Emerging Regions Final Project - David Knezevic

8/14/2019 Emerging Regions Final Project - David Knezevic

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CEU Business School Full time MBACEU Business School Full time MBA

Emerging regions: Middle East and North AfricaEmerging regions: Middle East and North Africa

Final Project: Sustainabile Urban Development in United Arab EmiratesFinal Project: Sustainabile Urban Development in United Arab Emirates

Emerging regions: Middle East andEmerging regions: Middle East and

North AfricaNorth Africa

Sustainabile UrbanSustainabile UrbanDevelopment in United ArabDevelopment in United Arab

EmiratesEmirates

By David KnezevicBy David Knezevic

Budapest 2009.Budapest 2009.

David Knezevic 7/1/2009 Page 1 of 16


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TABLE OF CONTENTS

7. Independent variable

7. Dependant variables

7. Hypothesis - Dubai as a leader

7. United Arab Emirates

4.1. Geography

4.2. History

4.3. Politics

4.4. Economy

4.5. Dubai

4.6. Abu Dhabi

7. Analysis of dependant variables

5.1. Economic Environment

5.2. Regulatory Environment

5.3. Construction standards

5.4. Property investment indicators

7. Conclusion

7. Literature



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1. Independent variable

We live in a world where sustainability is more important than ever before. Currentapproach reaches far beyond its verbal meaning and calls to action, as it has become a wide-ranging term which can be applied to every aspect of life and can vary from a local to aglobal scale and over various time periods.

Especially in urban development, sustainability is no longer just a charitable option.That is the only reasonable step forward. Many real estate environment professionals inUnited Arab Emirates, and particularly in Dubai realise that sustainablity needs to be part ofthe grand plan of their society while urbanising at the rate far higher than in many MENAcountries.

Efforts to live more sustainably should be made and usually take many dimensions,from reorganising living conditions, revaluating economic sectors, redesigning workpractices. All these should use science to develop new technologies which can upgrade livingon Earth to a higher level, the level which will harm environment far less and will ensuresustainable development to our descendants.

According to Bruntland Commission this is development which meets the needs of thepresent without compromising the ability of future generations to meet their own needs.

Essence of this concept is within two key concepts:

the concept ofneeds,

the idea oflimitations imposed by the level of technology and social organizationon the environment's ability to meet present and future needs, and to recover fromcontaminations.1

This project is questioningSustainable urban development in United Arab Emirates.Focal point of the analysis will be the Emirate of Dubai as its the most criticized or flatteredone out of seven Emirates. Some admire it as the global leader and characterize as theLargest manmade development in the world (including Palm Jumeirah, Burj Al Arab, BurjDubai, The World Project, Emirates Mall etc.). Other criticize it saying that is only a bigshow off and a real estate excess, that certainly meets no reasonable needs and operates in no

limitations environment, such a selfish colony somewhere in outer space.

2. Dependant variables

In order to successfully conduct such a research project one should look for the mainfactors that have influence on independant variable. By using only legitimate literature authorwill take an educated guess, based on objective indicators and unbiased information.

1International Commission on Education for Sustainable Development Practice Final Report October 2008.



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Substantionaly important factors forSustainable urban development in United ArabEmirates are following:

Economic Environment

Regulatory Environment

Construction Standards Property Investment Indicators (PII)

Analysis of these variables will be the main body of this research project and will resultin positive or negative outcome related to our Hypothesis.

3. Hypothesis - Dubai as a leader

As an immediate outcome of a brief look over the main factors one have to take astandpoint which will syntethicly merge independant and dependant variables, and formulatea Hypothesis.

This Hypothesis will be testified and discussed with the help of academic literature, bygoing through one variable after the other:

Dubai is leader in sustainable urban development worldwide

4. United Arab Emirates

Before start of analyzingSustainable urban development in United Arab Emirates, Ifeel motivated to explain briefly this marvelous country, which transformed from illiteratesociety into one of the world most sophisticated in last three decades, from poor livingstandard to a great one, and from tent to a world class skyscrapper.

