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Dubai
In the upscale Jumeirah Beach Residence in Dubai, rents for luxury apartments are down about 15% from last year – a sign, some fear , that the economic recipe flourishes of the emirate.
For more than two decades, Dubai has flourished as one of the most international cities in the world, attracting people and capital from around the world
Nine years ago, Abu Dhabi needed 39, a $ 20 billion bailout. caused by the collapse of real estate prices. The Dubai economy has rebounded and has increased by a third since then, supported by foreign trade, tourism and its status as the main regional hub for business services.
Now, however, Dubai is going through another difficult period. Residential property prices have fallen by more than 15% since the end of 2014 and continue to fall. The stock market is down 13 percent this year, the worst performance in the region.
Dubai issued 4,722 new commercial licenses in the second quarter of 2018, down 26 percent from the same period in 2016, the year when new licenses
falls may be temporary, the result of an economic slowdown in the Gulf caused by low oil prices. But other figures suggest that some of Dubai's traditional growth drivers are losing ground, which could mean a long-term recession.
The growth of pbadenger traffic at Dubai International Airport is almost zero this year. More and more long-haul planes can weaken Dubai's dominance as a hub connecting Asia and Europe.
Official figures show that Dubai's population continues to grow 3.5% to 3.08 million in the first half of 2018. "Perhaps the time when we could move to Dubai to make a fortune is happening, "said Hasnain Malik, global head of Dubai. He said the city was becoming more and more attractive as a base for wealthy people around the world who wanted to enjoy their wealth.
But it is not clear that Dubai's transportation industries and business zones can continue to grow fast enough to attract and retain the number of foreign white-collar workers needed to support demand on its real estate market, said Malik.
Economists see little risk of a new financial crisis; After restructuring billions of dollars in debt, Dubai-related corporations are less indebted than they were ten years ago.
Overall economic growth has not slowed down much. Officials of the International Monetary Fund have estimated that gross domestic product (GDP) will grow by more than 3% this year.
"The Emirate continues to attract business and investors as a competitive center for sustainable business development" In a statement this week, adding that licensing figures have shown "continued investment in all vital economic sectors in Dubai. "
But much of this year's growth is due to a sharp increase in public spending. World Exhibition; its 2018 budget jumped 19.5 percent from 2017 to reach a record 56.6 billion dirhams (21 billion Singapore dollars). The government can not continue to increase spending at this speed indefinitely.
Jim Krane, energy researcher at Rice University in Texas and author of City of Gold: Dubai and the dream of capitalism, said the emirate was facing geopolitical challenges
In the past, Dubai has prospered by maintaining cordial relations with all countries in the region, accepting trade and investment from all countries.
It has become impossible. Last year, the United Arab Emirates (UAE), Saudi Arabia and other countries cut off diplomatic and transport links with Qatar, ending the role of Dubai as a base for business with the country small but super-rich. Qatar via Dubai now travels via other countries, such as Oman or India; Multinational companies use their European or US offices, not their Dubai operations, to deal with Qatar.
Meanwhile, US and Gulf allies are attempting to reduce the Iranian economy by reducing their financial and commercial ties. The effort is more aggressive than Washington's previous attempt to isolate Iran several years ago, according to diplomats in the region.
UAE exports and re-exports to Iran, mostly via Dubai, totaled $ 19.9 billion in 2017
The general manager of a foreign financial firm in Dubai said that the emirate was facing unprecedented competition from neighboring countries for capital, with low oil prices forcing these countries to develop their own non-oil industries. flowing from the Dubai Stock Exchange to the Saudi Arabian Stock Exchange. In the years to come, direct investment could follow; The US oil services firm McDermott International has announced that it is planning to slowly transfer activities from Jebel Ali Port to Dubai to new Saudi facilities by the mid-2020s.
Dubai is trying to consolidate its competitive position. In recent months, the government has announced that it will reduce municipal fees, waive certain aeronautical fees, freeze tuition and take other measures to help foreign businesses and residents.
Potentially, the most ambitious reform has been announced. the UAE cabinet, chaired by the Dubai leader, Sheikh Mohammed bin Rashid al-Maktoum. He promised to allow 100% foreign ownership of some UAE-based companies, up from the current limit of 49%, and to grant long-term residence visas for the United States. a maximum of 10 years for foreign investors and certain professionals
. Foreign investments in Dubai are more attractive and, by helping foreigners plan their long-term residence in the emirate, they are encouraging them to buy houses.
But the details of the new policy have not been unveiled. The "free zones" in Dubai already allow 100 percent foreign participation; they could suffer if they no longer had this right exclusively. "To a certain extent, the economy is based on people who rent their pbadports, which could cause economic suffering to the local population," said the finance official. REUTERS
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