Middle East & Africa
Dr. Bin Sulaiman further said that DIFC is taking up a strategic project to strengthen links between emerging markets. "We are part of the global community, we are learning and we are aware. We are taking proactive measures to continue our growth, we will continue to manage and assess our strategies, and we will make adjustments according to our needs. Hope in the global financial sector is with emerging markets. Dubai and UAE give access to hope."
About the low impact of the financial crisis on Dubai, Dr. Bin Sulaiman said: "The drivers of Dubai's growth, the 'Dubai' model remain strong: openness, excellent infrastructure and logistics, a world-class regulatory framework, strong macroeconomic fundamentals, and knowledge clusters that attract FDI, companies and people. Those drivers, supported by a strong banking and financial sector along with a clear vision and the will to succeed will enable Dubai to weather the storm." Growing rapidly as a regional financial centre, Dubai is boosting the emergence of the Gulf region as a prominent centre of activity in the global financial industry, according to a recent study undertaken by UK-based global research organization Chatham House. The study titled 'The Gulf as a Global Financial Centre: Growing Opportunities and International Influence' examines the prospects for the economies of the Gulf Cooperation Council (GCC) countries and the potential development of the region as a global financial centre.Elaborating on Dubai's leadership in the region's financial industry, the study cites its high ranking in the City of London's Global Financial Centres Index (GFCI) for March 2008. The index ranked Dubai 24th, ahead of cities like Shanghai, Stockholm, Brussels, Mumbai and Madrid. The Chatham House report emphasizes that outside Europe and North America, Dubai was ranked fifth in the world in the London survey. Dubai was also cited by the survey as being the number one among financial centres to "become significantly more important over the next two to three years." As a destination where businesses are thinking of opening in the next few years, Dubai was ranked number one. Bahrain was ranked 39th while Qatar was ranked 47th in the overall GFCI Index.With the new initiatives being undertaken by DIFC, Dubai is poised to develop further as an industry hub that rivals many of the world's most prominent financial centres," said Dr. Omar Bin Sulaiman, Governor of the Dubai International Financial Centre (DIFC).ExpectationChatham House said the GCC could overtake both Australia and Tokyo in the rankings over the next decade. The GCC economy has approximately tripled in size in just five years and the combined GDP will be well above $1 trillion in 2008, while the states' external financial wealth in the form of sovereign wealth funds (SWFs) and foreign exchange reserves alone are more than double this figure, the study said.Dr. Paola Subacchi, research director for international economics at Chatham House, London, said: "The report shows the dynamism of the GCC economies and their capacity to be serious players in the world economy. Chatham House is pleased to have worked together with the three financial centres of the region - DIFC, QFCA and Bahrain EDB - for the completion of this project."GCC: Developed economy The GCC countries need to "aggressively" correct the tendency for observers to view the region as a 'developing economy', according to Chatham House.The GCC's average GDP per capita is now almost on a par with many developed economies such as Spain while its non-energy GDP per capita is well above emerging-market levels, it noted. Cautioning policy-makers in GCC countries against ad hoc experimentation in policies that could endanger growth and the region's 'brand', the study said "any changes in the exchange rate system should be carefully coordinated to enhance confidence and avoid potential confusion and volatility in regional cross rates, which might be both distracting and damaging to the image of GCC cohesion. The move to a common currency would avoid such pitfalls and offer a significant boost to financial-market activity." Against this backdrop, an extraordinary meeting of the UAE Cabinet presided over by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai on Oct.21 approved the Dh42.2 billion Federal Budget for 2009.The total outlay of this biggest ever budget is 21 percent higher than last year's Dh34.9 billion.Economists and business leaders said that the significantly higher budget this year once again proves that the UAE has the financial strength to withstand the global turmoil."The budget demonstrates that the country's finances are strong enough to withstand the global financial turmoil," said economist Dr Mohammad Al Asoumi."In recent weeks the government has announced a series of measures to strengthen its financial system," he added. Earlier this month, the government pumped Dh70 billion into the country's banking system as part of a Dh120-billion package to boost liquidity in the banking system. Last week, the government also guaranteed all bank deposits and inter-bank liabilities."This budget is a confirmation of the UAE's fiscal strength. The higher budget allocation will send positive vibes to the private sector," said Dr Nasser Al Saidi, Chief Economist of the Dubai International Financial Centre.This year the Federal Budget has allocated Dh9.7 billion (23 percent of the total outlay) and Dh15.6 billion (37 percent) to the education and services sectors respectively."The significantly higher budget outlay this year is a clear signal to both the local and international business community that the UAE has the ability and the willingness to pursue the growth path," said Hamad Bu