UAE FIRST NATIONAL RAIL NETWORK TO ‘TRANSFORM THE ECONOMY’ AND KEY ROLE IN REDUCING CARBON FOOTPRINT
Engineers in the Hajar Mountains between Dubai and Fujairah are making way for 16 Kilometers of tunnel, which will one day see trains shooting through it on a journey that stretches from coast to coast, and even possibly further afield.
The UAE is known for its love of cars as well as its strategic ports and airports, but now is betting big on its first national rail network. The 1,2000-kilometre artery will connect the Gulf of Oman to the Persian Gulf, down through the emirates, into Abu Dhabi’s interior and to Ghuweifat on the border of Saudi Arabia, a key step in a long-mooted rail network crossing the Arabia peninsula.
“The top line implication … is that it has the potential to transform the UAE economy — and not just the UAE, but potentially the GCC [Gulf Cooperation Council],” says Richard Thompson, editorial director of the Middle East Economic Digest.
GOING GREEN WITH SUSTAINABLE TRANSPORT
But the move also signals the country’s green ambitions. The UAE has one of the world’s largest footprints per capita, according to the World Bank, and sustainable transport is one way the government plans to reduce it.
The diesel rail line could save 2.2 million metric tons of greenhouse gas emissions per year through its freight capacity alone, says the developer. That’s equivalent to taking 375,000 vehicles off the road and even has the potential to electrify in the future, which would massively benefit the environment by cutting emissions further by using renewable energy.
“I think rail has a huge role to play in helping the UAE reduce its carbon footprint,” says Thompson. “Rail can provide a much more efficient mode of transport for goods and people movement around cities; it can help your cities function better.”
Led by Etihad Rail and funded by the UAE Ministry of Finance and the Abu Dhabi Department of Finance, it has been designed first for freight, and passenger capacity to follow. There is no completion date announced just yet, through “the network is growing as planned” with all contracts awarded, Etihad Rail told CNN.
The network will include links to Jebel Ali Port, Khalifa Port and the Port of Fujairah and industrial hubs in Abu Dhabi, Dubai and Ras Al Khaimah. The route across the UAE, according to Thompson, when connected to an in-progress Saudi network could create a direct link from the Indian Ocean to the Red Sea across the peninsula, bypassing the Straits of Hormuz to the north and the Horn of Africa to the south, with big repercussions for the movement of international cargo.
“You have a more efficient mode of transport, linking ports with each other and removing congestion on the roads and contributing to decarbonization,” he explains.
The executive director of commercial at Etihad Rail, Ahmed Al Musawa, expects 60 million metric tons of freight will move from road and sea to the rail network annually.
Beyond consolidating the UAE’s position as an international transport hub, there will be benefits at a national level too, Al Musawa says. Stage one of the network in Abu Dhabi has transported 33 million metric tons of sulfur since 2016 and has turned the UAE into the world’s largest exporter of the element, he says. Sulfur is used in the manufacturer of everything from fertiliser to paper.
Stage two, which stretches 367 miles began constructions earlier this year, could have even wider benefits.
Kevin Smith, the editor in chief of the International Railway Journal, identifies the railway as a “key strategy … to diversify (the UAE’s) economy slightly away from oil and gas.”
“I think the steel industry, oil and gas industry, then the mining and quarrying industry, should be the main beneficiaries,” says Thompson. “(The network) has the potential to integrate the northern emirate economies much closer into the national economy and accelerate growth and investment in those places.”
OFF THE ROADS TO THE RAILS?
It’s still unknown how the rail line will change the daily lives of the population. Passenger trains running at 124 miles per hour are touted by Etihad Rail – but no date has been announced. If the network follows through, it could change commuting forever.
“When you have direct, fast access, naturally that does change the way we perceive (distance), or we select where we live or work or study,” Al Musawa says. “The access to materials, services and markets can evolve around such a network.”