4.1. Geography

The United Arab Emirates is a federation of seven states (emirates) situated in theSoutwest Asia, on the southeast of the Arabian Peninsula on the shores of Arabian Gulf. UAE

is bordered from the north by the Arabian Gulf, and from the west by the Kingdom of SaudiArabia, and from the south by the Sultanate of Oman and the Kingdom of Saudi Arabia, andfrom the east by the Gulf of Oman.

The capital and second largest city of the United Arab Emirates is Abu Dhabi. It is alsothe country's center of political, industrial and cultural activities. The total area of the countryis 83600 Sq km, which includes an archipelago with an area about 5900 Sq km.

The total population in 1995 was 2.411.041 persons, and in oly 10 years increased up to4.1 million. Very interesting is that over 80 per cent are expatriates.

4.2. History

http://en.wikipedia.org/wiki/Abu_Dhabihttp://en.wikipedia.org/wiki/Abu_Dhabi


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Recent history of United Arab Emirates is connected to the personality of Sheikh Zayedbin Sultan Al Nahyan, father of UAE nation. Other two very important factors were Britishinfluence and discovery of oil reserves in 1960s.

Discovery of oil led to quick unification calls made by UAE sheikdoms. Sheikh Zayed

became ruler of Abu Dhabi in 1966 and the British started losing their oil investments andcontracts to U.S. oil companies.2

At the time of the imminent withdrawal of the British military and diplomaticprotection between 1968 and 1971, the sheikhs of the Emirates decided to form a TrucialStates Council to coordinate matters between them and took over the development office.Shaykh Zayed had been a proactive advocate of cooperation between the Gulf states whenhis emirate and a group of other small shaykhdoms had to decide on their political structureand future statehood. In the beginnings of the Trucial States Council, Qatar and Bahrain wereexpected to form part of a federal solution. When these two decided in 1971 to go alone, theseven

Trucial States formed a federation, called the United Arab Emirates.3

4.3. Politics

Politics of the United Arab Emirates takes place in a framework of a federalpresidential elected monarchy, a federation of seven absolute monarchies. There should benoted that death of Shaykh Zayed, who had been the UAE's only President in 33 years of thecountry's existence as a modern state, was a substantial shocking moment for this youngnation's development.4The UAE's political system, a unique combination and balance of the

traditional and the modern, as everything in this country is.

The presidency and premiership of the UAE is de facto hereditary to the Al Nahyanclan of Abu Dhabi and the Al Maktoum clan of Dubai. The President of the United ArabEmirates and the head of state is the ruler of Abu Dhabi (Khalifa bin Zayed Al Nahyan) andthe Prime Minister and Vice President of the United Arab Emirates, is the ruler of Dubai andthe head of government (Mohammed bin Rashid Al Maktoum). The political influences andfinancial obligations of the Emirates are reflected by respective positions in the Federalgovernment. While each Emirate still retains autonomy over own territory, a percentage of itsrevenue is allocated to the UAEs central budget.5

4.4. Economy

The UAE is one of the most developed countries in the world. This assumption is basedon various economic indicators such as GDP per capita(PPP), energy consumption per capita,and the Human Development Index. Their GDP per capita is currently 17th in the world asmeasured by the IMF; while at $168 billion in 2006, with a small population of 4 million, theGDP of the UAE ranks second in the Cooperation Council for the Arab States of the Gulf

2http://countrystudies.us/persian-gulf-states/85.htm

3 The United Arab Emirates: Statehood and Nation-Building in a Traditional Society, Middle East Journal, Vol. 59, No. 34The United Arab Emirates: Statehood and Nation-Building in a Traditional Society, Middle East Journal, Vol. 59, No. 35http://www.uaeinteract.com/government/political_system.asp



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(just behind Saudi Arabia), third in the MENA region after Saudi Arabia and Iran, and 38thworldwide.6

There are various comments and estimates about the actual growth rate of the UAEs

Gross Domestic Product. However, all available findings indicate that it currently has one ofthe fastest growing economies in the world. UAEs economy grows around 35% annually.Although the UAE is becoming less dependent on exploatation of natural resources as a

source of revenue,especially comparing to other GCC countries, oil and gas exports still playan important role in the economy (25% of GDP), especially in Abu Dhabi (as it containsapproximately 9% of worlds known reserves of oil and 1,3% of worlds known gas reserves)

A massive construction and real estate boom, an expanding manufacturing base, and athriving services sector are helping the UAE diversify its economy. UAE has one of thelowest unemployment rates in the world, and attracts a great number of foreign workers.

