Will Dubai’s Expo 2020 win create an economic bubble?
Survey of investment professionals reveals both support and concerns.
November 20, 2013 5:09 by kippreport
While the majority of residents support Dubai’s bid to host the World Expo 2020, the results of a new survey indicate that more than half of the city’s residents are concerned that a victory would create another economic bubble.
The study, conducted by CFA Society Emirates and based on the feedback from approximately 215 investment professionals in the UAE, reveals that 97 per cent believes that Dubai is likely or very likely to win the Expo 2020 bid. However, only one quarter of CFA charterholders believe that the UAE has done enough to make its economy immune since 2008 and 55 per cent of residents are concerned about an economic bubble.
If Dubai wins the Expo 2020, 76 per cent expects a positive or significant impact on the real estate sector, while only 11 per cent would expect a limited impact on market pricing. Only four per cent believes that the costs associated with hosting the Expo 2020 will create a debt burden on the UAE economy.
Charterholders overwhelmingly support increasing regulation to increase the economy’s immunity to another bubble, with 87 per cent favouring real estate regulation and 75 per cent preferring bank regulation.
More than half of the respondents (56 per cent) predict that easier procedures for starting businesses would help protect the UAE from another bubble.
Amer Khansaheb, president of CFA Society Emirates, says that investment professionals in the UAE are very supportive of Dubai’s bid for Expo 2020 and nearly unanimous is their belief that Dubai will win the bid.
He adds: “The stock market, real estate and FDI sectors are all expected to be beneficiaries if Dubai wins, but many are concerned that a successful bid will create another economic bubble. CFA charterholders believe more government regulation and easier procedures for starting new businesses in the UAE would potentially help protect the economy from excessive speculation.”