Dubai and the other United Arab Emirates (UAE) states have seen unprecedented growth as a result of good administration, political understanding, and fortunate geostrategic circumstances in recent past.
Nearly 412,000 company licenses were in use in Dubai last year, up 30% from the year before and a staggering 75% from 2021, according to official statistics.
The Dubai International Financial Centre (DIFC), the leading special economic zone in the United Arab Emirates, saw the highest number of new business registrations last year—1,451 more—representing a 34% YoY rise.
The Dubai Statistics Center reports that overall, more than 100,000 new people moved to Dubai in 2023, up from an estimated 71,600 in 2022.
Real estate prices have risen to an all-time high, driven by the influx of newcomers.
The figures for Dubai are particularly impressive, but the other six UAE emirates—especially Abu Dhabi and Ras Al Khaimah—show encouraging trend lines.
The Abu Dhabi Department of Economic Development recently released a study stating that the number of active company licenses climbed by about 11% between 2022 and 2023, reaching a record high of over 143,600.
The Statistics Centre–Abu Dhabi reports that during the first nine months of the year, this contributed to the 8.6% non-oil economic growth.
A record 1.2 million overnight visitors, up 8% annually, and a 24% increase in foreign arrivals over 2022 were recorded by the Ras Al Khaimah Tourism Development Authority, which said that 2023 was the best year ever for the industry.
International direct investment (FDI) declined 12% globally in 2022, but FDI inflows into the United Arab Emirates increased 10% YoY to around $23 billion, according to the UN Conference on Trade and Development.
When the federation was formed in 1971, it was steered by visionary leadership over the course of around 50 years, becoming a regional financial hub and an oil juggernaut.
Oil-related income fueled the growth of a sophisticated financial management sector and stuffed governmental coffers.
The Abu Dhabi Investment Authority is ranked among the top 10 largest sovereign wealth funds globally by AUM as of March 2024, according to Global SWF.
Emirates Investment Authority is ranked number fifty, followed by the Investment Corporation of Dubai, Mubadala, and Abu Dhabi Developmental Holding Company.
The highly developed financial environment of the United Arab Emirates is completed by a plethora of international players.
It’s still unclear if Dubai, home to around 3.7 million people, can maintain its current level of prosperity. Its arid environment necessitates vast resources for a pleasant living.
The combination of climate change and Dubai’s ambitions to add 2.1 million more inhabitants over the next 16 years may seriously degrade the ecosystem.
The local economy is also threatened by international attempts to cut carbon emissions, which were bolstered by a deal reached by over 200 countries at the most recent UN Climate Change Conference, which was held in Dubai in December.
Abu Dhabi and the other emirates would be more adversely impacted than Dubai, which is less dependent on energy, if the price of oil collapsed during the energy transition. However, the federation as a whole would suffer from diminishing government funding, which would put pressure on the generosity it extends to its inhabitants.
Meanwhile, an increasing number of neighboring countries are attempting to imitate the UAE’s, and especially Dubai’s, economic model.
Saudi Arabia has been putting a lot of effort into being a sought-after location for international business travel, including snatching regional offices of multinational corporations.