But will it convince Emiratis to swap their cars for trains? Thompson says there are some obstacles, including the “last mile problem” — getting people from their homes to train stations.
Walking in the summer sun isn’t an attractive option, but Al Musawa says ride-sharing and “other micro-mobility solutions” may be the answer, adding Etihad Rail is learning from other countries’ experiences.
“I think there’ll be great demand,” Smith argues. “Their whole cities are built around the car, but I think the popularity of the metro (in Dubai) has shown that people will use it if it’s there.”
Reducing the environmental impact of the global built environment sector by Chalmers University of Technology enlighten us on we currently stand in terms of reducing or lowering all built environment related human activities from impacting the Earth’s climate and how “powerful, combined efforts are absolutely crucial for the potential to achieve the UN’s sustainability goals.” and as a consequence, ‘The global built environment sector must think in new, radical ways, and act quickly’. The above feature picture is only for illustrative purpose.
The construction sector, the real estate industry and city planners must give high priority to the same goal—to drastically reduce their climate impacts. Powerful, combined efforts are absolutely crucial for the potential to achieve the UN’s sustainability goals. And what’s more—everything has to happen very quickly. These are the cornerstones to the roadmap presented at the Beyond 2020 World Conference.
Today, 55% of the world’s population lives in cities. By 2050, that figure is estimated to have risen to 68%, according to the UN. Cities already produce 70% of the world’s greenhouse gasses. Buildings and construction account for 40% of energy-related carbon dioxide emissions. Rapid urbanization is bringing new demands that need to be met in ecologically, economically and socially sustainable ways.
“If we continue as before, we have no chance of even getting close to the climate goals. Now we need to act with new radical thinking and we need to do it fast and increase the pace at which we work to reduce cities’ climate impact. We must look for innovative ways to build our societies so that we move towards the sustainability goals, and not away from them,”
says Colin Fudge, Visiting Professor of urban futures and design at Chalmers University of Technology, Sweden.
As an outcome of the Beyond 2020 World Conference, Colin Fudge and his colleague Holger Wallbaum have established a “Framework for a Transformational Plan for the Built Environment.” The framework aims to lay the foundation for regional strategies that can guide the entire sector in working towards sustainable cities and communities, and the goals of the UN Agenda 2030.
“The conference clearly demonstrated the growing awareness of sustainability issues among more and more actors in the sector. But it’s not enough. Achieving the sustainability goals will require a common understanding among all actors of how they can be achieved—and, not least, real action. That is what we want to contribute to now,”
says Holger Wallbaum, Professor in Sustainable Building at Chalmers University of Technology, and host of Beyond 2020.
Chair of Sweden’s Council for sustainable cities, Helena Bjarnegård, is welcoming their initiative.
“We are aware that we have to deliver change to address the climate, biodiversity, lack of resources and segregation. We need to develop sustainable living environments, not least for the sake of human health. The framework of a transformational plan for the built environment provides a provocative but necessary suggestion on concrete actions to achieve the United Nations Sustainable Development Goals for one of the most important sectors,”
says Helena Bjarnegård, National architect of Sweden.
In the framework, Wallbaum and Fudge have added a detailed action plan for northwestern Europe that contains 72 concrete proposals for measures—intended as an inspiration for the rest of the world.
The proposals cover everything from energy efficiency improvements, research into new building materials, digital tools and renovation methods, to free public transport, more green spaces and cycle paths. They involve all actors from the entire sector—such as architects, builders, real estate companies, material producers and urban planners.
Several of the high-priority measures in northwestern Europe are under direct governmental responsibility:
Higher taxes on carbon dioxide emissions and utilization of land and natural resources—lower taxes on labor
State support for energy-efficient renovation works
A plan for large-scale production of sustainable, affordable housing
Increased pace in the phasing out of fossil fuels in favor of electric power from renewables
“Here, governments, in collaboration with towns, cities and other sectors, have a key role, as it is political decisions such as taxation, targeted support and national strategies that can pave the way for the radical changes we propose. But all actors with influence over the built environment must contribute to change. In other parts of the world, it may be the business community that plays the corresponding main role,”
says Holger Wallbaum.
