The six-month event is a long-term investment for the UAE, and is expected to significantly impact the country's economy
Since Dubai was first awarded the rights to host Expo 2020 in 2013, local officials have repeatedly said that the event’s impact on Dubai’s economy would be significant. Just how significant, however, was starkly highlighted this week with news that the event will provide an economic boost worth $33.4 billion through 2031.
According to a report from EY, the event is also expected to generate as many as 905,200 full-time equivalent (FTE) job-years in the UAE between 2013 and 2031, approximately the equivalent of 49,700 FTE jobs each year in the same period. The figure does not include the estimated 30,000 volunteers.
“Expo 2020 is an exciting long term investment for the UAE and is expected to have a significant impact on the economy and how jobs are created directly and indirectly,” says Matthew Benson of EY’s Transaction Advisory Services in the Middle East and North Africa. “As the host, Dubai aims to use the event to further enhance its international profile and reputation.”
Expo 2020 is expected to have a significant impact on the economy and how jobs are created directly and indirectly
The report noted that the economic benefits to Dubai from Expo will come in several phases: pre-Expo, during-Expo, and the legacy phase, each of which will generate jobs and economic activities of various kinds.
In the pre-Expo phase – which spans from 2013 until the beginning of the event begins in October 2020 – the key economic impact has come from the employment generated by on-site construction and associated jobs and spending.
Of the period’s total gross-value added (GVA) to GDP of $10.3bn, 68 percent is expected to be felt in the construction sector, with another 20 of spending, roughly equal to $1.28bn, directed towards Dubai’s SME sector.
During the six months of the event between October 2020 and April 2021, an additional $6.2bn is expected to be added to GDP, primarily stemming from the visitor expenditure. On-site visitor spending includes items such as entry tickets, as well as purchases of food and beverages, while off-site spending items includes flights to and from Dubai, hotel stays, retail and local transportation.
Visitor spending during this period is expected to be bolstered by operational spending directly tied to Expo, such as employee and contractor salaries and maintenance costs at the Expo site. Other spending will be directed towards operational costs that would have occurred in the absence of Expo, such as investments in taxi fleets and bus services.
Of the during-Expo period, an estimated 39 percent of the impact is likely to be felt by restaurants and the hospitality sector, with significant impacts expected to be felt in the events and services sector industry.
The main economic impact of Expo, EY predicts, will be felt in the decade after the event itself. During this period – which will run from May 2021 to December 2031 – the Expo site will be reborn as District 2020, which will include a variety of tenant companies and an expanded Dubai Exhibition Centre.
Of the environment constructed for Expo, 80 percent will be retained for the new district, which will eventually be expanded into a ‘city’ of its own, spanning an area of over four million square metres, with many tenant companies – ranging from corporations to SMEs – focused on technology and innovation. Already, confirmed tenants include Siemens and Accenture.
“Although the Expo event lasts less than a year, the positive economic impact continues far beyond the event,” says Jamie Torrens, the director of economic advisory and transaction advisory services at EY.
During the ‘legacy’ era that will last through 2031, the Expo’s impact to GDP is estimated at $16.9bn. Of this, about 87 percent is likely to be felt in the events and business services sector. Additionally, more than half a million FTE job years are predicted to be generated during the same time.
“Expo 2020 is a critical long-term investment in the future of the UAE,” says Najeed Mohammed Al-Ali, Executive Director of the Dubai Expo 2020 Bureau.
“Not only will the event encourage millions around the world to visit the UAE in 2020, [but] it will also stimulate travel and tourism and support economic diversification for years after the Expo, leaving a sustainable economic legacy that will help ensure the UAE remains a leading destination for business, leisure and investment.”
The EY report also notes that there non-quantifiable long-term impacts expected from Expo, such as improved bilateral trade relations with other countries and an increased profile for Dubai on a global scale.