Dubai Back To Its Dazzling Best But Cautious On Overheating Says, Ajay Sharma
Ajay Sharma says Dubai has bounced back from the crisis, although he feels that the construction industry still needs a boost to get back to the levels seen during 2000-2009. The economy is doing pretty well and can clock growth rates of 5% this year. But Sharma said the sustainability of this growth is hinged upon the growth of the real estate and construction sector.
More travellers are flying into Dubai these days. The hospitality and service sector has shrugged off the growth concerns and is on a resurgent mode. The man-made islands with the luxury villas that faced stormy winds during the global depression in 2009 look more resplendent now. The airport is again bustling with activity and an increased number of global travellers throng these wonderful creations, said Ajay Sharma, who has been in Dubai for more than two decades doing genset business.
Sharma said Dubai has bounced back from the crisis, although he feels that the construction industry still needs a boost to get back to the levels seen during 2000-2009. The economy is doing pretty well and can clock growth rates of 5% this year. But Sharma said the sustainability of this growth is hinged upon the growth of the real estate and construction sector.
As the economy has rebounded, the property prices have also started rising, which augur well for the construction sector. But the government doesn’t want a bubble and have taken some policy measures to curb speculation in the market. Prices are likely to fall in some areas.
“With the political unrest in other parts of the Middle East refusing to decrease, Dubai is becoming the safe haven for investors in the region. It is also growing as a nation hub in the region providing shelter to investors,” added Sharma.
Dubai has 22 free zones where foreign companies can put up businesses without much red tape and enjoy lower tax rates.
The government-owned companies that nearly went bust in 2009 have repaid or restructured most of their debts. Most of Dubai’s investors are from the region. Surrounded by volatility, many see it is a haven for their cash.
There is also a worry on UAE citizenship front, which is difficult for foreigners to obtain. Expats constitute around 85% of Dubai’s population of two million, and nearly all of its workers. Most residents, therefore, have little interest in laying down roots.
Sharma said Dubai will host world expo in 2020 and a lot of expectations are riding on it. Dubai is also expected to benefit from sanctions are on their way out after the truce achieved on nuclear weapon development.
While the growth has come back, the government is very cautious now to allow over heating the dangers of which had a catastrophic impact on the economy in 2009.