Dubai Gary Seabrook is busy tripling capacity at the paint business he runs near the Dubai port because he doesn't want to miss out on any sales.
The general manager of Caparol Paints in the UAE and a Dubai veteran of 23 years has seen the booms and bust, and his company is now investing as much as Dh40 million so it can serve countries across the Gulf and North Africa.
Exports by companies based in Dubai increased 15 per cent last year, the Chamber of Commerce said.
"We're going to expand our facility here to make it a regional hub," said Seabrook, 52, a native of Zimbabwe. "We're coming out of the downturn and Dubai is coming back. It's going back to its roots of trade and tourism." Less than two centuries since tribesmen settled on the Dubai Creek and 40 years after the creation of the UAE, the city may be coming of age.
Now Dubai is cementing its role as a stable trading hub in a region marked by upheaval over the past year. The stock market gained more than anywhere else in the world last month, its DFM General Index surging 21 per cent as companies improved earnings and paid higher dividends.
Debt default risk perceptions for Dubai have receded this year partly on pledges the emirate's main companies will manage to refinance debt this year without government help. The yield on the government's debt is close to a seven-month low.
The economy of Dubai may expand as much as five per cent this year after growing more than three per cent in 2011, Shaikh Ahmad Bin Saeed Al Maktoum, chairman of the Supreme Fiscal Committee, said on February 15. The city has no need to raise money from international bond markets this year, the director of the Dubai ruler's court, Mohammad Ebrahim Al Shaibani, said last month.
"Dubai's economy is the best it's been since 2008," said Simon Cooper, chief executive officer of HSBC Holdings Plc's Middle East business. "Growth is not being driven just by real estate, but also by trade and finance."
Paul Foster was a property executive in Dubai during the boom years. He's now back after two years in London and is working with companies including Qatari Diar Real Estate Investment Co. and state oil company Saudi Aramco.
"The geographic location as the centre of time zones makes it an ideal place in terms of dealing with Asia and Europe," said Foster, 46, group head of asset performance and facilities management at consultants EC Harris LLP. "The first time I came here was because of the sheer excitement of the big projects."
The civil unrest in the region and rising oil prices have helped Dubai. Oil prices have almost tripled since the end of 2008 and governments across Gulf pumped money into the economy.
The members of the Organisation of Petroleum Exporting Countries (Opec) were estimated to have earned net oil export revenue of $1.01 trillion last year, according to an August forecast by the US Energy Department. The Gulf Cooperation Council states (GCC) last month accounted for 51 per cent of Opec's crude production, according to Bloomberg data.
The Saudi Arabian economy, the Arab world's largest, expanded 6.5 per cent in 2011, the fastest pace in eight years, according to estimates by the International Monetary Fund. Qatar grew 19 per cent, the fastest expansion in the world.
"Because of political turmoil you see money coming in to Dubai in search of safety," Mark Mobius, who says he oversees more than $50 billion at Templeton Emerging Markets Group, said in a March 8 interview in Bloomberg's Dubai office. "We've just expanded our office here. We moved into a larger office and I think you are going to see a lot more other people coming in particular if Saudi Arabia opens up."
A record 51 million passengers passed through Dubai's airport last year. Dubai Airports said on February 27 passenger traffic grew 14 per cent in January from a year ago.
Dubai received 9.3 million tourists last year, up ten per cent from 2010, pushing up hotel revenue by 20 per cent, the emirate's tourism department said on March 7. The city's largest malls such as Dubai Mall and Mall of the Emirates are operating at over 90 per cent occupancy rates, according to their owners. Shopping accounted for about 30 per cent of Dubai's gross domestic product last year, Standard Chartered Bank Plc economist Philippe Dauba-Pantanacce estimated.
"Dubai is growing again in transportation, logistics, oil services, tourism and retail and the economy is being better managed and consolidated than a couple of years prior to 2008," said Ashok Aram, Deutsche Bank AG's CEO for the Middle East and North Africa. "Both growth in the Gulf region as well as regional political challenges are assisting Dubai in its recovery."
Decline in costs
The decline in the cost of doing business is also making Dubai, a city of two million people, more competitive, Aram said.
Office rents dropped more than 65 per cent on average, said Craig Plumb, head of research at Jones Lang LaSalle. Those in the Dubai International Financial Centre were cut by half in 2010.
The number of companies operating in the business park rose seven per cent last year, the centre said.
Data: Choice for Investors
The Department of Economic Development issued 14,360 business licenses last year, an increase of 3.9 per cent on 2010.
"One of the department's strategic objectives is to create a suitable environment that retains Dubai as a destination of choice for investors," it said in the Februaryt22 statement.
Dubai is also continuing to invest in infrastructure to finish what it started. The government approved a $7.8 billion expansion plan for Dubai's two airports to boost annual capacity to 75 million travelers by 2012 and to 90 million by 2018, Paul Griffiths, chief executive officer of Dubai Airports, said July 2011.
"If you have a job here, Dubai is a great place to be now," Ruth Sheehy, a graphic designer who lives in Dubai with her husband.
"Dubai feels more like a real city where people can settle down. Before we all used the city for job growth and money, but most planned to move on."