By Tamara Walid
The Department of Economic Development (DED) in Dubai has reported a 16% growth in the emirate’s economy, which is expected to have reached about US$37 billion in 2005.
The Department of Economic Development (DED) in Dubai has reported a 16% growth in the emirate’s economy, which is expected to have reached about US$37 billion in 2005. At this rate Dubai is expected to surpass China – one of the fastest growing economies in the world with an 8.5% rate. The DED attributed the current growth to policies that support private enterprise, which has generated confidence in the economy. Mohammed Ali Alabbar, director general of DED, said that Dubai’s rapid growth had been stabilised in 2005 and reaffirmed that the growth of its economy is sustainable in the long run.
He anticipated that the emirate’s economic growth would continue its steady pace and hit the US$40.8 billion mark in 2006, if supported by business-friendly governmental policies. “At current prices, Dubai’s GDP has recorded a significant increase and is estimated to reach US$37 billion in 2005 up from US$32.2 billion in 2004,” said Alabbar.
“When compared to US$16.96 billion in 2000 and US$12.2 billion for the year 1996, this puts the accumulated annual growth of Dubai’s economy in the last decade at among the highest rate of growth in the world,” he explained.
Alabbar emphasised the success of the emirate's diversification policy, kickstarted by the DED’s first strategic plan in 1997. “The non-oil GDP grew by 14.92% in 2005 and is estimated to reach US$34.96 billion, up from US$3.2 billion in 2004 and US$25.2 billion in 2003. Compared with figures for 1996 when the non-oil GDP was only US$10.4 billion, this shows a record rise of 236% in the last decade,” he said.
Alabbar also claimed that the significant growth in Dubai’s economy over the last few years was a result of the government’s policies. “In formulating these policies, the Government of Dubai has always received extensive support from the private sector, which has come forward with innovative initiatives and suggestions, to further develop the business environment in the emirate,” said Alabbar, acknowledging the contribution of the private sector to Dubai’s economic growth.
In addition to the growth of non-oil sectors, high oil prices have also contributed to Dubai achieving steady growth rates, Alabbar added.
“Backed by consistently high oil prices, Dubai’s oil GDP grew by 18% over last year’s US$1.8 billion and is estimated to touch US$2.15 billion, although the contribution of oil to Dubai’s overall GDP has remained close to the 2004 levels at 5.8%,” said Alabbar.
“In turn, the contribution of the non-oil sector to the emirate’s GDP was 94.20 per cent in 2005,” he added.
It is perceived that the government initiatives had enabled a continuous inflow of foreign capital — a trend that expected to be maintained with the prevailing lucrative return on investment in key sectors. The DED is now set to focus, in addition to the main economic sectors, on setting up a viable industrial sector, which will serve to enhance ‘real’ economic growth, through the establishment of industrial incubators.