Dubai economy grew 16.7pc
DUBAI — Dubai's economy grew 16.7 per cent last year, while it grew by close to an average of 10 per cent during 1999-04, according to a report by Nexus Capital SA, a leading Swiss financial services firm.
The inaugural Dubai Economic Report identifies rapid economic growth across a wide range of strategic sectors as the key driver behind the emergence of Dubai as the regional business hub of the Middle East.
The report says that transport, telecommunications, finance, real estate and construction accounted for nearly 60 per cent of Dubai's economic expansion between 1999 and 2004. The Gross Domestic Product (GDP) per capita in Dubai now exceeds $25,000, similar to the level of advanced economies in Europe and North America, and higher than Spain and South Korea.
The report highlights the Emirate's reduced dependence on natural resources.
“Oil is the only sector that experienced virtually no growth between 1994 and 2004. In 1975, about 45 per cent of economic output was in the oil sector, and ten years ago it accounted for about 19 per cent of economic activity. In 2004, that figure fell to below 7 per cent in spite of record high oil prices,” said Dimitre Michev, Vice President of Finance and Research, Nexus Capital
“The economic growth of Dubai is not a natural resource-driven expansion. The economy is increasingly innovation-driven with innovative products and services providing the dominant sources of competitive advantage. In the last five years, real estate and construction have become quite significant contributors to economic growth, but they are by no means the leading source of growth. The leaders are telecommunications, transportation, and manufacturing.”
While the report relies heavily on statistical analysis, it provides snapshots of Dubai's economy at three points: 1994, 1999, and 2004.
“Statistical analysis is used to support the central thesis: Dubai has transformed itself and is firmly entrenched as a hub across a wide variety of sectors.” Chester Rodeheaver, Nexus Capital's Vice President of Corporate Finance and Strategy, said.
“Dubai is home to a growing and increasingly sophisticated financial sector. Dubai Financial Market, which began operations in 2000, has seen its market capitalisation increase by double digits every year, and at a higher rate each year. The September 2005 opening of DIFX, the exchange at Dubai International Financial Centre, will further bolster the Emirate as a regional, and eventually global, financial hub,” he added.
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