4.5. Dubai

Globally recognized as a city of inspiration and imagination, sand and sea transformedinto Heaven on Earth, and a biggest manmade development in the world, Dubai is a symbolof 21st century and an EST capital of the World. In 2007 when estimated worth of allconstruction works in progress was $360bn, Dubais share was between 10 and 30%,according to various sources.

Among the other interestings its very important to mention that Dubai has the smallestshare of its GDP (less than 6%) contributed by oil and gas exploitation, comparing to allother oil rich areas in the world. Mainstream of Dubais income comes from Real Estate andProperty development. The other contributors are: Logistics, Tourism, Financial Services,Manufactoring etc.

Capital of Imperatives or the EST capital got its nickname with such projects as: Burj Al Arab Probably one of the first incredible buildings in Dubai, host to

the worlds Best Hotel. Burj Dubai When completed (2010), will become the world's tallest building, Dubai World Central International Airport - When completed, will be the most

expensive and luxorious airport ever built Palm Islands - The largest artificial islands in the world, that increased UAEs

coastline for over 800km. Dubai Mall - The world's largest shopping mall. The World - Largest and probably the only man-made archipelago. Dubailand When completed will be the largest entertaining park (is expected

to be twice the size of Disney World) Dubai Sports City - Will provide homes for local sports teams and may be part

of future Olympic bids.

4.6. Abu Dhabi

For a long time in shadow of Dubais success, one of the world's largest producers of

oil, Abu Dhabi has actively attempted to diversify its economy in recent years through6World Economic Outlook 2007 International Monetary Fund



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investments in financial services and tourism. Abu Dhabi is the wealthiest emirate of theUAE in terms of per capita income and GDP. The average net worth for Abu Dhabi's 420,000citizens is $17 million. More than $1 trillion is invested worldwide in this city alone.

In order to make a huge step

forward and reach a success of the older brother, rulers of Abu Dhabi designed a five-year strategic plan for municipality that communicates bold and far reaching vision, that will

be executed from 2008 till 2012.

The plan defines 8 pillars for best services:

1. Premium education, healthcare and infrastructure2. Large empowered private sector3. Creation of sustainable knowledge based economy4. Optimal transparent regulatory environment5. Continuation of strong and diverse international relationships

6. Emirate resource optimization7. Maintenance of Abu Dhabi values, culture and heritage8. Significant and ongoing contribution to the federation of UAE

5. Analysis of dependant variables

As stated before, substantionaly important factors forSustainable urban developmentin United Arab Emirates are following:

Economic Environment Regulatory Environment Construction Standards

Property Investment Indicators (PII)

5.1. Economic Environment

Economic environment is the first and the most significant driver of UAEs success inlast 30 years. This said, I recognize a strong correlation between increase of GDP and urbandevelopment, which further improved situation and attracted humongous amount of foreigndirect investments in this small Gulf state. Main questions that should be answered byexploring this variable are:

Will the states economy be stabile after exploiting all fossil fuel resources?

United Arab Emirates are already recognized amongthe least dependant Gulf-states economy on oil and gas

(less than 25% overall). This number is even morepersuasive when we see Dubais GDP, where the part



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of oil and gas doesnt exceed 6%. As seen on Figure 3,UAEs real GDP growth rate is less dependant on

oil than ever before.Very important feature of UAEs economy are great trade

Agreements with USA and EU. Many internationalCorporations have their headquarters for Middle East,Central Asia and North Africa in Dubai.

Dubai in 2007 was announced as a biggest shopping destination in the world, whereexistence of high-end shopping malls (Ibn Battuta, Emirates Mall, Dubai Mall etc.) andfavorable tax and customs policies attracts shoppers from various parts of the globe.

