Infrastructure takes a major cut of Dubai’s budget for 2019 in preparation for Expo 2020, the world expo that will open its doors on 20 October, 2020.
HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai, approved the 2019 public budget, with planned expenditure worth $15.5bn (AED56.8bn). The 2019 budget is based on population growth figures; a commitment to consistent infrastructure development; the objectives of Dubai Plan 2021; and the benefits of hosting Expo 2020 Dubai. Planned spending comes in line with the directives of the Ruler of Dubai to “raise the happiness and wellbeing of the citizens and residents” of the emirate.
Of the total share, infrastructure projects account for $2.5bn (AED9.2bn) of the 2019 budget, “despite the completion of some infrastructure projects related to Expo 2020 Dubai”. The planned schemes for 2019 will cater to the need to develop and upgrade Dubai’s infrastructure and continue its growth as a preferred destination for business and entrepreneurship. This $ figure will also help to prepare for future commitments; help develop project financing mechanisms through long-term financing; and support the completion of some projects, as well as the activation of the Public Private Partnership Law.
The fiscal budget for 2019 is equal to its 2018 predecessor, which was the largest budget in Dubai’s history. According to a statement by UAE state news agency, Wam, the unchanged value comes as Dubai continues to implement the economic incentive initiatives launched in 2018 that are due to continue till 2021. This includes the reduction of numerous fees to stimulate economic development across Dubai.
Up to 2,498 jobs will be created as part of the 2019 budget, in line with the government’s strategy to boost employment numbers in the emirate. Salary and wages account for 32% of Dubai’s 2019 budget, while public and administrative expenditure, as well as grants and support expenses, make up 47% of total government spending. The new year will also see Dubai continuing its social service investments in health, education, and housing, among other sectors, as well as develop the Social Benefits Fund.
Estimates for public revenues stand at $13.8bn (AED51bn) – a 1.2% year-on-year hike – and director general of Government of Dubai’s Department of Finance, Abdulrahman Saleh Al Saleh, said the emirate achieved an operating surplus of $231.4m (AED850m) through the adoption of disciplined financial policies. The revenue hike, according to Wam’s report will come despite the economic incentivization measures that have seen cuts and three-year freezes on select business fees in the city.
Evidencing the emirate's economic diversification success, revenue expectations for 2019 are based on Dubai’s ongoing operations, and “ do not rely on oil revenues, which account for only 8% of total projected revenues for the fiscal year 2019” Non-tax revenues make up for 64% of the total revenue expectations, with the remaining anticipated from tax (25%) and government investment (3%).
Al Saleh said: “Dubai is committed to the continued development of its budget performance over the next few years to ensure financial sustainability and encourage entrepreneurship in the emirate through economic incentives that will contribute to attracting more investments.
“The Government of Dubai will continue to improve its competitive edge and achieve the targets of Dubai Plan 2021, and work to amaze the world with the best expo ever in history.”