By Frank Kane
The UAE will take center stage on the world stage for the next six months – the length of Expo 2020 Dubai, the extravagance of business, technology, connectivity and pure showbiz finally kicking off at a sumptuous opening ceremony Thursday.
There is no doubt that the exhibition will raise the profile of Dubai and the United Arab Emirates while it is being held, but in order to justify the billions of dollars that have been spent there by government and the private sector, policymakers are ‘expect there to be a long-term economic “legacy”.
Organizers have long recognized this and seek to highlight the expected permanent change in economic conditions since the UAE was granted the right to host the event in 2013.
The so-called expo effect has been a constant feature of economic commentary on Dubai and the United Arab Emirates, in what has been termed a discipline of Economics.
The message from the organizers is that expo means “investing in a resilient, long-term future for the economy of the United Arab Emirates.” The Expo’s capital spending will drive a wider economic impact in key sectors, including construction (such as facility and infrastructure development, and pavilions for international participants), transportation, storage and communications, as well as travel, tourism, hospitality and business services.
Additional investments by the Dubai authorities in transport, utilities and other infrastructure will improve long-term economic growth, while small and sustainable businesses will also benefit from a boost through the event. 0 seconds of 2 minutes, 33 seconds Volume 70%
In particular, the exhibition and conference industry – already a major source of money for Dubai – will be taken to the next level with the creation of the Dubai Exhibition Center and District 2020 to host major international forums.
The Expo will accelerate the UAE’s efforts to diversify its economy, support the growth of a knowledge-based economy and smart connectivity, and boost cultural and creative life, officials said.
Putting concrete economic and financial figures on these strategic economic policy goals has been made more difficult by the COVID-19 pandemic. In 2019, global consulting firm EY carried out an economic impact assessment of the exhibition.
“Expo 2020 Dubai and its legacy is expected to contribute 122.6 billion Emirati dirhams ($ 33.4 billion) of gross added value to the UAE economy from 2013 to 2031,” EY said, adding a 1.5% increase in annual gross domestic product over the six months. of the event and tens of thousands of new long-term jobs created.
Importantly, EY expected the event to attract 25 million visits from 190 countries, 70% of which would come from outside the United Arab Emirates.
Matthew Benson, EY Partner, said: “Expo 2020 is an exciting long-term investment for the UAE, and is expected to have a significant impact on the economy and the way jobs are created directly and indirectly. . “
It’s unclear whether EY has updated its forecast to reflect the worst economic recession in decades in 2020, but independent economists are taking a somewhat more cautious view of the long-term economic legacy.
“The 25 million exhibition visits may be a bit too optimistic during an ongoing pandemic,” Nasser Saidi, regional economics expert and former Lebanese Minister of Economy and Industry, told Arab News.
But he acknowledges the success of hosting the event after an unprecedented slowdown in travel, trade and tourism in 2020.
“No one envisioned the scenario in which the exhibition would ultimately take place,” he said. “Expo 2020 will be the world’s first mega-event to allow physical entry for visitors, after the Tokyo Olympics were held without spectators.
“A successful event will strengthen Dubai and the UAE’s image as a global leader in safely hosting large-scale events during the pandemic period. The exhibition will serve as a springboard for potential investors to buy in Brand Dubai and move businesses and families around the country. “
For Dubai, which thrives on global connectivity and travel, there was a great incentive to open up the economy as soon as possible, with the first interim steps towards reopening taking place last summer and accelerating as the UAE’s COVID-19 vaccination campaign was gaining momentum.
The UAE has now administered the vaccine to a greater percentage of its population than any other country in the world and has been rewarded with renewed optimism about the strength of its economic recovery.
The International Monetary Fund recently said that the UAE’s economy will grow 3.1% this year, a dramatic turnaround from the 6% drop in 2020. The exposure will help greatly.
James Swanston, Middle East economist at Capital Economics, a London-based consultancy firm, stressed that Expo 2020 would be a “welcome boost” for Dubai’s economy, especially in vital sectors related to the economy. tourism.
He said: “About a third of GDP is made up of sectors like hospitality and wholesale and retail trade, and the latest figures show GDP contracted 10.7% year-on-year in the first half of the year. 2020. More recent data indicates a slow recovery, tourist arrivals were only a quarter of their pre-pandemic level in the first half of 2021.
“Dubai has placed its hopes in the fair to strengthen its attractiveness as a destination for tourists and expatriate workers. In addition to targeting 25 million visits to the exhibition itself, authorities have set high ambitions of 23 to 25 million tourist arrivals to Dubai by 2025, which would make it the most visited city in the world. world – for context, 16.7 million tourists visited Dubai in 2019. ”
Swanston noted that officials also hoped that one in 20 visitors to the exhibition would decide to reside in Dubai permanently, which would imply a short-term population increase of around 10% for the entire UAE. United.
These considerations are particularly relevant for real estate in the United Arab Emirates, which is in the early stages of recovery from a sluggish real estate market that started in 2014 and still remains below this level.
It remains to be seen whether these goals will be met at Expo 2020. Organizing such a large event is an expensive and demanding exercise, although no up-to-date detailed figures on the actual cost are available from the public. organizers.
“Hosting such mega-events usually turns out to be a strain on the budgets of countries or cities,” Saidi said.
“The economic arguments in favor of organizing such events are based on the increase in economic activity, the increase in the number of tourists and spending, the construction of the intangible brand of Dubai, as well as other impacts qualitative and social, such as strengthening trade and business with their global counterparts.
“Plus the feel-good factor, which is more important during a pandemic when trying to get back to normal.”
This sentiment seems to be the consensus among “Exponomics” experts: The UAE should be congratulated for hosting the first mega-event of the post-pandemic era, with real people, and will only improve its reputation in the world. over the next six months.
“The direct financial impact on Dubai’s economy could be mitigated by the pandemic,” Tarek Fadlallah, managing director of Nomura Asset Management in the Middle East, told Arab News. “But it will leave a lasting impression on its reputation and its economic development.”