It is stated in the New York Times article “Tax Breaks for Rich Cities” that “the other big trend involving how to sell off cities is the addition of tax breaks. As part of their strategy to get the most out of these sales, some cities have offered large-scale subsidies.” This article explores what some of these cities offer such as Dubai, a city in the Middle East that has had a rapid economic growth over past years.
This blog post will explore how Dubai’s economic and financial status on many levels including its GDP, GDP per capita, unemployment rates and average salary.
According to the IMF (International Monetary Fund), Dubai’s 2013 real GDP growth was 1.6% and it’s 2014 is projected to be 4.5%, which is a sharp contrast with the world average of 3.3%. This indicates that Dubai’s economic growth rate is much higher than the global average, which means that they are growing more quickly than most other countries.
Dubai has also announced plans to invest $27bn for infrastructure projects in 2017, and by 2019 this number is expected to increase to $32 billion. According to a BBC article, Dubai will be investing $18 billion in transport projects alone over the next five years, including a monorail project costing $4.
Another difference between Dubai and most other countries in the world is its GDP per capita. To give a comparison, the United States has a GDP per capita of $46,800 whereas Dubai’s is around $58,000. This means that when compared to the United States Dubai’s economy is 16 times more developed than the average for all countries. There are obviously many factors that go into this, such as its total population, but it does give an idea of how well-developed and developed it is compared to many other countries in the world.
Lastly, there are factors that have to do with employment in Dubai, such as unemployment rate (which is at 4.5% according to the IMF), average salary and the average number of hours worked per week.
According to the latest statistics from the OECD (Organisation for Economic Co-operation and Development), the average unemployment rate in Middle Eastern countries is 7.5%. In comparison, this percentage is not nearly as high as it is in some other regions around the world. The highest unemployment rate is 19.4% in Sub-Saharan Africa and lowest is 4.1% for Eastern Asia excluding Japan.
According to the data from Numbeo, which is based on a survey of prices in stores and restaurants, most consumer goods are less than 20% more expensive than in the United States. This includes items such as food, transportation and utilities.
As for salary, Numbeo reported that the average tuition for an international student studying at a university or college is around $5,265 per year (in US currency). This number is considerably higher than in other Middle Eastern countries such as Qatar ($1,800), Saudi Arabia ($3,037) and Kuwait ($4,217).
The average number of hours worked per week also averaged to 42 hours per week and seven days a week in the UAE.
This was the average of all full time employees in the UAE.
The IMF also reported that the 2013 current account balance for Dubai was a surplus of $13.69 billion and the 2014 is projected to be a surplus of $18.6 billion. This means that they are producing much more goods and services than they are importing. Therefore, their currency is strong because their economy, even with population growth, is able to produce more goods and services than it can consume.
Another noticeable difference between Dubai’s county statistics and most other countries in the world is its low public debt/GDP ratio which is only 2% according to the CIA (Central Intelligence Agency).
Based on the CIA’s data from 2014, the highest public debt/GDP ratio is 143% in Zimbabwe and the lowest is -8% in Kuwait. This means that based on these figures, Dubai’s economy is extremely well-managed because it produces enough income through exports to pay off its public debt.
This information shows that Dubai has a very strong economy compared to other countries in the world. Not only does it have a high GDP growth rate but also a high GDP per capita and a low unemployment rate. Although these numbers do not directly relate to how rich or poor this country is, they provide important indicators of a country’s financial status relative to other countries in the world.
The New York Times article “Tax Breaks for Rich Cities” talks about the competition between cities to sell their property to wealthy people. It states that “as part of their strategy to get the most out of these sales, some cities have offered large-scale subsidies.” In Dubai’s case, it is the reverse. The majority of what is written in this article deals with how Dubai is developing its infrastructure and attracting foreign investors, such as those from China, to boost its economy.
The tax incentives and subsidies that other cities offer includes tax breaks or reduced property taxes for individuals who buy property within the city.
Dubai’s government is not just looking to sell property, it is also investing in education and health care. Dubai has been investing in educational reforms for children and the elderly, health care reform and is providing free healthcare services for all residents.
Dubai has been investing in the infrastructure of its country to make it more attractive to investors and tourists from around the world. Its first airport was built in 1974, but had limited capacity until 2009. Since then, it has improved to allow a total of 35 million passengers which has changed how tourists visit Dubai. In addition to this, new industries have emerged such as ballooning and underwater tourism along with many different hotels and resorts including Four Seasons hotel with a golf course designed by Tiger Woods himself.
Dubai is attempting to attract foreign investment by improving the quality of its physical infrastructure. It is doing this by constructing many new buildings, roads, and bridges. Alongside these improvements to the physical structure of Dubai, it has also been investing in its education and healthcare systems.
There are several ways that Dubai attracts foreign investment. These include:
The New York Times article “Tax Breaks for Rich Cities” discusses the competition between cities to sell their property to wealthy people. It states that “as part of their strategy to get the most out of these sales, some cities have offered large-scale subsidies.
In Dubai’s case, it is the reverse. The majority of what is written in this article deals with how Dubai is developing its infrastructure and attracting foreign investors, such as those from China, to boost its economy.