Leaders, economists say diversification may save Dubai from oil crash
Dubai's push to diversify its economy may not only save it from a possible crash in oil prices but could also serve as a model to other Gulf Arab states for a post-oil era, its leader and economists said.
Dubai's ruler Sheik Mohammed bin Rashid Al-Maktoum vowed at a ceremony on Saturday to make his emirate "a pioneering global city" that would be "free of the direct influence of oil price fluctuations."
The occasion marked the launching of the so-called Dubai Strategic Plan — an ambitious project to increase the real per capita gross domestic product, which takes into account inflation, of this Arab city from its current value of US$31,000 (€24,000) to US$44,000 (€34,000) in 2015.
The increase would require a sky-high 11 percent annual GDP growth rate.
Al-Maktoum said that the non-oil sector now accounts for 97 percent of the emirate's total GDP — a significant shift from 1975, when oil revenues made up 64 percent of the GDP.
This is in sharp contrast to the oil-rich Abu Dhabi emirate, which produces over 85 per cent of all oil from the Emirates combined. The non-oil sector contributed only 37 percent of Abu Dhabi's GDP in 2006, according to official sources.
Unlike Abu Dhabi and the five other emirates in the oil-rich United Arab Emirates, Dubai is not home to significant oil reserves.
This has forced it to tap into other assets and has become a prime holiday location and investment banking center for the rich and famous, especially from the Arab world. Dubai has also taken advantage of its location to become the biggest re-exporting center in the Middle East, accounting for about 85 percent of the Emirates re-export trade, according to official statistics.
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Dubai's ruler Sheik Mohammed bin Rashid Al-Maktoum vowed at a ceremony on Saturday to make his emirate "a pioneering global city" that would be "free of the direct influence of oil price fluctuations."
The occasion marked the launching of the so-called Dubai Strategic Plan — an ambitious project to increase the real per capita gross domestic product, which takes into account inflation, of this Arab city from its current value of US$31,000 (€24,000) to US$44,000 (€34,000) in 2015.
The increase would require a sky-high 11 percent annual GDP growth rate.
Al-Maktoum said that the non-oil sector now accounts for 97 percent of the emirate's total GDP — a significant shift from 1975, when oil revenues made up 64 percent of the GDP.
This is in sharp contrast to the oil-rich Abu Dhabi emirate, which produces over 85 per cent of all oil from the Emirates combined. The non-oil sector contributed only 37 percent of Abu Dhabi's GDP in 2006, according to official sources.
Unlike Abu Dhabi and the five other emirates in the oil-rich United Arab Emirates, Dubai is not home to significant oil reserves.
This has forced it to tap into other assets and has become a prime holiday location and investment banking center for the rich and famous, especially from the Arab world. Dubai has also taken advantage of its location to become the biggest re-exporting center in the Middle East, accounting for about 85 percent of the Emirates re-export trade, according to official statistics.
Continue to the full story from Source.
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