Unemployment rate is very low 2,4%, and UAE employs about 80% of foreign labor.

During last 5 years Dubai International Financial

Exchange (DIFX), with a market capitalizationof $40 billion, grew into an international stock

exchange located in the DIFC and regulated by theDubai Financial Services Authority. Currently this

Stock exchange is operated by NASDAQ.Its standards are comparable to those of leading

international exchanges in New York, London andHong Kong (Table 1). By increasing power and

presence of NASDAQ Dubai, UAE arebecoming more stabile, sustainable and desirable financial market where an increasing

number of international institutional investors invest in very diversified number of financialproducts.

Inflation is forecasted to fall during 2009, but not as much as in low-income countries,where food constitutes a dominant share of the consumption basket. The completion of newhousing units in UAE is likely to help alleviate the supply constraints that have fueledinflation in the GCC, but inflation is expected to remain in double digits in 2009.7

Will it be able to keep attracting foreign labor force and foreign direct investments in along run?

When we look at 2008 FDI in numbers and over 480 projects, creation of 87.000 newjobs, and $36bn in capital expenditures, there is no doubt of emergence and increasedinvestment activity in UAE. "This report is a testament to the strategy of both the UAE andDubai under the directives of HH Sheikh khlaifa bin Zayed Al Nahyan, President of the UAEand HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister ofthe UAE and Ruler of Dubai; a strategy of openness and diversification. The number of

projects initiated, the capital investment and jobs created in the UAE are proof of theeconomic strength of the country. It is a remarkable achievement by Dubai to become theleading city in the world for foreign direct investment and we are committed to continuing todemonstrate the benefit of investing in Dubai and the UAE.8

7Regional Economic Outlook 2008 International Monetary Fund8His Excellency Dr. Omar Bin Sulaiman, Governor of the Dubai International Financial Centre and Vice Chairman of the Central Bank ofthe UAE



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In 2008, Financial Times announced Dubai as a top FDI destination city in a world,surpassing Shanghai and London.9 Dubai started to be recognized as a strong financial centerwith sharp anti-money-laundering controls

Large government spending on job creation and infrastructure transformation increasedin 2009 despite the global economy collapse.

Summarizing all facts of UAE economy, I will notice that economic environment is

on desirable level of sustainability as FDI combined with non-oil contributors in GDP

drive economic activity.

5.2. Regulatory Environment

Regulatory environment of a local tax system is among the vital factors when deciding

whether to invest or locate business operations in a territory or just simply dont bother toenter the market. This project will include a brief evaluation of the applicable taxes andcustoms duties, the rates of such taxes and duties and whether exemption or reliefs will beavailable. Besides taxation law, great importance in sustainable foreign FDI support proper

property and labor law.

Will the government remain friendly tax environment once the mainstream cash flowsderived from oil and gas dry out?

The United Arab Emirates are an attractive destination in which one invest or set upbusiness operations favored by relative inexistance of personal and corporate taxes. Most ofthe taxes, which form the significant part of an individuals or companys fiscal expenses inother countries, either do not exist or are not levied in the United Arab Emirates.Furthermore, only a few industries (oil, gas and petrochemical companies and branch officesof foreign banks, etc.) are in subject to these taxes.

It is not expected that this approach will deviate in the medium to long term. Further,those taxes of more general application are not demanding and the United Arab Emirates hassigned number of double taxation treaties with other countries (to restrict paying andcharging taxes to a person in connection with the same matter in the two different countries).Countries that already signed are: France, Holland, Italy, Germany, India, China, Thailand,Belgium, etc.10

Few weeks ago, Dubais government decided to permanently deduce business andpermitting fees up to 50%.11 This incentive was explained as their support to investors andbusinesses during recession period.

There is no federal tax legislation in the United Arab Emirates. Every single Emiratehas its own tax law.