Wallbaum and Fudge are clear that their proposed measures are specifically intended for the countries of northwestern Europe, and that their work should be seen as an invitation to discussion. Different actors around the world are best placed to propose which measures are most urgent and relevant in their respective regions, based on local conditions, they claim.
“Key people and institutions in different parts of the world have accepted the challenge of establishing nodes for the development of regional strategies. From Chalmers’ side, we have offered to support global coordination. Our proposal is that all these nodes present their progress for evaluation and further development at a world conference every three years—next in Montreal, in 2023,”
says Colin Fudge.
A thousand participants followed the Beyond 2020 conference, which was arranged by Chalmers 2-4 November in collaboration with Johanneberg Science Park, Rise (Research Institutes of Sweden), and the City of Gothenburg. As a result of the Corona pandemic, it was held online. The conference discussed methods for reducing climate footprints, lowering resource consumption, digital development and innovative transport. Among the speakers were authorities in sustainable construction, digitization and financing from around the world.
Beyond 2020 has the status of a World Sustainable Built Environment Conference (WSBE). Organizers are appointed by iiSBE, a worldwide non-profit organization whose overall goal is to actively work for initiatives that can contribute to a more sustainable built environment. The next WSBE will be held in Montreal in 2023.
More about: A roadmap for the built environment
In their newly established framework, Wallbaum and Fudge establish a general approach that each individual region in the world can use to identify the measures that are most urgent and relevant to achieving the goals of the UN Agenda 2030, based on local conditions. They identify the key questions that must be answered by all societal actors, the obstacles that need to be overcome and the opportunities that will be crucial for the sector over the next decade.
More about: Action plan for the built environment sector in northwestern Europe
Wallbaum and Fudge have specified 72 acute sustainability measures in northwestern Europe (Germany, Sweden, Denmark, Finland, the Netherlands, the United Kingdom, Ireland, Norway, Belgium, Switzerland). A selection:
Establish renovation plans which focus on energy efficiencies for all existing property by 2023. Avoid demolition and new construction when it is possible to renovate.
Halve emissions from production of building materials by 2025. The transition to greater usage of materials with lower climate impact needs to accelerate.
Accelerate the phase out of fossil fuels in the transport sector in favor of electric power—with, for example, a ban on new petrol and diesel cars by 2030.
Double the amount of pedestrian and cycle paths in cities by 2030.
Offer free municipal public transport for all school children and for everyone over the age of 70.
Introduce the climate perspective as a mandatory element of the architectural industry’s ethical guidelines.
Increase the proportion of green spaces by 20% in all cities by 2030.
Concentrate research on the development of new building materials with lower carbon footprints, digital tools for the built environment and new energy-efficient renovation methods.
Read the entire action plan on the pages 20-23 in the Framework document on a Transformational Plan for the Built Environment
Fresh off from a Guinness World Record for thelargest water fountain, Dubai is now looking to set the benchmark in architecture after completing the ‘longest cantilevered building.’
Simply put, cantilevered buildings are structures built horizontally and are supported only from one end, with the other half left suspended. Chances are you have spotted these gravity-defying architectural marvels in science-fiction or superhero movies.
Spanning a whopping 226 metres and standing tall at 100 metes above ground level, the aptly-named ‘The Link’ is set to break the world record for the ‘longest cantilevered building.’ The structure will connect the two towers of Dubai’s hotly-anticipated mega project, ‘One Za’abeel’ and is slated to complete construction in 2022.
Once completed, ‘The Link’ will play host to observation decks, Michelin-star restaurants, an infinity pool, a luxury spa and panoramic views of Dubai. The best part, ‘The Link’ will feature a glass-floor and glass-wall section where you can feel like you’re floating mid-air.
