Focus must be on core sectors

02 May 2013

Trade, transport, tourism, logistics and finance sectors crucial for Dubai to return to growth of pre-crash years

After the boom and bust of the first decade of the 21st century, investors in Dubai have rightly remained cautious when evaluating on the future prospects of the GCC’s commercial hub.

The bubble that spectacularly burst in 2009 was largely blown up by surging real estate prices driven by speculative investment, and long-term investors will be wary of history repeating itself.

If Dubai is to return to growth rates anywhere near the pre-crash years, it must focus on the core sectors that make it such an important regional centre: trade; transport; tourism; logistics; and finance.

Without the oil and gas reserves of Abu Dhabi and surrounding states such as Saudi Arabia, Qatar and Kuwait, Dubai’s potential for expansion lies in providing the wider region with goods and services. The real estate market has noticeably started to pick up, with rents in some of the Dubai’s upmarket areas reported to have grown by up to 20 per cent year-on-year in the first quarter of 2013.

The stock market has also recovered to a certain extent, with the index rising to a three-year high in late April, although remaining far below the levels of early 2009.

The aftermath of the global financial crisis hit Dubai harder than any of the Gulf’s other major cities, but it is in no danger of being overtaken as the main hub for overseas companies looking to set up offices in the Middle East.

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