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Dubai a Safe Haven for Investors

Would you consider Dubai to be a ‘safe haven’ and an investor-friendly global business hub, amidst the regional instability? While other countries in the region have been making the headlines for all the wrong reasons, Dubai is making the headlines for all the right reasons.

Following the global financial and debt crisis of 2008 and 2009, it seems the political unrest sweeping across parts of the Arabian region in 2011 has resulted in some positive economic developments in Dubai, which is now largely regarded as a safe haven for investors. According to the latest economical developments, to include substantial growth of its tourism and service industry, Dubai is likely to become a key Gulf business hub.

Dubai remains a prosperous destination for those considering investing in the UAE, with a recent economic report proving the region, particularly Dubai, is moving from economically strong to stronger. Dubai’s diverse economy, political and economic stability, highly developed infrastructure and geographical position acting as a gateway between Asia and Europe demonstrates this ‘safe haven’. The Emirate’s economy, the second-largest in the country, is one of the most diverse economies in the Gulf region. The revenue in 2011 was around £1.7 billion, and the economy seems to be heading in the same direction in 2012. This increase in GDP was followed by major growth in the Emirate’s export market, which rose by 44.3 per cent in 2011.

The non-oil sector accounts for 96% of GDP. Tourism, transport, trade, logistics, retail, and construction are all thriving and Dubai is now ranked the 9th largest tourism destination in the world. The health sector is also growing strongly. There are now 32 international universities in Dubai including Middlesex University. The transport and communications sector rose by 2.7 per cent, while hotels and restaurants saw a 13.9 per cent rise, which contributed to GDP growth by 1.5 per cent. Manufacturing sector, taking up a 14.1 per cent portion of GDP, also showed a significant growth of 11.7 per cent, contributing to 1.5 per cent of GDP expansion. UK Trade & Investment highlights environment and alternative energy; construction; education and training; financial services; healthcare; mass transport and power as sectors offering good opportunities.

Dubai’s economy bounced back in 2010 and is forecasted to grow in excess of 3% per annum up to 2012-13. Compared to other countries in the GCC, Dubai is in good shape economically, although debt accounts for more than 100% of GDP. The financial and tourism sectors in particular are benefiting from the unrest elsewhere in the region, and Dubai is also benefiting from surging intra-emerging market trade flows. Even the real estate sector has made a recovery. However Dubai needs to implement reforms if is to realize its full potential.

“The debt crisis has taught Dubai not to put all its eggs in one basket, but to go back to being a trade and logistics hub with an infrastructure unmatched by any other country in the region – Dubai has gone back to what it does best,” said Ayesha Sabavala, Economist Intelligence Unit, while Oliver Cornock, Oxford Business Group, commented “Dubai has been able to consolidate massive gains and to regain the ground lost in recent years.”

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