The System of National Accounts (SNA) is the internationally agreed set of standards of recommendations on how to compile measures of economic activity. The SNA describes a coherent, consistent and integrated set of macroeconomic accounts in the context of internationally agreed concepts, definitions, classifications and accounting rules.
In addition, the SNA provides an overview of economic processes, recording how production is distributed among consumers, businesses, government and foreign nations. It shows how income is originated in production, modified by taxes and transfers, flows to these groups and how they allocate these flows to consumption, saving and investment. Consequently, the national accounts are one of the building blocks of macroeconomic statistics forming a basis for economic analysis and policy formulation.
The gross domestic product (GDP) is one of the primary indicators used to measure the economic growth and to gauge the health of a country's economy. It represents the total monetary value of all goods and services produced over a specific time period.
So the center estimates the GDP at current and constant prices for the Emirate of Dubai by using the results of the economic and financial field surveys, which includes all the financial and economic activity in addition to data base from federal ministries and local departments in the emirate, in addition the GDP have been calculated through production approach.
In addition to that, DSC is conducting the foreign Investment Survey. In accordance with international standards adopted in this regard, the implementation comes with the framework of building a modern, accurate and comprehensive database, the result of which will be reflected on policies and plans that support development of the economic sectors and investments.
AED 403 billion of foreign investment in Dubai
Wholesale and retail topped the list of activities
In Dubai, foreign investment amount stood at AED 403 billion including 3 types of foreign investment in accordance with international standards adopted in this respect: FDI, portfolio investments and other investments.
Arif Al Muhairi, Executive Director of Dubai statistics Center stated to Al Bayan that the results of Dubai Foreign Investment Survey for 2016 revealed the figures for 2015, where foreign direct investment accounted for 67.2% of the total foreign investments, with the amount of AED 270.8 billion, with a growth rate of 9.5% compared to the previous year.
He explained that foreign direct investment is the most important among the types of investments, which originates mostly from the flow of resident capital in other economies to the local economy for long periods.
It is usually accompanied by the transfer of knowledge and technology, which gives it that importance and significant impact on productivity support. In second place in terms of relative importance comes other foreign investments, which totaled nearly AED 124 billion in 2015, contributing 30.8% of the total foreign investment in Dubai.
The data indicate a decline in the balance of other investments compared to 2014 by 16.5%. This fluctuation in the balance of this kind of investment is due to its constantly changing nature, which mostly consists of long term loans and deposits, commercial credit and similar non-resident foreign investment enterprises.
While portfolio investments accounted for 2% of the total foreign investments, which grew by 3.6%, with a total balance of AED 8.2 billion at the end of the year 2015 compared to AED 7.9 billions at the end of 2014, which is in the form of investments in bonds or negotiable property among enterprises in the national economy, institutions or individuals in the rest of the world.
United Kingdom and India
He noted that residents in the United Kingdom and India were the foreigners who contributed most to foreign direct investment, as the United Kingdom and India have maintained their rank at the top of the list of the highest countries in the volume of FDI. The total FDI has an approximate total of AED 65 billion and contributed by 23.9% of the total FDI in the same period.
Al Muhairi asserted that Dubai has managed to maintain its position as one of the best options that appeal to foreign investments, through its constantly evolving infrastructure that supports its global prestige and utilizes all policies and legislation to motivate investors. He explained that the prestige and global reputation, competitive and legislative environment enjoyed by the Emirate of Dubai are a key element in attracting investments from various countries around the world.
Commerce acquires 38.2%
The report showed that FDI stood at AED 270.8 billion through 2015, achieving a growth rate of 9.5% compared to the year 2014. The wholesale and retail activities stood at top of the activities list in terms of FDI balance, as it represents 38.2% with the balance of AED 103.5 billion in 2015 compared to AED 88.6 billion in 2014, at a growth rate of 16.9% worth AED 14.9 billion.
The financial sector came in second in terms of relative importance in FDI, accounting for 22.1% of the total FDI balance worth AED 59.8 billion in 2015 compared to AED 58.4 billion in 2014, at a growth rate of 2.4%.
FDI real estate balance came in third place in terms of relative importance, as this activity contributed in 2015 about 21.7%, with the balance of AED 58.8 billion versus AED 53.3 billion in 2014, with a growth rate of 10.3%.
The balance of FDI in other economic activities amounted to AED 48.6 billion versus AED 46.9 billion in 2014 at a growth rate of 3.6%, contributing by 18% of the total FDI balance in Dubai.
2015 budget evidence of the strength of the economy
Dubai 2015 budget has been recently praised during government and economic events during which it was confirmed to be a clear sign of the emirate’s economy under proper planning that’s focused on economic growth and infrastructure.
Hamid Sultan Al Mutaiwee, Executive Director of Dubai Government Workshop, has stated that the amount approved by H.H Shiekh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and ruler of Dubai, as the 2015 budget for the emirate of Dubai, which is AED 41 billion with a 9% increase compared to last year and without a deficit, is evident of the wise vision of Dubai government in budget accounts data under the programs and performance budget which concentrates on real assessment of budget performance and identifying achieved goals of every program or activity under the adopted indicators of last year where expenditures revenues broke even.
H.E has also added that this year’s budget is a real testament to the emirate’s strong economy under proper planning that’s focused on economic growth and infrastructure as a 36% of Dubai 2015 budget has been allocated to support economy, infrastructure and transportation, in addition to bringing happiness to Emirati citizens, which is a top priority to according to the vision of his H.H Shiekh Mohammed Bin Rashid Al Maktoum. Mr. Hamid Sultan has also indicated that this year’s budget provides 2.500 job opportunities for citizens with an increase amounting to 1000 opportunities compared to last year and with a higher rate of expenditures. The expenditures on health development came second in the list of government expenditures with a percentage of 35% of the budget terms; the 22% remaining part of the budget has been allocated for the purpose of improving security, justice and safety, for security is of highly important according to H.H’s vision.
An Economic Model
Tariq Al Janahi, Deputy Executive at Dubai Statistics Center, has said that the approval of Dubai 2015 budget with no budget deficit and an increasing expenditure by 9% without relying on oil revenues, especially at this time, can teach several many lessons. It is paradoxical that the famous financial global crises which happened five years ago, and affected our economy, now represents a positive point in the Dubai’s economic history as the success achieved by the emirate in such a small period of time, contrary to the plethora of negative predictions by everyone around the world, has reaffirmed that the economic model adopted by Dubai is a reliable one capable of dealing with different situations and overcoming economic problems and turning them into a story of success and achievements.
Dubai has reaffirmed its rational policies in both economy and finance. It has also reaffirmed the high government fiscal performance, the growing influence of its investment attraction and economic confidence. This confidence is clearly reflected by the growing number of foreign direct investments in Dubai that has achieved an 11.4% growth amounting to AED 172 billion in 2012, not to mention the ever-growing distinguished economic performance which has helped achieve a 3.1% growth during the first half of 2014.
Continuing Economic Development
Ahmed M. Bin Shafar , CEO of Emirates Central Cooling System Corporation “Empower”, has been quoted as said: “ The new budget approved by H.H Shiekh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and ruler of Dubai, may Allah protect him, is a driving force for the business sector in the emirate, it also demonstrates the farsightedness of our leader and the appropriate government procedures that played a role in Dubai’s economic growth.