Overall the following taxes are not applicable in the whole country:= Personal income tax= Capital gain tax= Value-added tax

9 https://www.menafn.com/qn_news_story_s.asp?StoryId=109324737910

Al Tamimi & Company: Taxation law in the UAE11http://www.government.ae/gov/en/biz/howdoi/start.jsp



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= Withholding tax= Corporate tax

Especially benefectoral for individuals and companies who have chosen to invest in

Dubai is the constantly developing legal and regulatory framework that is necessary toprovide the legal protection and clarity that property ownership and investment require inorder for the Dubai property industry to be successful. Much of this framework in the real

property area has only been in place since 2006 in Dubai, and the goverment is putting allpossible efforts to attract, satisfy and expand the umbrella of potential annd existinginvestors.

This framework includes= Straight-forward registration of title, foreign individuals and companies are granted a

right to own a freehold interest, a right of usufruct or a long-term lease of up to 99 years indesignated areas of the United Arab Emirates. Registration of title is very simple and takes up

to a week from a moment of property purchase.= Modern strata laws, regarding jointly owned property, there is a framework which

covers two types of subdivision, namely: Subdivision within buildings (where common areaswill be created), and Subdivision within conventional methods of horizontal subdivision ofland (where common areas will be created).

= Hypotec laws, hypotec or mortgage contracts have to be registered with the LandDepartment. In this contract both parties (mortgagor and mortgagee) must specify the size ofthe loan, repayment period and the value of the property (according to a valuation of eminentexpert) to which the loan is connected. It provides that lenders obtain priority over unsecuredlenders in the case of default and provides for a court-assisted process, rather than a self-help remedy

which permits the lender to sell the property without having to go through a courtprocess.

= Tenancy laws, have emerged as Dubai and Abu Dhabi became regional leaders inoffice space development as a response to other protective laws and rights. Among many ofthem is clause that there is no increase in rent or other amendment to a tenancy may be madeduring the first 2 years of the tenancy.12

Summarizing these features of UAEs regulatory environment, I emphasize that

regulatory environment is completely customer oriented and upgrades future Foreign

Direct Investments to a great level of sustainability.

5.3. Construction standards

In order to reach sustainability in its true form, actions should be focused on majorissues that undermine it. Most of the people have an opinion that the logistics andtransportation are the biggest global polluters and their carbon footprint is the highest one.Others will argue that manufacturing industries are to blame. But not so many will recognizeconstruction industry and existing real estates as a major emitter ofcarbon footprint and one

of many industries that remains relatively unregulated.12http://www.tamimi.com/files/Legal%20Brochures/propertylaw.pdf

http://www.greenerpath.org/Carbon.htmlhttp://www.greenerpath.org/Carbon.html


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By 2020, more than 60% the worlds population will live in cities. This cities already

consume 50-70% of the worlds energy. All around the globe cities are now tied up incompetition with industry for power. Climate change is predicted to increase localtemperatures, so keeping cool in a warm climate will be one of worlds most demandingchallenges.

In a strong move, the United Arab Emirates are looking to provide acceptable solutionin craftinging environmentaly friendly regulations which provide accessible and fair methodof reduction regarding our environmental impact especially in urban areas.

Motioned by Shaikh Mohammed bin Rashid Al Maktoums 2007. Decree, all the UAErequire all new buildings to be Green Buildings.

Green Building is the construction practice which boost the efficiency with which

buildings and appended sites use resources (energy, water, materials (including waste), thesite, and the environment) while reducing building impacts on human health and theenvironment.

In Dubai and Abu Dhabi, prime objective of Green Building is to develop buildings thatare healthy places to live and work, environmentally responsible and fully profitable. These

buildings accomplish efficiency through improved: design, construction, operatingmanagement and ultimatelly disposal.

Sustainable buildings: cost less to operate, command a premium and improved rents, preserve natural resources for longer, improve health and productivity, can reduce pressure on city infrastructure.



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In year 2008. Dubai government announced requirements for all new projects to have

LEED (Leadership in Energy and Environmental Design) expert in development team.