Amim, Director-General of the Dubai Chamber of Commerce and Industry.As part of the budget meeting, the Cabinet was presented with a report on the projected revenues of government departments. The report also contains the annual growth rates of income and expenditure over the past ten years. The report shows that the income of ministries will grow in 2009 to about Dh24 million, up from the Dh7 million recorded in 1999. Shaikh Mohammad expressed satisfaction with the early presentation of the budget and attributed this success to the efforts of all ministries. The Vice-President urged all ministers to strive to improve the performance of their respective ministries to meet the challenges of modern times and enable the UAE to maintain its status as a nation of institutions, supremacy of the law and excellence.He also urged his Cabinet members to remain persistent and not to direct the affairs of their ministries from behind their office desks but to personally follow up issues to serve the national interest. The meeting was attended by Shaikh Sultan Bin Zayed Al Nahyan, Deputy Prime Minister, and Shaikh Hamdan Bin Zayed Al Nahyan, Deputy Prime MinisterReacting positively to the measures, economists and the business community welcomed the increase in expenditure and huge allocations for services and education in the UAE budget.They said the Dh42.2 billion budget is also an indication of the country's financial strength despite the global turmoil."The federal budget is a reassurance that the UAE is not affected by the global financial turmoil. The significantly higher budget outlay this year is a clear signal to both local and international business community that the UAE has the ability and the willingness to pursue the growth path," said Hamad Bu Amim, director-general of the Dubai Chamber of Commerce and Industry.Dr Mohammad Al Asoumi, an economist, said the UAE Government has once again shown that the country's finances are strong enough to withstand the global financial turmoil. "In recent weeks, the government has announced a series of measures to strengthen its financial system. The significantly higher budget allocation to sectors such as education and health demonstrates that the country is strong enough to pursue its projects in all sectors," he said.Dr Nasser Al Saidi, chief economist at Dubai International Financial Centre, similarly noted that "this budget is a confirmation of the fiscal strength of the UAE economy."He said higher budget allocation will send positive vibes to the private sector."The budget once again proves that the country will pursue its strategy of growth through continued investment in infrastructure, education, health and social sectors," he added.Aber Khalfan Al Hameli, chairman of Aber Group, said the budget should be seen in the light of global developments, which are currently driven by negative sentiments."All of us should hail the 2009 budget considering that the rulers have taken extra care to provide more funds (21%) to ensure continuous growth. The push for education and services sectors is a refreshing and a welcome move, and I believe that this will provide the right stimulus for 2009," he said."In the past the government had give push to the banking and real estate sectors and that led to the phenomenal growth of this country. It is now necessary to enter the next level of growth wherein knowledge-driven sectors [education and healthcare] will become the growth engines of the GDP," Al Hameli said.The education and services sectors have been allocated 23 percent and 37 percent respectively of this year's budget.Yousuf Ali MA, Managing Director of EMKE Group and Director of Abu Dhabi Chamber of Commerce and Industry, said: "As expected a budget that truly reflects the progressive and visionary leadership of this great country. The very fact that major thrust has been laid on the education and health sectors clearly emphasizes the great importance the government gives to the welfare of its citizens and residents.""Also, the fact that the budget has been passed earlier than usual will immensely help each ministry and department to formulate their action plan well in advance to implement them effectively. Already UAE is creating ripples in the international market not only as an attractive investment destination but also as an aggressive investor in major projects and companies world over, and this will trend is expected to sustain for coming years as well. "I am sure this budget will further strengthen the status of the UAE as one of the most stable and resilient economies in the region with enough firepower to tide over the current global turmoil," he said.Mohammad Nafees, chairman of Pakistan Chartered Accountants Forum in Dubai, said the Government should be commended for increasing budgetary outlay despite difficult global economic conditions."It is a bold thing to increase expenditure in these times. The outlay for education and services shows that the government wants to maintain a high level of services and has the interests of the future generation in mind," he said.Dr. Khalid Maniar, managing partner of business consulting firm of Horwath Mak, observed that looking at the requirements of the growing UAE population the percentages of allocation for education and services "appear right" in the current inflationary conditions in the country.
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Mr. Min Byung-Il serves as editorial director and senior writer for The Seoul Times. He was former managing editor and executive director of the Korea Herald. Min is also serving as correspondent for Emirates News Agency (WAM) of the United Arab Emirates and web editor for ArabAfrica.Net.
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