After a brief period, the Dubai economy is projected to have a 3.5 percent growth this year. Business registrations have increased in the state, though it isn?t clear if the capital inflow is due to the political unrest and uncertainties in the other Arab countries.
?We don?t have clear indicators with regards to this specific issue, but we can say that our membership has increased since the start of the year. Whether this is a direct influence of the political upheavals in other Middle Eastern countries is unknown?, said Abdul Rahman Al Ghurair, Chairman of the Dubai Chamber of Commerce and Industry.
A Washington-based Institute of International Finance (IIF) made its forecasts on the Arab World Transition, in Dubai this week. Garbis Iradian, IIF Deputy Director Middle East and Africa Department says, ?Unprecedented divergence unfolds in 2011 in Arab economies, posing exceptional challenges but also opportunities. For the oil importers, the economic toll from the political upheavals will translate into a collapse in growth in 2011.?
But this turmoil in the Arab world could indirectly boost the UAE?s economy because of the higher production of crude oil in Abu Dhabi; increased revenues due to a spike in oil prices; and a diversion to the UAE of some of the regional trade, transportation, tourism, and finance.
Iradian added, ?Dubai has regained market access, but the cost of borrowing remains high, reflecting the rollover needs of the total of $ 31 billion falling due in 2011-2012, and concerns about the solvency of restructured GREs.?
With a stable growth recorded during 2010 and positive figures for the first quarter of 2011, the Dubai economy is positive, with increased investor confidence.