Just two years ago, Sheikh Mohammed assigned WSP expert Tim Armstrong to craftdetailed Green Building Regulations. These include:

Site Sustainability(Site Protection, Dust Suppression, Soil Erosion, Building Shadingand Orientation, etc.)

Water Efficiency and Conservation (Water Use Reduction, Outdoor Water Use andWater Efficient Landscapes, Grey water Use, Reduction of Wastewater, etc.)

Energy Efficiency and Conservation (Lighting, Energy Efficiency, HVAC systems Heating Ventilation Air Conditioning, Elevators/Escalators, Computerized ControlSystems, Insulation, Metering, etc.)

Material Conservation and Resource efficiency (Demolition and Construction Waste,No Asbestos Usage, Reduced Lead Usage, Recycled materials, Thermal InsulationMaterials. Certified Wood, Based Paints Collection, Regional materials,etc.)

How serious about this issues are the UAE shows the creation of Masdar City. Thatsthe worlds first Carbon-Neutral, Zero-Waste city, fully powered by renewable energy locatednearby Abu Dhabi. The city is planned to cover 6 square kilometres and will be home to45,000 to 50,000 people and 1,500 businesses, primarily commercial and manufacturingfacilities specialising in environmentally-friendly products, and more than 60,000 workersare expected to commute to the city daily. No car access is allowed in Masdar City.

At the end, success of the UAE in environmentally sustainable leadership is confirmedwith many international awards. Currently, out of ten top green towers worldwide, two are inDubai. Four new green mega office towers are in construction in Dubai and one in Abu-Dhabi. Furthermore, nine buildings are awarded Platinum LEED green building certificatewith alternative energy sources.

Taking into consideration previously mentioned there is no other than to greet

successes of UAEs environmental policies. No other country projected this great level

of sustainability while regulating building standardization. Another indicator is fully

empowerance of Leadership in Energy and Environmental Design (LEED).



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5.4. Property investment indicators

As a result of regional underdevelopment, overall the need for development aid is oftenmore pushy than the need for new business infrastructure. Also its too early for many to

view MENA as emerging area of real estate opportunity.Nevertheless, one can notice steady increase of private and corporate interest in

appearance across the region. This is mostly stimulated through commodity markets but alsoby the opening up of new economies and liberalization in areas of production and demand.

Business and real estate development will provide the greater wealth and independenceneeded to stimulate social and political advancement.

But not everybody in the region is underperforming! Still there are beacons ofdevelopment and modernity in every sense, and especially in terms of their real estatemarkets. Like nowhere southern hemisphere, the United Arab Emirates,Kuwait and Israel,show the richness in supply and understanding investors requirements..

In year 2007 Construction and Real Estate (residential, office, retail, hotels etc.) weremain contributors to Dubais GDP (over 50%). This number present stress and significancethe UAE sheikhdoms gave to real estate developments. The office market within the MiddleEast is directly linked to the stability of the region. Currently, the GCC states are creatinglarge scale real estate market development and in particular, locations such as Dubai andMuscat are growing quickly. Dubai, as an office space market has taken advantage of itslocation and time zone and is marketing itself as a financial hub located between the majorfinancial markets of London and Tokyo.

In June 2009., among Cushman & Wakefield top three investments projects worldwide,

there was an Office center in Dubai. What made this project so special was guaranteed 10 %Return On Investment. Not so many markets and real estate developers are keen to guaranteeto investor so much, especially not this high yield, which will at the end, not be taxed. If wecompare it with worlds top real estate markets and their volatilities (Londons yield is 5-6%),investing in Dubai is like buying diamonds.

Dubai already has the largest supply of AAA office space in MENA followed by thehighest rent levels - $550 sqm/year. Advanced calculation that explore the real benefit ofinvestment in the UAE office building is following.13

Not only in office market, the UAE posses the highest amount of premium qualityproperty on the MENA Real Estate market, and that includes:

Hotels Return on investment is very high, as many high-end hotel operators (Hilton,Ritz Carlton, Four Seasons, Atlantis, Trump Hotels, etc.) are willing to manage new

projects. Simultaneously, Arabs are establishing their own great hotel brands (Burj AlArab, Medina Jumeirah, etc.), which sometimes boost more profits than internationalhotel chains.

