Abdulrahman Al Ansari discusses the news that the United Arab Emirates (UAE) city of Dubai is planning to construct the largest wholesale hub in the world.
Dubai economic growth
The majority of emirates in the UAE depend on oil for economic growth. However, Dubai is an exception to this rule. The emirate has established itself as the Middle East’s largest non-oil trading centre. Consequently, Dubai was named one of the top five growing economies in the world by American think tank The Brookings Institute at the start of last year.
However, Dubai’s economy is not completely immune to oil market activity. Global oil values have dropped by around 70% since mid-2014. These lower oil prices have slowed economic growth in neighbouring Abu Dhabi and other Emirati oil producing regions, in turn impacting Dubai’s economic fortunes. According to the National, Dubai’s economy grew at its slowest pace for five years in December 2015.
Tapping the wholesale sector
Dubai is planning to boost its economy by entering the “wholesale” market. Figures suggest that the global wholesale trade sector will expand in value from US4.3 trillion (tr) to US$4.9tr over the next five years. The emirate will tap into this lucrative industry by constructing a wholesale “city” development.
News agency The Economic Times reports that this “city” is destined to serve as the biggest wholesale hub on earth, spanning over 550 million (m) square feet. It will cost 30 billion (bn) dirham (US$8.2bn) to construct and feature over 15,000 wholesale traders. The development will include a global trade exhibition facility, along with specialised trading parks.
Capitalising on retail
The UAE’s retail market holds incredible potential. According to Gulf news, a regional publication, it grew by 7% last year and is expected to expand by 4% in 2016. Considering the fact that Dubai was named the world’s second most important retail centre by consultancy company CBRE, it is uniquely positioned to capitalise on the growth potential of the wider Emirati retail sector.
Dubai is doing everything it can to take advantage of its reputation as a global retail centre and attract additional consumer revenue. For instance, it has built major new retail projects such as The Mall, a US$108.9m shopping mall in its Jumeriah district. By constructing what will become the largest wholesale hub on earth, Dubai is tapping into the potential of the global wholesale sector to ensure it can develop the robust retail market required to boost economic growth in the future.
About Abdulrahman Al Ansari
Abdulrahman Al Ansari has more than 18 years of experience in the global financial services industry. He serves as the chairman of a number of reputable financial firms including AMA Investment Holding and Bid Capital Management Consultancy.
Abdulrahman’s professional portfolio encompasses a diverse range of sectors from commodities and natural resources to education, healthcare, oil & gas and investment banking. He has earned a reputation as an innovator, who consistently develops new ideas and solutions to address the complex and demanding challenges which confront his clients every day. Over the years, Abdulrahman has cultivated a special interest in the continued economic and community development of the UAE.