Dubai Economic Outlook 2011

Macro Economic Projections

Item
Real GDP Growth World MENA UAE Inflation World Inflation UAE World Trade World Trade Growth Developed Developing Countries UAE Trade (USD Billion) Exports Imports Total Trade 198.3 159.0 357.3 222.1 171.8 393.9 231.8 182.1 413.9 248.6 198.4 447.0 269.3 216.7 486.0 12.5% 11.0% 14.5% 6.9% 6.0% 8.0% 6.4% 4.3% 9.0% 6.5% 4.5% 9.0% 6.6% 4.6% 9.1% 2.9% 0.9% 2.7% 2.5% 3.0% 1.5% 3.2% 1.6% 3.3% 2.8% 3.8% 4.3% 2.1% 3.1% 4.4% 3.5% 3.0% 4.6% 4.6% 3.1% 4.6% 5.0% 3.0% 4.8% 5.7%

2010

2011

2012

2013

2014

2
Source: Economist Intelligence Unit, UAE Country Report March 2011 / Global Outlook September 2010

Macro Economic Projections

7.00% 6.00% 5.00% 3.50% 3.00% 2.50%

4.00% 3.00% 2.00%

1.00% 0.00% 2010 2011 2012 MENA 2013 UAE 2014 World

2.00% 1.50% 1.00%

0.50% 0.00% 2010 2011 World 2012 2013 UAE 2014

600 500 400 300 200 100 0 2010 Imports 2011 2012 Exports 2013 2014 Total Trade

350 300 250 200 150 100 50 0 2010 2011 2012 FDI 2013 2014

3
Source: Economist Intelligence Unit, UAE Country Report March 2011 / Global Outlook September 2010

Macro Economic Overview

UAE real GDP is expected to steadily increase during the next 5 years, surpassing the average world real GDP growth.

Trade volumes are also expected to increase for UAE during the forecast period (2010 2014), which is one of the key drivers of demand for industrial space.

The foreign direct investment is expected to increase on a steady pace.

Free Zones around the World

Shannon Shenzen Tianjing Jebel Ali Panama Singapore Incheon

South Africa

The best combination of these models suggests the following are critical factors for their success: Proximity to markets Preferential market access (trade agreements) Access to ports, infrastructure Availability of human talent for target industries Tax holidays Fast track approvals for all administrative procedures Flexible labor regime with minimum cost and delays in the hiring and firing process

Its evident that comprehensive zone has become the preferred model of free zone/ special economic zone especially in East Asia Provide all necessary amenities for supporting normal life Contain dedicated industrial/ science zones and free trade zones Attract human talent due to excellent living conditions Attract financial capital due to wide range of options for business Have a self sustaining government & economy with little outside influence

Competitiveness of a Location
Access to Decision makers Mobility

Push Drivers
Develop a new market

Market Size

Accessibility

Pull Drivers
Servicing an existing client Winning a new contract

Regulations (100% ownership) Cost of doing business

Living standards & life style

Industry

Operational Efficiency Institutional Capacity

1 2 3 4 5 6 7
Starting a business

Dealing with License

85 82 75 75 72

20 21 24 22 16 23 22 38 32

40 45 50 50 38 48 44 50

26 31

14 4 2 2 14 26 30 3 5 16 2

Employing Workers

24 27 32

Registering Property

69 67

Getting Credit

Protecting Investors

Customer Satisfaction Surveys

Dubai Government Excellence Program

Paying Taxes

Governments Excellence Programs emphasis operational efficiencies.

8
9
10

Trading Across Borders

Competitive Centers own program continues to drive operational improvement through customer satisfaction surveys. Overall Process: The ability to execute transactions faster is a key driver of

Enforcing Contracts

Closing a Business

customer experience. Physical Development: Products choices for investors drive effectiveness of CC

Doing Business Survey

Performance in Context
1,400.0
1,179.6

1,200.0

1,138.4 1,000.0 959.3

800.0 610.5 600.0

400.0

490.6

209.1 200.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 World GDP UAE GDP Dubai Trade Jafza Trade Jafza Customers JZone Employees

World GDP= IMF, World Economic Outlook Database, Mar 2011. UAE GDP = IMF, World Economic Outlook Database, Mar 2011 Dubai Trade & Jafza trade = Statistics Department, Dubai World. Jafza Customers, zone employees = FreeComs, EZW .