Commercial real estate As a worlds top shopping destination, retail space in modernshopping centers (Ibn Battuta, Emirates Mall, Dubai Mall, etc.) is worth as gold. Thisestablishments are usually pre-let and operate under 98-100% capacity. Forcomparative reasons, cost of building in Hungary is almost the same as there(2500e/sqm), but vacancy rate is higher (15-20%) and retail space rent is far lower

13Annual research of emerging markets Africa and Middle East, Cushman & Wakefield, Global Real Estate Solutions



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(600e sqm), so there should be understandable why educated investors are running ontoinvesting opportunity in the UAE.

Residential real estate Because of high demand for residential space, as of hugeamount of foreign labor force working in UAE, investing in this type of property is a

good choice. Most of the property is newly built and buying process is straight. Foreigninvestors really appreciate this conditions.

In order to better describe profitability of the market, I made a development projectionsfor a real project, 320.000sqm office building in Dubai Marina Waterfront.

Overall, even with all other dependant variables on satisfactory and promising

level, there will be no fair reason for Dubai to keep the development pace if there is no

forth element. Investors go where the money is, and that is true for small individual and

especially for institutional incorporated investor. Having great return on investment

rate, low vacancy rate, high rents, high quality property, transparent ownership title

law and stabile political and tax regime are major indicators of the UAEs high profile

and definite sustainability for a long term.

6. Conclusion

MENA region is very diverse area, as it includes some of the worlds most advanced

and some of the most closed and undeveloped economies. On the top of the first group that

stands for advanced reaches in HDI, high level of GDP and other economic indicators are

the United Arab Emirates.

Their Jewel when it comes to urbanization and FDI attractiveness is Dubai, one ofthe seven Emirates located on the North part of this small Gulf state.



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As this research confirmed, Dubai must be considered as one of the World Cities and

the place which represents leadership in energy and environmental design. Sustainability

of the building techniques, investment yields, regulatory and economic environment says

in favor of this leadership.

Through this paper it was proved that:

The UAE economic environment is on desirable level of sustainability as FDIcombined with non-oil contributors in GDP drive economic activity

Their regulatory environment is completely customer oriented and upgradesfuture Foreign Direct Investments to a great level of sustainability, this includes

all tax incentives, labor laws, property laws etc.

There is no other than to greet successes of the UAEs environmental policies. Noother country projected this great level of sustainability while regulating building

standardization. Another indicator is fully empowerance of Leadership in Energy

and Environmental Design (LEED).

There are fair reasons for Dubai to keep the development pace, as investorsalways go where the money is, and that is true for small individual and especially

for institutional incorporated investor. Having great return on investment rate,

low vacancy rate, high rents, high quality property, transparent ownership title

law and stabile political and tax regime are major indicators of the UAEs high

profile and definite sustainability for a long term.

7. Literature

International Commission on Education for Sustainable Development Practice Final

Report October 2008.

The United Arab Emirates: Statehood and Nation-Building in a Traditional Society,

Middle East Journal, Vol. 59, No. 3



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World Economic Outlook 2007 International Monetary Fund

Al Tamimi & Company: Taxation law in the UAE

Al Tamimi & Company: Property law in the UAE

Annual research of emerging markets Africa and Middle East, Cushman & Wakefield,

Global Real Estate Solutions

http://www.uaeinteract.com/government/political_system.asp

http://www.government.ae/gov/en/biz/howdoi/start.jsp

https://www.menafn.com/qn_news_story_s.asp?StoryId=1093247379

http://www.uaeinteract.com/government/political_system.asphttp://www.government.ae/gov/en/biz/howdoi/start.jsphttps://www.menafn.com/qn_news_story_s.asp?StoryId=1093247379http://www.uaeinteract.com/government/political_system.asphttp://www.government.ae/gov/en/biz/howdoi/start.jsphttps://www.menafn.com/qn_news_story_s.asp?StoryId=1093247379

Emerging Regions Final Project - David Knezevic

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