Ithra Dubai is the developer behind ‘The Link.’ Lifting the structure took over a span of 12 days and was “one of the heaviest lifting operations in the region” weight more than 8,500 tons. 55 jacks and 1.2 km of strands were used in lifting the building.
“The completion of The Link at One Za’abeel is the sum of effort, imagination, collaboration and the desire to create a meaningful and timeless contribution to Dubai. We are thrilled to be part of the city’s narrative and to join its long list of firsts.”
Today, social responsibility goes beyond its old concepts, such as altruism and humanitarian aid, and covers the range of government activities at the local, national, and international levels. Since the social responsibility of the government exists in different areas; Therefore, economic policy-making should be done in relation to issues such as social rights, health, private sector activity and the role of companies in economic development. Each of these areas is part of the process of social responsibility and economic policy of governments. Therefore, the government can take more responsibility in the social sphere if, first, it has infrastructural capabilities; Second, to be able to use its capabilities in relation to its social responsibility to society and the power structure in the country.
Moreover, economic development, driven by the promise of eradicating poverty and increasing the well-being of societies, not only failed to overcome poverty, according to statistics; Rather, it had trapped many social classes and nations in the trap of institutionalized and structured poverty. The wealth of the world is increasing by year; But this increase in wealth is not something that is felt by all sections of society, and often, certain groups benefit from it. Another problem of economic development related to social issues has been and is the destruction of the environment. In the 1970s, various voices were heard in human societies about another scandal involving economic development. In fact, it has become widely known that this growth, dependent on increased production and consumption, requires more use of “natural resources” and produces a vicious cycle that results in the destruction of natural resources, environmental pollution, population growth, and so on. It will reduce the quality of life and endanger life on earth, which is contrary to the three principles of sustainable development. Levels related to social responsibilities in a developed society, starting from the individual, reach large government departments, and as we move from individual responsibilities to government social responsibilities, these responsibilities go from components and micro-indicators to Towards the components and macro indicators are inclined.
Levels related to social responsibilities in a developed society
The first level of involvement of social responsibilities in a developed society is individual levels: Individual social responsibility includes the participation of each individual in the society in which he lives and can be attributed to the interest in what happens in society and active participation. Defined to solve some local problems. Citizenship is a concept that is associated with the responsibility and accountability of individuals in society. In civil society, every citizen realizes that the irresponsibility of the people around him puts him on a path of fluctuation, and if he is irresponsible about the phenomena of the environment, he damages his own environment and the lives of others. The most beautiful pleasant feeling in the category of citizenship is the effort to cooperate and bear the responsibility of oneself and others.
Being socially responsible; That is, individuals and organizations must be ethical and sensitive to social, cultural, and environmental issues. Striving for social responsibility helps individuals, organizations, and governments make a positive impact on achieving sustainable development. The life-giving school of Islam, as a complete religion, has moral laws and advice for various aspects of human life, including social life, which every Muslim is required to follow in social relations and behaviors. “Purposefulness”, “being responsible”, “authority”, “having eternal life” and “being two-dimensional” are among the most important anthropological foundations in the school of Islam that make a Muslim a responsible and committed citizen to society can be one of the most important elements in improving the quality of life in the urban structure or sustainable urban development. Of course, every society is changing and has its own life, and every human being can determine his / her responsibility in the society according to the beliefs and culture of his / her society, available hardware and software facilities, governing laws and other variables.
