His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has approved Dubai's budget for the year 2014.
Based on a set of core principles of continuing to stimulate economic growth and accentuating the social services sector with an operating surplus of AED 2 billion, the budget deficit does not exceed 0.26 percent of GDP of the Emirate.
The budget directly applies directives as set by His Highness to focus on a prudent fiscal policy that provides the stimuli necessary to economic growth in the emirate, raise the efficiency of government agencies to provide the best services and health and social care for all citizens and residents.
Abdul Rahman Saleh Al Saleh, Director General of the Department of Finance (DOF) in Dubai, indicated that Dubai has succeeded in reducing the gap in the budget of 2014 between public revenues AED 37,000 million and public expenditures AED 37,882 million, by 41 percent compared to fiscal year 2013.
Al Saleh clarified the possibility of balancing the 2014 budget but explained the government's preference to expand its expenditures to support the emirate's economy and contribute to the higher rates of economic growth- through increased public spending, an increase of 11 percent from the budget of the fiscal year 2013- without sacrificing the strategic objectives of the government and work under the directions of H.H. Sheikh Hamdan Bin Mohammed Bin Rashid, Crown Prince of Dubai and Chairman of the Executive Council on the implementation of approved financial plans to support all the strategic sectors of the Government of Dubai.
Government Revenues 2014.
Revenue figures show the success of the Dubai government to increase public revenues for the fiscal year 2014 by 13 percent compared to revenue for the financial year 2013.
The expected increase of fees- representing 67 percent of the total government revenue - by 24 per cent compared with 2013, reflects the expected growth of the emirate and the development and diversity of government services and this is clearly shown through the policy of not raising any government fees in the emirate since the economic crisis. This rise however, is due to real economic growth that will persist according to the Department of Finance.
The tax revenue increased by 1 percent representing 21 percent of total government revenues and includes customs and foreign banks taxes. This increase indicates the development of the performance of customs which explains the Emirate's economic growth. Moreover, the development and increase of bank taxes are good indicators of the evolving economic situation in the emirate.
The net oil revenue accounted for only 9 percent of government revenues of the Emirate. The emirate was keen on reducing the budget allocations from government investment returns in support of the increased allocations reinvested contributing to the development of the Emirate's economic growth.
Government Expenditure 2014.
The graph shows the distribution of government expenditures where salaries and wages represent 37 percent , which confirms the government's support to the human resources and its keenness to provide 1650 job opportunities for its citizens in 2014, which is a continuation of the localization policy the government is adopting where it has adopted 1,600 jobs during the fiscal year 2013 and will continue to do so.
The Goods and Services expenses and capital expenditures, grants and support represent 32 percent of total government spending and this figure confirms the government's keenness to maintain the development of government institutions and support to provide better government services to its citizens and residents.
The Government of Dubai continues to support infrastructure projects through the provision of 17 percent of government spending for the completion of infrastructure and developmental projects in the emirate (Development Expenditures), that in accordance with the plans laid out to effectively contribute to raising economic growth rates and stimulating domestic and foreign investments. The emirate plans to launch new projects in the coming period to support Expo 2020, which will make the emirate even more attractive to investments. Therefore, it begun the preparation for the expansion of infrastructure projects through increased allocations within the budget of fiscal year 2014 to AED 6,350 million, an increase of 13 percent from 2013 and Dubai plans to maintain the size of its investments in infrastructure through the next five years.
The graph also shows the seriousness of the Government of Dubai in dealing with Payments by channelling 11 percent of the total spending for Bonds Interest Payments.
The distribution of government expenditures at the level of key sectors shows the government's interest in the individual, which according to His Highness is the real wealth of the nation. Hence, this is reflected on the percentage allocated to the social development sector including areas of health care, education, housing and community development amounting to 35 percent of government spending. Furthermore, the Dubai government supported social services through the establishment of public benefits fund to support families of breadwinners, mother and child care, those with special needs, youth care and sports clubs. Based on request of His Highness a fund was established to support small and medium-sized projects for young people to create a generation of entrepreneurs.
The security, justice and safety sector, which is a real pillar and supports the human feeling of security and safety contributing to higher rates of economic growth and a sense of citizenship. The budget allocated 21 percent to support this vital sector.
The infrastructure, transportation and economic sectors are vital sectors to the Government of Dubai and despite the completion of many of the larger projects, the budget allocated 37 percent for these sectors.
Arif Abdul Rahman Ahli, Executive Director of Budgeting and Planning, confirmed that the Government of Dubai when working on the preparation of the fiscal year 2014 budget has adhered to the fiscal policy rules by using recurring revenues to finance recurring expenses and achieving a surplus estimated at AED 2 billion contributing to the financial sustainability of the emirate. Moreover, the government is committed not to use oil revenues to fund infrastructure projects. In addition to that, the government was able to reduce the budget deficit to record levels, where the deficit ratio did not exceed 0.26 percent of GDP, which shows the government's seriousness in dealing with the deficit, though it did not exceed the universally compatible ratios.
Jamal Al Marri, Executive Director of the Central Accounts, pointed out that the Department of Finance is working closely with government entities to prepare a plan for budget implementation and to provide required funds in accordance with the priorities of the government.