Dubai is the 44th best financial city in the world, as surveyed by City Mayors. The organization also ranked Dubai in the 33rd position in the list of the richest cities in the world, as measured by purchasing power parity (PPP). The city is known as an international financial centre. The economy of Dubai stood at US$ 46 billion in 2006.
However, the global economic downturn impacted the construction sector of the city severely. The oil industry had been the backbone of Dubai’s economy for decades. But owing to a fall in its oil reserves, the contribution of petroleum and natural gas was less than 6% of the gross domestic product of the emirate. The Dubai Financial Market (DFM), which is a secondary market to support trade of bonds and securities at the national and international level, had a trading volume of 400 billion shares by 2006.
The tourism industry of Dubai is an important contributor to the GDP. Top class infrastructure and widespread transport links of the Emirates Airline offer a big boost to the growth of Dubai’s economy.
Dubai has left the other gulf cities behind in its expanding non-oil sectors. Nullifying the projections of the International Monetary Fund (IMF), it managed to achieve GDP upwards of 16% in 2007. The economy was driven largely by mounting oil prices and expansion of the non-oil sectors.
Dubai Economic Structure: Growth Prospects
Dubai’s foreign debt, as of February 2009, stood at approximately US$100 billion. Dubai now needs to leverage its retail and tourism sectors to sustain success. This can be easily achieved through its population, 96% of which comprises expatriates. Moreover, it must ensure a steady inflow of tourists. The government is diversifying revenue generation channels in the form of commercial and corporate activities. A number of projects, such as Dubai Metro and Dubailand, are being worked on to boost tourism. Some other projects include constructing tourist attractions, such as resorts, theme parks, shopping malls and stadiums.
In an effort to keep attracting foreign exchange, Dubai is developing its services sector by establishing several IT and finance companies. Dubai Internet City, in combination with Dubai Media City, is a professional body whose members include renowned IT and technology companies such as Oracle Corporation, Microsoft, IBM and EMC Corporation, and Media firms including Reuters, AP CNN, BBC, MBC and Sky News.