The second level of involvement of social responsibilities in a developed society is the corporate and organizational levels: In many developed countries of the world, companies are more successful that value their corporate social responsibility. These companies are always striving to create shared value by implementing creative and practical ideas. These ideas are implemented with the support of long-term and very accurate plans that these companies have in the past set goals related to their corporate social responsibility. Sometimes these programs are made available to citizens so that they know what happen, for example, a company will create a common value for society in the next five years and what interests will protect society. The role of companies in sustainable development is divided into three categories: social, environmental and economic. In fact, it is a “sustainable” development in which, in addition to the economic dimension, its environmental and social consequences are also positively managed. With such a view, the exploitation of natural resources and human capital today should not jeopardize the earth, life, benefit and happiness of present and future generations. In fact, demanding organizations to “act responsibly” towards society is an issue that, as their influence grows on the pillars of sustainable development; That is, “economy”, “society” and “environment” intensified in the last decades of the twentieth century and led to the emergence of a concept called corporate social responsibility (CSR) in the world of management to understand the impact of organizations and businesses on sustainable development, it is enough to note that among the top 100 economies in the world, there are more than ten companies. Therefore, the issue of “corporate social responsibility” or CSR has become particularly important in guiding the development process towards sustainability. CSR in a nutshell; That is, organizations are accountable to the community in which they operate; Because they use its human, natural and economic resources. Contrary to the traditional view of management and business, organizations are no longer responsible only to shareholders and should not look only at the profitability of shareholders and based on short-term benefits. Thus, organizations that are in contact with other stakeholders are expected to consider their legitimate demands as well. Beneficiaries; Entities are groups and individuals that affect or are influenced by the organization and cover a wide range; From employees, customers, business partners and local communities to the environment, the media, public institutions, citizens and the government. From this perspective, CSR can be called the integration of social and environmental goals with the organization’s operations and the inclusion of those issues in interactions between the organization and related groups. In general, corporate social responsibility, in a simple definition, includes the responsibilities that firms have towards the community in which they operate. Thus, social responsibility is a voluntary activity based on the ethics of an organization or institution that goes beyond the legal requirements and aims to meet the expectations of stakeholders. In addition, one of the most important features considered for this concept is the emphasis that organizations place on the social system of communities. On the other hand, activities should be such that they have the least adverse effect on society.
The third level of involvement of social responsibilities in a developed society is government levels and the involvement of politics in social responsibilities to create a developed society: The attractiveness of government social policy has no boundaries and relates to all aspects of life at the local level. National, regional and global are considered. All issues related to social security, housing, education, health and social care fall into this area. Planning to achieve such goals will not be achieved through social processes alone. The economic components must also be formed in parallel with the social goals of the government. Topics such as health, education, livelihoods, jobs and money are vital issues that, with the help of government, officials, companies, social groups, economic groups, charities, local associations and other non-governmental are research groups.
In general, the government is not only concerned with social welfare; Rather, it is accountable to economic classes, the mechanism of action of multinational corporations, trade unions, financial institutions, importers, exporters, shareholders, owners of economic enterprises, and other social forces. Theorists believe that economic policy-making in the present age is formed by various government authorities and groups. In other words, various sectors are involved in the economic policy-making process. Each of these sections is a symbol of social activities in communities. Therefore, economic policy-making must be done in a way that meets social needs. Any possible scenario in social policies that lead to the welfare, comfort and cooperation of different social strata; It is part of the governance necessity. In other words, for the welfare of the society, the economic growth of the country, the promotion of the income of various industrial and economic complexes, as well as the reconstruction of the national and global economy, there is no choice but to play the role of government in economic policy; Therefore, it is not possible to consider conditions in which social welfare, economic development and technological advancement can be done without considering the role of government in social accountability and economic policy-making.
If the government fails to pay effective attention to goals such as social welfare and the promotion of national incomes in the economic policy-making process, then there will be manifestations of a welfare state as well as a non-developmental government. In such a process, some theorists emphasize that the main function of the state can not be overshadowed by any other issue. If economic development takes shape; In those conditions, a platform will be provided to increase the level of welfare of the society. That is why in the period of economic growth, the income of the government, society and economic groups increases in parallel. Also, the reduced government budget deficit provides a platform for economic prosperity, investment and the of development infrastructure.
Project Insight: The Museum of the Future is a seven-storey, 177m tall pillar-less Building with a facade comprising 1,024 robot-made pieces. It is yet another miracle in the UAE as most will be inclined to say.
