Dubai on track for fastest economic growth since before financial crisis

As Dubai establishes an Investment Development Agency to attract investment, Standard Chartered and Emirates NDB expect the emirate's strong growth to continue.

Emirates NBD predicts that Dubai’s economy will grow 4.7 per cent this year, versus 4.5 per cent last year. Satish Kumar / The National
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Dubai's economy should motor at its fastest pace since before the global financial crisis as investor interest rebounds this year, underscoring the government's move to set up an investment regulatory body.
Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, passed a law on Monday establishing the Dubai Investment Development Agency.
The agency will be tasked with boosting Dubai's reputation as an international business centre for attracting investment and laying the foundations for a proper investment environment, according to a statement carried by Wam, the official news agency.
"Attracting investment will continue to be part of Dubai's formula," said Shady Shaher, senior economist for Middle East and North Africa at Standard Chartered. "Dubai has recovered quite strongly over the last couple of years and 2014 will continue that theme. Trade and investment remains focused around its fundamental strengths – trade, tourism and logistics."
Emirates NBD forecasts Dubai growth of 4.7 per cent, compared to 4.5 per cent last year. Growth has not reached such heights since before the emirate's financial crisis in 2009.
The wider UAE economy should expand by 4.5 per cent this year, estimated Mr Shaher, up from 4.4 per cent last year.
Dubai's economy has received a boost since 2011 because of its reputation as a haven of stability following the Arab Spring. Arab investors purchased property, while some relocated their business from other parts of the region. Investor sentiment has also been lifted by the easing of the emirate's debt crisis as well as the securing in November of the right to host the World Expo 2020.
"I have seen that since the beginning of last year there has been an increase in interest, especially companies from Europe that decided after the [Dubai] crisis to set up here," said Jörg Seifert, a lawyer with Dubai-based Al Sharif Advocates & Legal Consultants. "Some companies were doing business with Dubai before the crisis and once that eased they felt it was the right time to set up."
The most recent foreign direct investment data shows flows reached Dh29.4 billion in 2012, up by 26.5 per cent on the year before, according to Dubai FDI, the foreign investment office. It is not yet clear how Dubai FDI will work alongside the Investment Development Agency. Both are under the control of the Department of Economic Development.
The new agency will also be responsible for laying the framework for an investment climate, as well as "consolidating investor trust in Dubai's investment environment", said Wam. It will promote projects and investment opportunities available.
It will also be responsible for drawing up the general policy and strategic investment plan of the emirate, in addition to coordinating with other government bodies to create "preferential advantages" that spur investment, said Wam. The agency will propose economic sectors that require investment, as well as drawing up a database of existing projects in Dubai and relevant data for companies wanting to set up.
Underlining the emirate's growing attraction for business, the property adviser CBRE released a report on Monday showing that almost one in three global companies had identified the Middle East as an area for potential growth. Within the region, Dubai remained the primary destination of choice, it said.