Dubai Expo 2020 And Its Effect In UAE Economy
HOW ACCOUNTING ANALYTICAL REPORT BENEFIT FOR UAE REGISTERED COMPANIES.
The Great Recession that hit the world in Q3 of 2008 had drastically slowed down the economic growth of Dubai that primarily depends upon real estate, tourism, retail and finance.
The real estate prices started going down, the finance sector became debt ridden, the city’s construction work came to a halt and job opportunities were shut down for the expats that forced several foreigners to quit Dubai.
Dubai is getting ready to open its doors to Expo visitors on October 20, 2020. As of now, a total of 190 countries have confirmed their participation in the mega event.
From 2013 onwards, Dubai’s economy started to regain its progress. In November 2013, Dubai was chosen as the champion to host The World Expo 2020 with the theme 'Connecting Minds, Creating the Future'
Now a change is about to come for Dubai. The prediction says that The World Expo 2020 will provide a significant boost to Dubai's economy and certain sectors, such as hospitality and tourism.
As per the evaluation of the committee that will organise the Expo 2020, the theme 'Connecting Minds, Creating the Future' reverberates the powerful spirit of partnership and co-operation that has been the driving force behind the UAE's success in the creation of new paths of growth and revolution.
The committee believes that by winning this concept, the event will serve as an impetus, connecting minds from all around the world and inspirational to both Expo attendees and exhibitionists to work together to solve shared challenges.
Moreover, it is expected to attract considerable foreign investment to Dubai, and the wider UAE, and will build upon the emirate's central economic sectors, including financial services, construction, tourism and hospitality.
It’s a matter of great elation as the Expo 2020 will open golden gates to many businesses. At the same time, it is alarming that any mismanagement even at the smallest level could produce cumbersome consequences.
Importance of Belt & Road project for UAE growth
The UAE is ready to play a big role in China’s Silk Road initiate — also known as One Belt and One Road project (OBOR) because of the good infrastructure, strong financial background and business friendly atmosphere available in the country.
The Belt and Road Initiative which is an ambitious stratagem designed to drive trade and capital flows between the east and west was announced by the Chinese President Jinping in 2013.
China and the UAE signed a memorandum of understanding (MoU) for joint cooperation on the Silk Road Initiative and the 21st Century Maritime Silk Road Initiative to boost investment and trade between the two countries. It is evident that more than 22 percent of Arab-Chinese trade is coming to the UAE and 30 percent of China’s exports to the Arab world goes through the UAE.
The grand project is a $900 billion policy aims to connect cities in more than 69 countries across Europe, Asia and Africa via two trade routes — one is an overland route connecting Europe and the Middle East to China by way of Central Asia and the other is a maritime route that connects China, South East Asia, India and Africa.
The routes alone epitomise approximately 4.4 billion people, i.e. about 63 per cent of the world’s population and 40 per cent of global gross domestic product (GDP)
The UAE and China are already significant trading partners, with around $53 billion (Dh194.51 billion) of trade between the two countries.
It also signed an agreement with Zhejiang China Commodities City Group to jointly construct a new ‘Traders Market’, an international station for the BRI (Belt and Road Initiative), opposite the Expo 2020 site, at Jebel Ali Port and Free Zone in Dubai to provide further impetus to China’s Belt and Road Initiative. The market will see an investment of $2.4 billion to store and ship Chinese products to the world. There is no doubt that the grand project will steer to gallop the economic growth of the Emirates.
Latent Impact of the World Expo 2020
Though it is difficult to predict an exact figure, it is expected that the Expo will boost the economy of Dubai and the UAE.
As per the expert analysis, the event is likely to produce around $23 billion (£14.8 billion) for the emirate, equating to around 24.4 percent of Dubai's current gross domestic product between 2015 and 2021.
Moreover, it is expected to boost the economic growth of the emirate by an average of 6.4 per cent every year potentially rising to an enormous 10.5 per cent by 2020.
Impact on Investment
The government has set aside a total amount of around $8.7 billion to strengthen the emirate's infrastructure in a host of development projects related to the event that will benefit Dubai even after the Expo closes its doors in 2021.
The UAE government has forecasted that revenues of up to $17.7 billion will be produced if the Expo is a success. In addition, the UAE may attract as much as $150 billion in foreign direct investment on real estate, hospitality and tourism between 2014 and 2020.
Impact on Hospitality and tourism
The Expo 2020 is expected to attract 25 million visitors, out of which 17 million will be international, during its six-month run, and will perceptibly provide a gigantic boost to the tourism and hospitality industries.
Impact on Infrastructure
World Expo has accelerated the development of the infrastructure of the host city.
The city needs at least $8 billion worth infrastructure for the successful establishment of Expo 2020.
The host site of Expo 2020, Jebel Ali is a 480-hectare space which requires new roads, metro extension, buildings, hotels and facilities to accommodate tourists.