The Museum of the Future is considered an engineering miracle at 30,000 square meters and 77 meters in height. The building consists of seven floors and characterized by the absence of columns inside, making its engineering design a milestone in urban engineering. The Museum is also linked by two bridges, the first extending to Jumeirah Emirates Towers, with a length of 69 meters, and the second linking it to the Emirates Towers metro station, with a length of 212 meters. The building is powered by 4,000 Mega Watts of electricity produced through solar energy by a new station connected to the Museum. The station was built in collaboration with Dubai Electricity & Water Authority (DEWA), making the Museum upon completion, the first Museum in the Middle East to obtain a Platinum certification from LEED, the highest rating for green buildings in the world. The park surrounding the Museum of the Future contains 80 species of plants, equipped with a state-of-the-art intelligent and automatic irrigation system.
The facade of the Museum consists of 1,024 pieces entirely manufactured by robots. The facade panels are produced using automated robotic arms. Each plate consists of four layers, and each layer has been created after following 16 process steps. The installation period of the external facade lasted for more than 18 months, and each of the panels installed separately. The facade area is 17,600 square meters. The facade, which extends over more than 17 thousand square meters, is illuminated by 14 thousand meters of lighting calligraphy. The writings are inspiring quotes of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, the Vice-President and Prime Minister of the UAE and Ruler of Dubai “May God protect him” in Arabic calligraphy.
The Arabic calligraphy was designed by the Emirati artist Mattar Bin Lahej. Among the quotes of His Highness, Sheikh Mohammed Bin Rashid engraved on the external walls of the Museum are: “We may not live for hundreds of years, but the products of our creativity can leave a legacy long after we are gone. “The future belongs to those who can imagine it, design it, and execute it… The future does not wait… The future can be designed and built today.”
International Awards The Museum of the Future is considered an unparalleled urban icon around the world. It won the Tikla International Building Award as a unique architectural model. There is no other building in the world constructed on superior technologies, thereby distinguishing it from other landmarks. Autodesk Design Software stated that the Museum of the Future is one of the most innovative buildings in the world. The building was designed by Engineer Sean Keila to offer visitors an interactive experience that is the first of its kind. The Museum of the Future is a real engineering miracle, as is evident after the completion of its external façade. It floats without foundations, pillars, or columns, thanks to the use of the latest technologies. In the design of its iconic exterior, meticulous engineering calculations were used through advanced software on giant computers with ultra-fast processors to calculate the best, most durable, and responsive curve formulas to design its foundations, solid metal structure, and its unique external interface.
Contrary to the usual concept of traditional museums based behind closed windows displaying eras of the past, masterpieces, and encounters, the Museum of the Future is distinguished by being an incubator for innovative ideas, technology, and future projects. It is a global destination for inventors and entrepreneurs. The Museum also provides its patrons with a set of immersive experiences. It enables them to learn about future technology that will change people’s lives.
Unique design style The Museum of the Future, with its unique design in the flow of Arabic artistic calligraphy and the luster of liquid metal, is one of the most famous, modern, and urban designs in the world. It is most distinctive in terms of architecture and in the unique elements designed using exceptional engineering employing the latest advanced technologies in the design and construction processes. The Museum’s engineering infrastructure was developed in cooperation between “BAM International,” the main contractor, and “Borough Happold Engineering Consultants,” which designed the engineering structure. An immersive experience, the Museum has seven floors that employ the latest technologies of virtual and augmented reality, big data analysis, artificial intelligence, and human-machine interaction to provide immersive experiences for visitors answering several pressing questions related to the future of humanity, cities, human societies, and life on planet Earth.
