Dubai’s historic budget to invigorate entire economy

Inayat-ur-Rahman

His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has approved a three-year budget cycle for the Government of Dubai, for the 2020-2022 period.

For the fiscal year of 2020, Sheikh Mohammed signed Public Budget Law No. 12 of 2019, with Dhs66.4 billion expenditure, making it the biggest in Dubai’s history.

The 2020 budget seeks to realise the emirate’s ambitions to stimulate the entire economy and support the organisation of the largest and most prominent ‘Expo 2020 Dubai’ in the history of the prestigious global exhibition.

The business community in Dubai are jubilant and upbeat about this great move.

Alan James, General Manager of Samana Developers told Gulf Today that  Dubai’s biggest ever Dhs66.4 billion budget allocation for 2020 from the total Dhs196 billion budget for 2020 to 2022 is a clear indication that His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, reflects his ever determined approach to boost Emirate’s economy, business attractiveness and propelling Dubai as business and lifestyle hub not only in the Middle East but in the world as well. “With this stimulus, the Expo 2020 will be a major springboard,” he added.

“The largest ever budget has given a new stimulus to the business community of Dubai while it is a magnet for new SME, MNCs and entrepreneurs coming to Dubai. This budget will not only encourage new startups in the city of Dubai, it will promote expansion of existing businesses as well.”

“We at Samana Group are highly optimistic and believe this will further enhance the Emirate’s position as an international force ahead of Expo 2020. The new budget and positive message will continue to fuel our plans for further expansion and growth.”

Rizwan Sajan, Founder and chairman of Danube Group said: “The declaration for largest ever annual budget looks promising to me. This surge in the budget will further strengthen the financial dynamics of the emirate, thereby creating more jobs and projects that are required to benefit people living and investing in UAE. Whether it is Expo 2020 or social benefits, I see everyone reaping the fruits of success.”

He further added: “The budget reflects firm commitment to boost investment across sector. Trust me it is investment that drives demand, creates capacity, increases labor productivity, increases new technology, and generates jobs. I am sure this will take the nation to the new heights”

In 2020, Dubai will continue supporting social services, including health, education and housing, and working on developing the Social Benefits Fund and supporting families, as part of the objective of making Dubai one of the most livable cities in the world. The Government of Dubai estimates public revenues to reach Dhs64 billion, an increase of 25 percent year-on-year. This increase comes despite the economic incentive measures adopted by the government that would reduce some fees and freeze the increase in fees for three years, and the decision to not impose any new fees without providing a new service.

The revenues are based on ongoing operations in the emirate and do not rely on oil revenues. Oil revenues account only for six per cent of total projected revenues for the fiscal year 2020.

Non-tax revenues account for 60 percent of total expected revenue. Tax revenues account for 29 percent, while revenues from government investment represent five per cent.

The 2020 budget, the largest in the Government of Dubai’s history, sends a clear message to the business community that Dubai is pursuing an expansionary fiscal policy, which gives great confidence to the emirate’s economy and contributes to attracting more investments.

This budget serves the requirements of population growth and benefits arising from the hosting of Expo 2020 Dubai and the continuous development of infrastructure, as well as other goals of the Dubai Plan 2021, all aiming to raise the level of the welfare and happiness of the emirate’s citizens and residents, in order to fulfil the directives of the leadership.

Salary and wage allowances of the 2020 budget account for 30 percent of total government spending, to fulfil the new Human Resources Law, while the grant and support expenditure account for 24 percent, to provide the best health, education and social services to citizens, and improve the level of public services and promote human development.