Dubai’s 2020-2022 budget cycle announced

DUBAI, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has approved a three-year budget cycle for the Government of Dubai, for the 2020-2022 period.

The three-year budget cycle meets the aspirations of Dubai’s future, and confirms its determination to continue raising people’s happiness and stimulating entrepreneurship. The plan highlights the Government of Dubai’s keenness to provide the highest levels of economic stability and stimulus to the emirate’s business sectors. It also gives a clear picture of the government’s economic goals in the next three years, which supports the medium-term planning of the economic sectors and provides a clearer view of the private sector.

For the fiscal year of 2020, Sheikh Mohammed bin Rashid signed Public Budget Law No. 12 of 2019, with AED66.4 billion expenditure, making it the biggest in Dubai’s history.

The 2020 budget seeks to realise the emirate’s ambitions to stimulate the entire economy and support the organisation of the largest and most prominent ‘Expo 2020 Dubai’ in the history of the prestigious global exhibition.

In 2020, Dubai will continue supporting social services, including health, education and housing, and working on developing the Social Benefits Fund and supporting families, as part of the objective of making Dubai one of the most livable cities in the world.

“To ‘have a plan’ is one of His Highness Sheikh Mohammed bin Rashid Al Maktoum’s 10 commandments of governance,” said Abdulrahman Saleh Al Saleh, Director-General of the Government of Dubai’s Department of Finance, DOF. “The Government of Dubai, represented by DOF, was inspired by this commandment in launching the 2020-2022 budget cycle, endorsing our endeavour to continuously develop the performance of the public budget in order to confirm financial sustainability and work to stimulate entrepreneurship and business sectors in the emirate by enhancing business incentives for the next three years.”

“Enlightened by His Highness Sheikh Mohammed bin Rashid Al Maktoum’s vision, the Government of Dubai develops its financial plan annually under the directives of H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council. We are keen to provide economic incentives with an impact of attracting more investments, and work to improve the emirate’s competitive position and implement the goals of the Strategic Plan 2021 and beyond,” Al Saleh continued.

“The budget for the fiscal year 2020 has been approved with total expenditure up by 16.9 percent compared to the previous year. This comes as part of supporting the Dubai Plan 2021 and the Expo 2020 Dubai, as well as moving forward in support of the emirate’s macro economy,” the DOF Director-General explained.

Al Saleh added, “We are capable of achieving an operating surplus of AED1.96 billion due to the adoption of disciplined financial policies, which contributes to the development of infrastructure programmes for the emirate and affirms the financial sustainability policy pursued by the emirate.”

The Government of Dubai estimates public revenues to reach AED64 billion, an increase of 25 percent year-on-year. This increase comes despite the economic incentive measures adopted by the government that would reduce some fees and freeze the increase in fees for three years, and the decision to not impose any new fees without providing a new service.

The revenues are based on ongoing operations in the emirate and do not rely on oil revenues. Oil revenues account only for six per cent of total projected revenues for the fiscal year 2020.

Non-tax revenues account for 60 percent of total expected revenue. Tax revenues account for 29 percent, while revenues from government investment represent five per cent.

The 2020 budget, the largest in the Government of Dubai’s history, sends a clear message to the business community that Dubai is pursuing an expansionary fiscal policy, which gives great confidence to the emirate’s economy and contributes to attracting more investments.

This budget serves the requirements of population growth and benefits arising from the hosting of Expo 2020 Dubai and the continuous development of infrastructure, as well as other goals of the Dubai Plan 2021, all aiming to raise the level of the welfare and happiness of the emirate’s citizens and residents, in order to fulfil the directives of the leadership.

Salary and wage allowances of the 2020 budget account for 30 percent of total government spending, to fulfil the new Human Resources Law, while the grant and support expenditure account for 24 percent, to provide the best health, education and social services to citizens, and improve the level of public services and promote human development.

The Government of Dubai has dedicated AED8 billion to develop infrastructure projects and prepare for future commitments, in conjunction with the completion of some projects, the activation of the Public Private Partnership Law and the development of project financing mechanisms through long-term financing.

Spending on construction projects reached 12 percent of government expenditure, indicating the continued development of Expo 2020’s infrastructure, which will later remain in place to serve all economic and social sectors in the emirate.

For the first time ever, the government has announced a special reserve of three per cent of total expected expenditures, in accordance with the principle of hedging and preparing for the Expo 2020 period, as well as the objective of making the event the best in Expo’s history.

Dubai will maintain a debt service rate of no more than five per cent of its total expenditure in the fiscal year 2020. This comes as a result of adopting a disciplined financial policy that ensures the budget implementation faces no financial constraints.

The budget of the fiscal year 2020 also reflects the government’s commitment to human welfare, in line with Sheikh Mohammed bin Rashid Al Maktoum’s firm belief that people are the real wealth of the nation. Spending on the social development sector in the areas of health, education, housing, women and children’s care, as well as developments including reading, translation and coding initiatives, represents 30 percent of total expenditure.

The government’s concern for security, justice and safety sees 19 percent of total expenditure being allocated to support and enable this sector to perform professionally and proactively. This sector has become one that the emirate prides itself on in the global arena.

Dubai’s keenness to develop its economy, infrastructure and transportation has led to an allocation of 46 percent of total spending to the sector. This reflects its commitment to dealing with future commitments, supporting entrepreneurship and creating an incubator environment for microenterprises.

The emirate is also keen to support government excellence, creativity, innovation and scientific research. Five percent of the total government expenditure has been allocated to developing performance and instilling a culture of excellence, innovation and creativity.

Source: Emirates News Agency