Jafza Companies & Zone Employees

6,600
6,400 6,200 6,000 5,800 80,000 5,600 5,400 5,200 5,000 Jul-08 Jul-09 Nov-08 Nov-09 Jul-10 Nov-10 Apr-08 Apr-09 Sep-08 Sep-09 Apr-10 Jan-08 Jan-09 Jan-10 Sep-10 Oct-08 Oct-09 Mar-08 Mar-09 Dec-08 Dec-09 Mar-10 Oct-10 Aug-08 Aug-09 May-08 May-09 May-10 Aug-10 Dec-10 Feb-08 Feb-09 Feb-10 Jun-08 Jun-09 Jun-10 60,000 40,000 20,000 -

180,000
160,000 140,000 120,000 100,000

Customers

Employees

Steady growth of number of companies within Jafza. Companies within the zone have reacted to economic crisis by reducing resources. No of employees is leveling.
Jafza Customers, zone employees FreeComs, EZW .

Industrial Market

Tier 1: Demand for high quality developments. BTS warehouses.

Tier 2: Regular speculative development.

10
Source: CBRE

Jebel Ali Port

Capacity Container Traffic Shipping Lines

14.5 million TEU

Services/Calls

Over 11 million TEU

Annual Vessel Calls

Over 150
Quayside Draft

Over 90 Weekly

Over 12,000

14-17 m

Largest container port outside of Asia. Hub connecting East West & North South Trades. Common feeder network hub for GCC/Iran/Iraq/ISC/RSEA/EAF Quad/Tandem Lift - the world's largest gantry cranes enabling the port to cater to the new generation of megaships 2009 Best Middle East Seaport for the 15th consecutive year (AFSCA)

Dubai Sea Port Connectivity

Jebel Ali Port Connecting the World
(Transit Times and Weekly Services)

Northern Europe 18 days / 9 services Mediterranean 13 days / 6 services

Red Sea 12 days / 5 services

USA (East) 21 days / 4 services

Far East 20 days / 23 services India 4 days / 31 services

Intra Gulf 1 day / 25 services West Africa 16days / 2 services South America 25 days / 2 services East Africa 8 days / 2 services South Africa 12days / 4 services

South East Asia 7days / 11 services

Oceania 27days (Transshipment)

12

Dubai International Airport & Cargo Village

Cargo Capacity Cargo Handled Passenger Capacity

2.5 million tons pa

Passenger Traffic

2.2 million tons in 2010

Destinations

60 million pa

Airlines

+40 million in 2010

Over 200 cities

130

8th busiest cargo airport and 13th busiest passenger airport in the world in 2010 17% yoy growth in cargo volumes in 2010 15% yoy growth in passengers in 2010 Cargo Village Handles twenty freighters a day with a 90 minute turn-around for a fully laden 747

Source : Emirates 24|7 March 2011

Dubai Air Port Connectivity

Dubai International Airport Emirates Network

London (7.5 hrs) 26 weekly flights New York (14 hrs) 14 weekly flights Los Angeles (16.5 hrs) 7 weekly flights Moscow (5 hrs) 14 weekly flights Rome (6.5 hrs) 14 weekly flights Shanghai (8.5 hrs) 14 weekly flights Seoul (8 hrs) 12weekly flights Tokyo (10 hrs) 5 weekly flights

Casablanca (9.5 hrs) Cairo (4 hrs) 7 weekly flights 10 weekly flights

Doha (1 hr) 35 weekly flights Mumbai (3 hrs) 35 weekly flights

Addis Ababa (4 hrs) 7 weekly flights Singapore (7.5 hrs) 14 weekly flights Sao Paulo (15 hrs) 7 weekly flights

Cape Town (9.5 hrs) 7 weekly flights

Sydney (14 hrs) 14 weekly flights

14

Dubai Land Connectivity

Dubai GCC Road Network

2,000 Km

DUBAI

500 Km

1,000 Km 1,500 Km

15

Challenges
Access to key markets
Exclusion of Free zones from trade agreement

Competition
Copying Dubai model

Cost of Doing business

OPEX related.

Challenges

16

Our Strength

Physical Infrastructure

Institutional Capacity

Industry Momentum

17

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