Dubai’s economy undergoing structural shift toward long-term sustainability, says Dr Omar Bin Sulaiman

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The composition of Dubai’s economy will undergo a structural shift over the next few years toward sustainable long-term sectors such as transportation, healthcare, education, tourism and financial services, Dr Omar Bin Sulaiman, Governor of the Dubai International Financial Centre (DIFC), told members of the Dubai Chamber of Commerce & Industry on Thursday.

“This shift in the relative importance of various sectors of the economy is, in fact, a central component of the Dubai Strategic Plan 2015, but it’s happening more quickly than envisioned by the plan, largely due to the impact of the global crisis,” said Bin Sulaiman during the Dubai Chamber’s quarterly Business Breakfast, its second of 2009.

“Additionally, because many of these sectors impact residents’ quality of life, the shift currently underway will further enhance Dubai as a place to live, especially alongside the government’s continued support of culture and the arts,” Bin Sulaiman told the participants.

At the same time, high-growth industries such as real estate will continue to be integral to the make-up of Dubai’s economy, he said.

The networking event is part of the Dubai Chamber’s active support and promotion of the interests of the emirate’s business community, as well as the Dubai Government’s policy of dialogue and engagement with the private sector. “This event aims at facilitating direct communication between public and private sectors where our members are presented with an opportunity to put forward issues and challenges that they face before the concerned officials.” Stated HE Hamad Buamim, Director General of Dubai Chamber of Commerce & Industry, during his presentation on the latest developments witnessed by Dubai business community.

Buamim stated that Dubai’s Economy is witnessing the first signs of recovery and investors are showing more confidence. “According to the latest findings and figures profit rates in the banking sector has only dropped by 4%, while assets increased by 2%. Passenger traffic recorded by Dubai International Airport increased by 6.5% in April, and it is expected that this number reaches 10% in 2009, in a strong indication that Dubai is still a favored business and tourist destination, and it is ranked as the top FDI destination city in the World by the FT report” stated Buamim, while highlighting other equally significant growth rates recorded by the tourism and hospitality industry, electricity and water demand, in addition to Dubai’s recent population growth by 8%.

“Despite the crises Dubai’s current exports are still growing in comparison with the exports of 2007, since 2008 was an exceptional year of growth and 2007 is the norm and we still expect to see more growth,” he concluded.

During his keynote speech Dr. Omar Bin Sulaiman added: “We are blessed to be living in an open and flexible market economy that allows us to adjust quickly in the face of rapidly changing global conditions. As a result, we soon will begin to see signs of a mature economy taking shape in Dubai and the UAE.”

Despite these shifts, trade will remain a significant contributor to the emirate’s GDP, especially given the substantial investment in Dubai’s transport and logistics infrastructure and the more than 200 destinations served by its seaports and airports.

And while acknowledging that this economic shift comes with pain to some companies and employees, he said the issue is more about a shift in the mix of jobs, rather than a decline in employment. “While there has been a loss of jobs in real estate and related sectors for example, positions are opening up in healthcare, education, hospitality, financial services and trade.”

Examples of this include Emaar who recently announced the creation of 10,000 jobs in Dubai Mall as well as its hospitality and entertainment divisions, the more than 2,000 new employees that will be hired by Dubai Metro by the time it opens in September, and the thousands of healthcare workers who will be employed by clinics and hospitals opening in Dubai Healthcare City and elsewhere in the emirate.

With regard to the financial services sector, Bin Sulaiman said company applications to DIFC’s regulator, the Dubai Financial Services Authority, are running higher in 2009 to date than over the same period in 2008.

“This means that the DIFC will continue to be a major driver of growth in the number of high-end professionals working in Dubai, both today and in the future. For example, at the end of 2008, there were more than 14,000 of these professionals working at the DIFC, a number set to grow to 60,000 by the time the DIFC is completely built,” Bin Sulaiman said.

Among the many steps the government is taking in its primary role as infrastructure provider and business enabler is support of the skilled workers already here in Dubai, through flexibility regarding visas of those who have lost their jobs.

Moreover, the Dubai Government is working on creating a fund to support Dubai-based entrepreneurs who are running small- and medium-sized businesses, an initiative led by the Dubai Department of Economic Development.