The value of business conducted in the Dubai International Financial Centre rose to $2.92bn.
Value of DIFC activity rises 5.2%
The value of business conducted in the Dubai International Financial Centre rose 5.2 per cent last year to US$2.92 billion (Dh10.72bn) compared with the previous year, officials say.
An increasing influx of companies from emerging markets and the emirate's status as a haven from unrest elsewhere are expected to further boost the financial free zone's performance this year.
The Dubai International Financial Centre (DIFC) accounted for 3.6 per cent of the emirate's GDP last year and 1 per cent of national GDP, the free zone said. The UAE's economy grew 3.2 per cent last year, the IMF estimates.
"The results for 2011 will be substantially better," said Dr Nasser Saidi, the chief economist and head of external relations of the DIFC Authority. "You have the resolution of Dubai World and the banking and financial services resurge."
The number of companies in the DIFC increased to 773 last year from 706 in 2009.
But the number of people employed in the free zone fell 0.91 per cent, from 11,436 to 11,331. The dip was mainly due to a reduction in the number of public administration employees, said Dr Saidi.
DIFC staffing was cut back last year as the district embarked on an internal restructuring to become more dynamic after the global financial crisis.
The value of economic activity in the DIFC declined 2.4 per cent in 2009 from 2008 as the downturn took a toll on financial services.
The restructuring involved a change of strategy to direct the district's efforts towards attracting more companies from emerging markets. About 45 per cent of the companies operating in the free zone are from emerging economies.
"A key highlight of our strategy is to focus on emerging markets," said Abdulla Al Awar, the chief executive of DIFC Authority. "We feel there is potential for DIFC to play a significant role in emerging markets but also enabling international institutions from the West to access these growth markets through the DIFC."
As a result, a significant number of the companies setting up recently in the DIFC are from China, India and other developing countries.
Financial activities accounted for 72 per cent of the DIFC's GDP last year, with business services making up 26.5 per cent of activity in the free zone.
In comparison with the DIFC's performance last year, Singapore's financial services sector expanded by 9.9 per cent, and Hong Kong's financial services sector posted 7.9 per cent growth. In Bahrain, the Gulf's other financial centre, the sector grew 5.8 per cent.
Officials are hopeful of a better performance this year. One of the reasons for renewed optimism is an agreement about restructuring $24.9bn of debt at Dubai World.
Dubai's isolation from the unrest afflicting other parts of the region, notably its financial-centre rival Bahrain, have also benefited the DIFC, officials say.