach, and as Prime Minister he is also playing a larger role at the federal level. The United Arab Emirates’ three-year plan, for example, is being implemented and monitored directly by the prime minister’s office.
Analysts believe that the United Arab Emirates will continue to liberalize and diversify its economy and create high-potential new investment opportunities for years to come, and Dubai is expected to continue to serve as a model of economic openness, forward-thinking government policies and private-sector dynamism.
Proactive Dubai sets the mark even higher
Dubai’s strategy of enlightened long-term strategies, economic diversification and daring development projects has clearly paid off: the emirate achieved the ambitious goals of its ten-year Vision 2010 strategy five years ahead of schedule.
The government’s goal in 2000 was to increase GDP to USD 30 billion and per-capita income to USD 23,000 by 2010; instead, by 2005, Dubai’s GDP had already reached USD 37 billion and per capita income totaled USD 31,000.
Now Dubai has developed a new plan to build on its accomplishments. As Dubai’s ruler, H.H. Sheikh Mohammed bin Rashid Al Maktoum, explains, “With achievements come new hurdles, responsibilities and challenges.”
The Dubai Strategic Plan 2015 focuses on economic and social development; infrastructure; land and environment; public-sector excellence; and safety, security and justice. A priority is to improve the lives and working conditions of all Dubai’s residents, for example through finding solutions for the traffic problems and rising living costs that the emirate has faced in recent years.
Potential oil-price fluctuations will not be significant in the new plan because, as H.H. Sheikh Mohammed says proudly, “We have succeeded in diversifying Dubai’s sources of income and reduced dependence on oil to the point that oil’s contribution to GDP is a mere 3 percent today. We were in a race against time, and we won.” The services sector now accounts for an impressive 74 percent of the emirate’s GDP.
Goal of 11 percent annual GDP growth
The plan calls for Dubai to sustain its real economic growth at a rate of 11 percent per year to reach a GDP of USD 108 billion by 2015, with per capita GDP to grow to USD 44,000. The plan also aims to create around 890,000 new jobs.
H.H. Sheikh Mohammed singles out tourism, transport, trade, construction, and financial services, in addition to new sectors with sustainable competitive edge, as key growth sectors that will help the emirate achieve these goals. He also calls for greater emphasis on human capital, productivity, innovation, quality of life, policy and institutional frameworks, and laws and regulations.
Dubai aims to become a leader in the new international knowledge economy. As H.H. Sheikh Mohammed puts it, “Building a road or a bridge may take a year or two, but developing people takes a lifetime. We live today in an era of ever-changing knowledge, which requires continuous learning.”
Dubai Cares
“We can reshape the future of underdeveloped countries in the region and globally ”
Mohammed Al Gergawi Minister of State for Cabinet Affairs and Chairman of Dubai Holding
When he launched Dubai Cares in September this year, H.H. Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai, called on the private sector to support the humanitarian initiative, which is designed to improve educational opportunities for school children in poor countries all over the world. “Together, we can reshape the future of underdeveloped countries in the region and globally,” he said.
Local firms, including many American companies operating in Dubai, quickly responded to H.H. Sheikh Mohammed’s appeal. Just four days after Dubai Cares was launched, contributions had already reached the project’s initial target of AED 250 million (USD 54.5 million), and within eight weeks the total had risen to AED 1.7 billion. On November 25, H.H. Sheikh Mohammed announced that he would personally double the contributions already made, to bring the total donation to Dubai Cares up to AED 3.4 billion.
As H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Chairman of Dubai Executive Council, points out, “The response to Dubai Cares reflects a collective humanitarianism taking root in our society and is testimony of the will of the people and institutions of Dubai to contribute to the welfare of the less fortunate around the world.”
Dubai Cares will use the donations in some of the world’s poorest countries to build and renovate schools, train teachers, promote gender equality in education, provide teaching materials, offer scholarships, organize school meal programs and establish annual medical check-ups for students. The venture reflects H.H. Sheikh Mohammed’s belief in the importance of humanitarian efforts, particularly concerning education. Earlier this year, he announced a donation of USD 10 billion to support educational opportunities throughout the Middle East.
The Dubai Cares campaign also demonstrates Dubai’s commitment to helping achieve the United Nations’ Millennium Development goal of providing primary education for every child in the world by 2015. As H.H. Sheikh Mohammed points out, “The importance of education has increased tremendously in the ‘knowledge age’. Promoting education and providing the support it needs to flourish are now prerequisites for global development.”
Corporate citizenship
Of the 120 million school-age children throughout the world, around a third lack access to at least five years of education, judged as the minimum to achieve literacy. Supporting Dubai Cares gives companies a chance to respond to this need while also boosting their image, particularly in the Arab world where the Islamic faith advocates helping those less fortunate.
Of the many companies that have contributed to the initiative, Dubai World made the single largest contribution, AED 260 million (USD 71 million). Sultan Ahmed bin Sulayem, Chairman of Dubai World, comments, “We believe that it is incumbent on Dubai World to do its best in support of this noble cause.” Mohammed Al Gergawi, Minister of State for Cabinet Affairs and Chairman of Dubai Holding, explains, “Dubai Cares takes the local private sector’s contribution beyond Dubai. We see ourselves as corporate citizens of the world.”
