Dubai embraces economic revival

The Philippine Star

DUBAI (Xinhua) - The Gulf Arab sheikhdom of Dubai responded to the Mideast turmoil with a strong economic revival. When state-owned carrier Emirates Airline recently signed a five- year $180 million-contract with Formula-1 boss Bernie Ecclestone, Dubai sent a strong message to the world - it is back on track.

Dubai may be poor in oil (only 3 percent of its GDP is based on "black gold" exports), but it is rich in trade, tourism and banking. That was more than enough to lift the Gulf metropolis last year from the debris of the financial crisis to a path of new growth.

Activities in the start of 2013 indicate the trend might continue, in line with the old stock trader's saying - "As January goes, so goes the year."

The local stock exchange Dubai Financial Market gained 16.34 percent in January. In the last 12 months, the gauge surged by 25 percent. Housing prices increased 23 percent in the last 12 months, according to real estate services firm Asteco.

Despite the ongoing turmoil in Syria and its new tensions with Israel, continuous anti-government protests in Egypt and the never- ending row between Iran and the West in nuclear issues, Dubai's ruler Sheikh Mohammed Bin Rashid Al-Maktoum has managed to position his emirate as a beacon of stability in the region.

"This economic revival is not a bubble," said Marios Maratheftis, global head of regional research at Standard Chartered bank in Dubai, adding that most banks reported lower provisions for bad loans in 2012 and lending restrictions implemented by the central bank prevent customers from excessive borrowing as they did before the crisis. According to bank HSBC, employment figures are also heading upwards.

Meanwhile,  Sheikh Mohammed Bin Rashid Al-Maktoum announces one new mega-project after the other. In late January, the sheikh, also vice president and prime minister of the United Arab Emirates (UAE), ordered the construction of the Nakheel Mall on the peninsula Palm Jumeirah. The man-made luxury tourism hotspot was in the focus of Dubai's near-default at the end of 2009, when state-owned developer Nakheel had to be bailed out with $10 billion given by the sheikhdom of Abu Dhabi, where 7 percent of the world's oil is located.

The emirate's debt worries are officially history, albeit government-related entities in Dubai still have to pay off $68 billion liabilities in 2013-2015, according to the International Monetary Fund.

Earlier in December, Sheikh Mohammed announced it would build the largest shopping mall in the "city within a city," a project announced in December and named after him. Dubai already has the largest shopping center, the Dubai Mall which received in 2012 65 million visitors, a world record.

Dubai already is home to the world's highest tower, the 828- meter Burj Khalifa, the highest hotel (the 354.7-meter JW Marriott Marquis) and the world's highest restaurant, the Atmosphere at level 122 in the Burj Khalifa.  

Meanwhile, the sheikhdom attract major companies like a magnet. The online networking services LinkedIn opened its first MENA office in Dubai in October last year. Online payment services PayPal will follow this year. Liechtenstein's biggest lender LGT and US financial services giant Wells Fargo expanded to Dubai with branches in the Dubai International Financial Center (DIFC) in January.

The rush to the emirate has positive spillover effects on the retail sector, on industrial output and the hospitality sector. " At the moment, our hotel's occupancy is at 98 percent," said Rupprecht Queitsch, the general manager of the JW Marriott Marquis Hotel. Nearly all resorts are fully booked during the peak season. Dubai airport CEO said earlier in January, that DXB, as the hub is called in pilot's lingo, surpassed Hong Kong in terms of passenger capacity and became in 2012 the world's third largest airport, hosting 57.6 million passengers.

It seems that neither regional woes nor global imponderables can stop the sheikhdom's new boom.  











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