Dubai is expected to have a balance budget in 2014 as the emirate continued to put brakes on its public spending which was cut by more than 15 per cent over the 2009 peak levels, a senior official has said.
Sami Al Qamzi, Director-General of the Department of Economic Development, said Dubai faced challenges in its development plans but added the government is confident to overcome them despite cuts in both current and capital expenditure.
“Dubai’s rapid development has seen its fair share of challenges, but the government is confident of its ability to meet them successful,” he said in an interview published in the Dubai report released this week by Oxford Business Group.
“To ensure better internal coordination and avoid incurring any systemic risk, Dubai has set up the Higher Fiscal Committee, with a mandate to monitor borrowing by all government entities and promote fiscal discipline…..by 2012, the government had reduced its own current and capital expenditures by more than 15 per cent from their peak level in 2009, and it is expected to balance its budget by 2014.”
Qamzi noted that debts of government- related entities (GREs) in Dubai are still being restructured or rescheduled through negotiations with creditors.
In addition, the government has converted some of its own loans into equity, sometimes providing new equity, he said, adding that by mid-2013, more than two-thirds of Dubai’s debt had been restructured or rescheduled.
“Furthermore, the government is enforcing stricter fiscal discipline to reduce the deficit by rationalizing the spending of GREs, without impinging on the quality of public services. The government is also focused on improving the governance of GREs, by overhauling executive boards, appointing key government officials on boards of directors and improving accountability.”
Asked about real estate, he said the property sector is directly linked to the traditional growth sectors of the economy in the emirate.
“The global financial crisis had an impact on Dubai’s core sectors because we have functioned as an open economy…… the impact of the global slowdown, in terms of business and tourism, as well as in the financial markets, was also felt in the property sector too….however, the Dubai government streamlined the property supply to protect the interests of investors and developers, and acted to enhance investor confidence.”
He said the introduction of escrow accounts and the focus on community management underlined how serious the government is about “its commitment to investors.”
He also referred to measures by the government to set up a fast-track rental dispute centre and pass a new decree for the Dubai Land Department to provide a more attractive investment environment by implementing international standards.