In his capacity as Dubai ruler, HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, has approved the emirate's general budget for the fiscal year 2021, with total expenditures put at AED57.1 billion ($15.5 billion).
The newly-announced budget takes into account the exceptional economic conditions of the fiscal year 2020 and the repercussions of the Covid-19 pandemic on the global economy. It also confirms Dubai’s ability to deal with the crisis, restore the pace of economic growth, strengthen social benefits and essential services and adopt policies that achieve growth, economic stability and financial sustainability in the medium and long term.
The 2021 budget also demonstrates continued efforts to develop revenues, raise the spending efficiency and increase the level of private sector engagement.
Dubai's new budget will continue to support social, health, educational and cultural services as well as investments in infrastructure services in the emirate, as part of the objective of making Dubai one of the world’s best cities to live in.
Abdulrahman Saleh Al Saleh, Director General of the Department of Finance of the Government of Dubai (DOF), said Dubai’s Strategic Plan 2021 is a key pillar in Dubai’s journey towards the future.
He further pointed out that Dubai government had successfully implemented programmes that aim to achieve structural, economic and financial reforms, in addition to launching initiatives to diversify the economic base.
"These programmes and initiatives have contributed to stimulating the growth of local GDP, which played a vital role in enhancing the resilience of the local economy during the pandemic. Investment in the technical infrastructure enabled the government and the private sector's rapid response to business transformation," noted Al Saleh.
Highlighting the impact of the pandemic on public finances, particularly in terms of declining revenues, the DOF official said this had led to measures being taken by the government to decrease operational spending and strengthen investment spending.
Economic incentives issued under the directives of Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council of Dubai, to support the business sector in the emirate, have contributed to achieving institutional agility through structuring the government to achieve financial sustainability, he added.
According to him, Dubai government is expected to achieve public revenues of AED52.314 billion, despite the economic incentive measures adopted by the government that would reduce some fees and freeze the increase in fees, and the decision to not impose any new fees without providing a new service.
These revenues are based on ongoing operations in the emirate and do not rely on oil revenues. Oil revenues account for 4 per cent of the total projected revenues for the fiscal year 2021. This is in addition to developing the government revenue structure, which will enhance financial sustainability, he added.
Non-tax revenues, which come from fees, account for 59 per cent of the total expected revenues, while tax revenues account for 31 per cent, and government investment revenues represent 6 per cent of the total expected revenues.
Arif Abdulrahman Ahli, Executive Director, Planning and General Budget Sector at DOF, pointed out that the initial estimates for 2021 suggest that GDP will see four per cent growth, supported by continued recovery of economic activities.
"The government will continue to enhance the role of the private sector so it can serve as one of the main engines of economic growth," he observed.
"We will also continue to support SME's in conjunction with the government’s continued implementation of structural reforms aimed at diversifying the economy, improving the business environment and opening new horizons for domestic and foreign investment," he added.
Ahli said the 2021 budget comes in response to the requirements for recovery and dealing with the postponement of Expo 2020 Dubai.
"It also reflects the emirate’s financial stability through its implementation of financial policies as per best global practices. DOF seeks to develop programmes that aim to raise government spending efficiency and promote partnerships with the private sector. Additionally, it also seeks to constantly develop the budget and review its implementation," he added.