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Dubai's Economic Growth Supported by Investment Incentives and Development Programme

2024-06-30 15:00:44.896000

Dubai International Financial Centre (DIFC) achieved record-breaking annual results in 2023, contributing significantly to Dubai's economy. The Centre's performance reflects its position as the leading global financial hub in the MEASA region. DIFC is ahead of target to double its GDP contribution by 2030. In 2023, DIFC had 5,523 active companies, with 1,451 new companies established, the highest number in its history. Combined revenues grew by 23% to AED 1.3 billion, and operating profit increased by 27% to AED 859 million. Total assets reached AED 18 billion, a growth of 18%. The total number of financial and innovation-related active companies is now 1,674, with 316 FinTech and Innovation firms establishing a presence in DIFC. The workforce grew by 15% to 41,597, creating 5,514 new jobs. DIFC is the largest hub for wealth and asset management in the MEASA region, with over 350 firms. The occupancy rate of DIFC-owned and managed properties is 99.5%. DIFC also supports the growth of the sustainable debt market within Nasdaq Dubai. The Centre's achievements position it well for its Strategy 2030 targets [7cc37392].

In a recent meeting, the Oversight Committee of the Dubai Future District Fund (DFDF) assessed the fund's achievements and outlined future strategies to enhance the entrepreneurial ecosystem in Dubai and the UAE. Since its inception in 2022, DFDF has completed over 25 investments and aims to drive sustainable finance and innovation on a global scale. The fund, a collaboration between the Dubai International Financial Centre (DIFC) and the Dubai Future Foundation (DFF), has committed up to 20% of its AED 1 billion fund to support climate technology and innovation [26700b0f].

DFDF has made 14 new investments in five startups, three follow-on investments, and six fund investments in the Future of Finance and Future Economies sectors in Dubai. The fund has also launched the DFDF Venture Fellows program, which provides aspiring Emirati professionals and entrepreneurs with the opportunity to participate in a Venture Capital Fund Simulation program. The Oversight Committee emphasized the importance of supporting startups and venture capital investment in creating value and strengthening corporate governance. UAE startups account for 52% of all venture deals in the MENA region. DFDF aims to foster a thriving venture ecosystem in the region and boost venture capital availability to innovative funds and startups in Dubai and the region [26700b0f]..

To further drive sustainable finance, the Dubai International Financial Centre (DIFC) has allocated up to 20% of the Dubai Future District Fund to support sustainability-driven tech and innovation start-ups. This commitment reflects DIFC's dedication to fostering sustainable entrepreneurship and promoting innovation in the field of sustainability. DIFC is actively engaged in initiatives such as the DFM Carbon Market Pilot and Prototypes for Humanity, which aim to explore and develop innovative solutions to address climate change and promote sustainable practices. DIFC has also partnered with the Chartered Banker Institute to deliver certifications in green and sustainable finance, enhancing expertise and knowledge in the field [a7d9cb11] [26700b0f].

Dubai's strategic initiatives, including the Sustainable Finance Catalyst, aim to position the city as a global hub for sustainable finance. The Catalyst, part of the legacy of the upcoming COP28 climate conference, aims to support 1 million future sustainability leaders by providing access to training programs, knowledge, networking, and events. DIFC has set an ambitious goal to scale sustainable finance flows from $10 billion to $1 trillion by 2030. The Catalyst will leverage an AI-driven sustainability knowledge hub and a network of strategic partners to unlock opportunities and create impact beyond the conference [a7d9cb11].

Through the Dubai Sustainable Finance Working Group, DIFC has published reports to help businesses build resilience to climate change and transition towards a Net Zero economy. These reports provide valuable insights and guidance for businesses looking to align their operations with sustainability goals. DIFC's efforts are aimed at positioning Dubai as a leader in sustainable finance and addressing global challenges related to climate change and environmental, social, and governance (ESG) factors [a7d9cb11].

In 2023, Dubai World Trade Centre (DWTC) hosted 301 events with 2.47 million participants, including 1.54 million international attendees. The 2023 Economic Impact Assessment (EIA) Report by DWTC showed a 40% year-on-year increase in total economic output, reaching US$4.98 billion. The events contributed US$2.87 billion to Dubai's GDP, supported 69,281 jobs, and generated US$915 million in disposable household income. The main drivers of the events were Healthcare, Medical, and Scientific; Information Technology (IT); and Food, Hotel, and Catering sectors. The events also positively impacted related sectors like hospitality, air travel, and local transportation, generating direct expenditure revenue close to US$2.94 billion [088e6331].

The Dubai Executive Council has approved the Development Programme, with the goal of Dh650 billion ($177 billion) in investments by 2033. The programme will allocate Dh25 billion ($6.8 billion) over 10 years to support the objectives of the D33 economic agenda. The FDI Development Programme aims to attract international companies and support the expansion of existing international companies with bases in Dubai. Sheikh Maktoum bin Mohammed, Deputy Prime Minister, Minister of Finance and First Deputy Ruler of Dubai, chaired the council's meeting and announced the Dubai Economic Model, which will use 3,000 performance indicators to measure Dubai's development against its economic targets. The FDI Development Programme aims to make Dubai one of the world's top three economic cities and highlight Dubai's competitive advantages. The Dubai Economic Model will monitor economic development and measure progress against D33 targets. The plan aims to double the size of Dubai's economy by 2033 and support 30 private companies to achieve unicorn status. Dubai remained the world's top destination for greenfield foreign direct investment projects in 2023 [6d3c6e2f].

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