Impact on Economy
Dubai is expecting 25 million visitors during the Expo 2020 which has already witnessed an increase in the economy charts of the Emirate. An astonishing 4% increase was there in the stock market index of Emirates as soon as it won the bid on Expo 2020. For the first time since 2008, its index went beyond 3000-point level.
Dubai’s economy will experience a sharp increase in hotel business, transportation, communication, catering, construction works and other facilities required in the making of Expo 2020
It will add a boost to the economic stability of Dubai with more flights, more tourism, more retail and more transportation that will bring an increase in GDP.
As per the expert report, by 2021, Dubai will experience a 1.5% growth in the GDP.
Impact on Job Market
The job market of Dubai will experience a boost ahead of Expo 2020 as it will need more hands for all the new construction projects, increased tourisms and more transportation facilities.
Around 277,000 job openings are reported in the making of Expo 2020, of which, 40% will belong in the tourism, travel and leisure sector. The construction sector will take up rest of the job percentage.
It’s a cheer to the employee sector as they hope for better payment or a bonus on their way ahead.
Even though there may be a salary hike for employees, it will come as a trickle-down effect and hence becomes a wait and watch situation.
Impact on Real Estate
Dubai is already considered as a safe-harbour for the tourists because of its splendid location and tourist attraction. In advance to Expo 2020, Dubai will be binged with tourists who need accommodation. It is estimated that 71% of the 25 million visitors who are expected to visit Expo 2020 will be non-domestic visitors. These numbers show that there will be a huge demand for accommodation that steers the Real Estate business which is a positive sign.
The impact of Expo 2020 on Real Estate is visible at present as serious tourists, celebrities and event organizers have started booking apartments, buildings, office halls and event areas for Expo 2020.
Impact on Media
The impacts on Media are equally prodigious as almost all websites have started pounding with articles, news, reports and quotes relating to Expo 2020.
It is certain that Dubai will now boom with more celebrities as they will be interested in either visiting it with their family or for their showbiz business.
The active involvement of media in Expo 2020 will bring a new topic of discussion and a new spark of enthusiasm as Dubai has already started with Concert practices, dance performances and new endorsements.
Benefit for UAE Registered Companies in light of EXPO 2020 Dubai
- Domestic industry is expected to have dominant changes and fast growth
- Rise in the investment capital due to the increase in Foreign entrepreneurship
- Upsurge in Foreign Direct Investment
- Modern and high-tech infrastructure
- Colossal enlargement of investment prospects
- A stage to build international business relations
- Global reach of your products and services
- Great opportunity to get effective trading channels to the marketplaces of Asia and Africa to increase volume of import and exports
- Implementation the modern technologies
- Get advantage of all-pervading emerging new markets
- Concessions to businesses that choose to build three or four-star hotels in Dubai
- The new rooms will be exempted from the municipality fee of ten per cent of the total rate.
The 6-month expo is expected to host 25 million people, a blend of participants, investors, and visitors creating massive opportunities for business people around the world to connect, build partnerships, expand their reach, and grow their companies.
The country foresees a long-term impact of investments, increase in expat residence, and a boost in the lifestyle and quality of the country, which in turn, will boost the quality of living and consumerism.
The whole world, especially the business class is eagerly waiting for the big show, Expo 2020 Dubai.
It is a festival of human inventiveness. Expo 2020 will be a global destination for millions of people who would like to have an experience on the development of human ingenuity over the years.
CDA’s importance in the light of Dubai Expo 2020
With millions of visitors and 192 participating countries, the World Expo 2020 Dubai is overflowing with business possibilities as all businesses can benefit from being a part of this majestic event.
Expo 2020 Dubai will definitely be an entryway into new markets for all businesses, offering them the chance to develop relationships with nations, multilateral organisations, corporations and educational institutions, as well as millions of visitors, reverberating Expo’s theme of ‘Connecting Minds, Creating the Future’.
In the light of this, proper Accounting and Restructuring the existing corporates will help the business to grow up. The shrinking profit margins, inefficiencies halting growth, employees or clients moving out, obsolete technology resulting in lower productivity and profit are some of the factors to be analysed as the reason for the restructuring of a business.
CDA can play a vital role with related to the restructuring of a company and the emerging companies’ accounting and auditing requirements. CDA is a team of professionals with efficient Market & Business analysts who can help your business to be a part of the growth wheel of the UAE economy in the light of the Expo 2020.
CDA can generate an accurate Accounting Analytical Report which shows the current status of the company and can provide better strategies based on the report to be implemented for the growth.
CDA prepares the Accounting Analytical Report for your business, that includes: -
- Profitability Report
- Cashflow Analysis Report
- Budget & its Variance Report
- Business Strategic Analyze Report
- Receivables and Payables Aging Report
CDA Accounting & Bookkeeping Services LLC also dexterously handle CFO Services, Auditing Services, Accounting & Bookkeeping Services, Accounting Software services, Due Diligence Services, and Tax Filing & VAT Consultancy services on time according to the convenience of our good clients. We give priority to the maximum satisfaction of our clients.
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