Dubai 2010 budget attempts to balance growth with economic welfare




Posted by BusinessIntelligence Middle East
Source: BI-ME , Author: BI-ME staff
Posted: Sat January 16, 2010 2:53 pm


UAE. A Dubai Chamber of Commerce & Industry analysis of the Dubai Government's 2010 budget indicates that the budget attempts to balance growth with economic welfare and reflects the Emirate's determination to push ahead with fiscal spending amid a challenging 2009.

The Dubai government has approved the budget for 2010 in line with its commitment to pursue a progressive fiscal programme aimed at supporting all sectors of the economy facing challenges on the back of the global economic slowdown.

HE Eng Hamad Buamim, Director General, Dubai Chamber, maintained that in essence, the budget represents a balance between the necessity to support and stimulate economic activity on the one hand and commitment to sound financial rules and principles of public funds management on the other.

"This sound and prudent balance will send a strong message to the business community about the seriousness of the government to push ahead with a rational budget in 2010 and ensure that the economy is on a long-standing stable growth trajectory. The budget is more likely to boost investor confidence on the back of the Government's handling of the adverse situation and in providing a timely stimulus to the overall economy of the Emirate which is looking forward to a better trading year."


Key features of the budget for 2010 are the continuation to work in the development and completion of the emirate's infrastructure projects, fostering advancements in public and social services as well as improving overall security measures.

According to the budget, it is estimated that government revenues will reach Dhs29.4bn whilst government spending will reach Dhs35.4bn. This therefore represents a deficit of Dhs6bn (equivalent to 2% of GDP).

In terms of the operating budget, the government has suggested that it will operate a surplus on its current budget (revenue minus current expenditure) which will reach Dhs1.9bn in 2010 (though the government has not provided a breakdown of how it will accomplish this surplus). Achieving this surplus is one of the fruits of increasing efficiency of government spending without unbalancing the overall objectives of fiscal policy. It is only when investment expenditures are added onto current expenditures that the deficit is created. This can be, in fact, positive for the overall economy as these investment expenditures will in-turn stimulate key sectors going forward in the long-term.

Key Points of the 2010 Dubai Budget
• The estimated spending on the economic sector, infrastructure and transportation (which includes the RTA, Airport Foundation, Dubai Air Wing, municipality and tourism is Dhs17.45bn.
• The estimated allocation on the social sector and public services that includes health services, education, social development and Islamic affairs is Dhs8.10bn.
• The estimated expenditure to the security and justice sector that comprises police, nationality and residence, the courts and public prosecution is Dhs6.98bn.
• The estimated spending on support, transferring and government excellence sectors is Dhs2.80bn.
• The estimates allocation of government investment expenditure is Dhs10.7bn for the development of infrastructure projects in accordance with set plans.
Source: Dubai Chamber based on data from the Department of Finance

It is clear that the sectoral distribution of government spending reflects the balanced strategy of the Dubai government which focuses on achieving high rates of economic growth and upgrading the welfare of the community. It takes into account the need to continue developing the emirate's infrastructure, to support the emirate's economy as well as adhering recommendations of the Dubai Supreme Fiscal Policy Committee.


News Link: http://www.bi-me.com/main.php?id=43452&t=1&c=34&cg=4&mset=1011