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Dubai’s $8.7trn plan hailed as ‘latest step in economic evolution’

Dubai economic plan Reuters/Christopher Pike
"Over 300,000 global investors are helping build Dubai into the fastest-growing global city," tweeted Sheikh Mohammed bin Rashid al-Maktoum, ruler of Dubai
  • Foreign trade to reach $7 trillion by 2033, says ruler
  • Dubai aims to become fourth global financial centre
  • UAE business momentum was slowest in 15 months in December

The ruler of Dubai on Wednesday launched a strategy to double foreign trade and investment over the next decade and boost the emirate’s position among global financial centres. 

The AED32 trillion ($8.7 trillion) Dubai Economic Agenda, known as D33, includes 100 “transformative” projects to increase foreign trade to AED25.6 trillion by 2033, from AED14.2 trillion in the past 10 years, according to Sheikh Mohammed bin Rashid Al Maktoum.  

D33 aims to help the emirate attract foreign direct investment of around AED60 billion annually to 2033, add 400 cities as key trading partners over the next decade, and propel Dubai to fourth position after New York, London and Singapore in Bloomberg’s ranking of the world’s top financial centres.   

“Over 300,000 global investors are helping build Dubai into the fastest-growing global city,” Sheikh Mohammed tweeted. But he wants to go further, he added, to build new trade ties and attract more foreign companies to the emirate.   

Dubai is already the Middle East’s business and financial hub, occupying 17th place in the most recent edition of Bloomberg’s Global Financial Centres Index 32, published in September. Abu Dhabi, also in the UAE, ranked second regionally, followed by Doha, then Riyadh.

The emirate has worked hard to attract international firms and deepen trade relationships, and D33 is part of its strategy to fend off regional competition and cement its reputation as a global business hub. 

The first 10 of the 100 D33 projects include hatching a “plan for green and sustainable manufacturing”; carving out future trade corridors in Africa, Latin America and South East Asia; launching a scale-up programme for 30 businesses to become global unicorns (start-ups valued at $1 million or more) in emerging economic sectors; and drawing up a programme to attract the world’s best universities to Dubai. 

Other targets include integrating 65,000 young Emiratis into the job market; launching Sandbox Dubai – a scheme to test and commercialise new technologies; and developing a unified licence for all companies operating in the emirate.

Commentators welcomed Sheikh Mohammed’s announcement and called it the latest step in the economic evolution of an emirate that has already substantially diversified its economy from oil. 

“In the span of a few decades, Dubai has achieved economic milestones that very few other cities have been able to match,” said JS Anand, founder and chief executive of Dubai-based hospitality group Leva Hotels. 

“The D33 economic agenda is yet another positive initiative aimed at boosting and supporting various sectors of the economy, setting economic standards that will pull in investments, and driving economic welfare that will help the country set yet another milestone of becoming one of the top four financial centres in the world.”

Scott Livermore, chief economist at consultancy Oxford Economics Middle East, said: “While some of the priorities in the D33 announcement were known, the [plan] highlights the scale of ambition for economic growth and boosting pillars of the economy such as FDI and foreign trade. 

“Recent reforms at the Dubai and UAE level, as well as the Budget for 2023, were already priming the Dubai economy for a strong decade.

“The first package of projects seems focused on innovation and incubation of new entities to take advantage of emerging opportunities, whether that be new markets or new technologies, and helping Dubai-based companies become leaders in these areas.”

The targets and expectations set out in the D33 strategy “demonstrate the nation’s ability to serve as a platform for the global audience to explore – ultimately boosting its economy”, added Farhat Ali Khan, managing partner of law firm Century Maxim International. 

Other analysts highlighted the potential of the plan to help startups and small businesses.

“SMEs make up 95 percent of all businesses in Dubai so there needs to be a very strong focus on facilitating access to global markets and export readiness,” Wesley Schwalje, co-founder of Tahseen Consulting, said. 

“The infrastructure to support small businesses to go global has traditionally been underdeveloped in the UAE, and it is great to see Dubai focus on SME trade and export promotion.” 

Person, Tower, Building
Dubai Economic Plan (D33) is part of its strategy to fend off regional competition and cement its reputation as a global business hub. Picture: Reuters/Mohammed Salem

However, he said he was “sceptical” about Dubai’s ability to create 30 unicorns – saying the target was going to be “exceptionally difficult” to achieve without improvements to the venture capital fund formation regulations and fostering of a “technology talent ecosystem”.  

D33’s unveiling comes as short-term headwinds threaten to dent economic growth in the UAE and wider region.

The UAE Central Bank in December revised downwards its gross domestic product (GDP) growth forecasts for 2023 to 3.9 percent, from 6.5 percent earlier in the month, on global recessionary fears and a high inflationary environment. 

The latest data from S&P’s UAE Purchasing Managers’ Index (PMI), published this week, found that UAE non-oil business momentum was the slowest in 15 months at the end of 2022, with output levels and new business rising at their slowest rates since September 2021. 

Demand conditions were strong but waned by the end of December, the PMI showed, leading businesses to make fewer new hires.

Meanwhile, increased concerns about the global economic outlook caused businesses’ expectations of future output to slip to their lowest level since February 2021.

David Owen, economist at S&P Global Market Intelligence, said: “The UAE PMI fell for the second month in a row to 54.2 in December [from 54.4 in November], almost registering the lowest reading in 2022 (54.1 in January 2022), and providing further signs that growth momentum has moderated from its post- pandemic peak in the third quarter. 

“On the positive side, firms enjoyed a renewed fall in their expenses as commodity prices moderated and input availability improved, which supported an additional cut to selling prices.”