Sustainability The Museum’s design is a model of sustainability in future creative design. Its exterior façade was designed from advanced glass manufactured with new technologies to improve the quality of interior lighting and external thermal insulation. The use of energy-saving LED light bulbs extending into the exterior panels of 14 km long gives the facade of the Museum of the Future an attractive appearance, even more so at night. The Museum also provides an integrated infrastructure to supply electric vehicles with clean energy. The building generates its renewable energy from sunlight through an independent station for the Museum to collect solar energy. The lighting systems can be fully controlled, adding an aesthetic touch to the Arabic calligraphy design and enhancing the splendor of the exterior design from various sides. With complete fluidity and unprecedented advanced technology, the structure of the Museum of the Future is unique in a whole flow in which the glass facades, thermal, air, and water insulation systems and the metal structure merge as a single homogeneous mass like a giant shiny drop of the metal mercury.
Future technologies During the construction of the Museum of the Future, futuristic technologies were used in various stages of design, foundation, construction, and cladding. The requirements for completing the internal structure were calculated using advanced mathematical algorithms to include 2,400 crossed steel pieces and thousands of triangular pieces that enhance the durability of the external structure.
Eye on the future The Museum of the Future is situated in a strategic location in the very heart of Dubai.
With an eye on the future, the Museum is situated at the “Dubai Future District” that includes the Emirates Towers, the 2071 area of the Dubai Future Foundation, the Dubai World Trade Center, and the Dubai International Financial Center.
It is an area that is the largest in the region committed to exploring the future.
Dubai economy to contract by 11% this year: S&P as the international lockdown impacted international travel to and stay in the previously popular spots of the world. Dubai, for its particular regional specifics and as the most popular venue in the Gulf region, seems to endure the most critically the pandemic or all the safeguards against it.
As per S&P estimate, Dubai’s gross general government debt will reach about 77% of GDP in 2020.
Low oil prices have had broad effects on GCC economies, of which Dubai is one, but hydrocarbons directly contribute only about 1% to Dubai’s total GDP.
The indirect effect of weaker demand from Dubai’s neighbours will dampen Dubai’s trade, tourism, and real estate markets, it stated.
Although Dubai’s economy is somewhat more diversified than that of most its regional peers, the report anticipates an economic contraction of around 11% of GDP in 2020, recovering to 2019 levels by 2023.
STR Global, a data intelligence and benchmarking firm, reported Dubai’s hotel occupancy rate at 26% in June as inbound tourism sharply declined following global lockdowns and much-reduced air travel designed to curb the spread of Covid-19.
The fact that fewer residents left Dubai during the hot summer months and instead spent more domestically to some extent has supported the economy. Local support for the economy cannot, however, offset the almost complete shutdown of inbound international tourism for most of 2020, and the likely slow recovery of the long-haul aviation that Dubai specializes in.
The Dubai government now expects to post a deficit of AED12 billion (3.2% of GDP) this year, largely owing to the reduction in economic activity and the consequent expected 28% decline in revenue, stated S&P Global Ratings.
It also expects significant off-balance-sheet expenditure, resulting in the government’s net debt position worsening by more than what the headline deficit would imply, as has occurred in previous years.
S&P Global Ratings pointed out that the below-the-line expenditure which causes the variance between headline deficits and the change in net debt mostly involves support for Dubai’s government-related entities (GREs), an example of which is the recently disclosed AED7.3 billion (1.9% of GDP) already provided to national carrier Emirates in 2020.
Support for GREs will likely be appreciably larger in 2020 than in the past, due to the broad cross-sector shock to Dubai’s economy, it added.
The ratings major said that in total, it expected new government bond issuance and loans to total around 7% of GDP in 2020. The government has issued AED8.4 billion (2.2% of GDP) of public debt so far in 2020, marking the biggest year for Dubai’s debt issuance since 2009.
“This, in combination with recently disclosed new bilateral and syndicated facilities through June 2020 (facilities that have increased by AED15 billion (4% of GDP) since Dubai’s previous end-2018 disclosures) supports our estimation that 2020 will be another year where debt accumulation far exceeds the headline deficit,” it stated in the review.
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