Broader horizons: Continuing investments look set to help support growth in land, sea and air transport

Using a combination of central location and advanced infrastructure to attract trade operators from around the world, Dubai has successfully carried on its legacy as an shipping point between East and West. After the discovery of oil in 1966, the emirate benefitted from increased revenues, which authorities used to invest in upgrades to the transport infrastructure. This led to the establishment of many highways, Port Rashid, Jebel Ali Port and Dubai International Airport.

These investments in transport have paid off. In 2011 transportation, along with logistics, tourism and trade, accounted for 60% of Dubai’s GDP, according to a study by the Dubai Chamber of Commerce and Industry. With trade volumes still on the up, continued upgrades could make that share rise even higher. “In the past, it was all about location, location, location,” Khalifa Al Zaffin, the executive chairman of Dubai World Central, pointed out to OBG. “Today, it's about speed and connectivity.”

Leading transport development in the emirate is the Dubai Roads and Transport Authority (RTA), formed by decree in November 2005. Since then the government agency has been responsible for managing Dubai’s roads, ports and public transport system. To help develop transport, the RTA prepares legislation and long-term plans for the development of air and marine networks.

AN IMPRESSIVE PORTFOLIO: The emirate’s modern role as a global seaport began to gain momentum in 1972, with the completion of Port Rashid. The port grew quickly, necessitating an expansion in 1978 that brought its total number of berths to 35. In 1976, meanwhile, the authorities issued plans for a much larger port in the south-west of Dubai, bordering Abu Dhabi. The project, dubbed Jebel Ali Port, was the largest man-made harbour in the world upon completion in 1979.

In the following years, heavy industry grew around Jebel Ali, and in 1985 the authorities established a free zone in the area to facilitate logistics and trade connections. As time passed, coordination between Port Rashid and Jebel Ali Port grew more important, leading to the 1991 merger of the two into the Dubai Ports Authority. This arrangement lasted until 2005, when the pair merged with Dubai Ports International to create DP World. The merger created the world’s third-largest ports operator, with 60 terminals located on six continents, connected by more than 170 shipping lanes. Despite a growing presence abroad, DP World’s flagship port is still Jebel Ali. In the fourth quarter of 2011, DP World announced a three-year expansion plan of the port. The plan, including a 400-metre extension to the Jebel Ali quay and a new facility at Container Terminal 2, is set to increase Jebel Ali’s cargo capacity to 15m 20-ft equivalent units (TEUs) per annum. The development of a new 4m-TEU terminal, meanwhile, is set to further raise capacity to 19m TEUs by 2014. The $850m project, announced in December 2011, will convert 70 ha of the existing general cargo berth into a new container terminal.

CARGO RISING: Underlying such expansions is a rise in cargo traffic. “The UAE has seen remarkable growth this year and the terminal is currently operating at very high levels of utilisation,” said Mohammed Sharaf, the CEO of DP World, following the project’s announcement. Indeed, volume has risen significantly in the past decade. Between 2001 and 2011, total TEUs handled at Jebel Ali and Port Rashid rose from 3.5m to over 13m, according to DP World data. Port Rashid stopped receiving cargo in 2008 to take on a new role as the first dedicated cruise terminal in the region. The authorities planned the transition in a way that did not interrupt growth. Containers managed at the ports dipped by under 6% in 2008-09, from 11.8m to 11.1m TEU, in spite of the complete shift to Jebel Ali’s container terminal.

In addition to growth at Jebel Ali, plans for the Dubai Creek are also on the horizon. In May 2012, Dubai’s leadership announced a Dh200m ($54.44m) project to deepen the creek from five to seven metres, in order to allow larger ships to use it. “Dubai Creek and dhows are one of the most important part[s] of the economy,” said Hussain Lootah, Dubai Municipality’s director-general, following the project’s announcement. “[S]ome of them have difficulty in entering the creek. Therefore, we have decided to have more space, more handling areas, more logistics support. It is very important to keep the dhows close to the market.”

Further to this plan, Sheikh Mohammed bin Rashid Al Maktoum, Dubai’s ruler, announced a Dh1.5bn ($408.3m) extension for the creek in December 2012. Funded by the state-affiliated Investment Corporation of Dubai, the project is set to extend from Business Bay to the Jumeirah coast, with a section suspended over Al Safa Park and the Dubai Metro. Local press has called the suspended portion a “hanging canal”. The extension, accompanied by the Dh3bn ($816.6m) Deira Souq Expansion project, is set to herald a series of investment opportunities in and around Dubai’s historic centre. Leaders have stressed that the work around Dubai Creek could offer a boost to not only transportation but also tourism and retail activities in the area. Construction is set to take place in two phases, each two years long. The first phase will have a marina, six hotels and several residential and commercial high-rises.

FLYING HIGH: Aviation has become one of the fastest-growing segments in Dubai’s economy, responsible for nearly 30% of the emirate’s GDP, according to the Dubai Civil Aviation Authority (DCAA). Created in 2007, the DCAA is the government agency responsible for forming standards, regulations and overall policies for Dubai’s aviation sector. Dubai Airports, another government agency, manages the emirate’s two airports: Dubai International (DXB) and Dubai World Central (DWC).

Rising passenger numbers have supported aviation growth in recent years. Total passengers at DXB nearly doubled from 28.78m in 2006 to 50.97m in 2011. As of the end of 2012 DXB’s total passenger numbers seemed set to amount to 66m, surpassing a target for the year of 55.6m, according to Dubai Airports. The authorities attribute the rise in volume to a boost in traffic from Saudi Arabia, Australia, Qatar and the US.

Cargo volumes have also been on the up. Tonnes of cargo processed at DXB recorded a 41% increase year-on-year (y-o-y), from 1.41m to 1.99m, according to data from DCAA. At DWC, which opened in June 2010, the numbers have also been positive. The airport, which is not yet receiving passengers, processed 89,729 tonnes of cargo in its first calendar year, and 164,757 tonnes of freight in the first nine months of 2012.

Although DXB and DWC are adequate for current volumes, the two airports are undergoing expansions to handle expected increases. “Over the next 20 years the amount of passengers travelling will triple as well the amount of airline carriers,” Al Zaffin told OBG. “Dubai has proven to be a destination in itself and the DWC is preparing to be not only the main gateway into the emirate but into the region in general”. The aviation authorities’ approach is multi-faceted. In coming years a $7.8bn expansion plan at DXB is set to incrementally increase the airport’s passenger capacity, from 60m to 90m by 2018. To achieve these increases, a third and fourth concourse are on the way. UAE-based ALEC, part of the Abu Dhabi-based Al Jaber Group, is working on Concourse 3, the project costs of which come to a total of $3.5bn. The facility is set to have 20 aircraft stands, boosting passenger capacity at DXB to 75m. In December 2012, the concourse ran its first public trial, and stakeholders predict operations will commence in the first quarter of 2013. As for Concourse 4, Dubai Aviation decided to stay with ALEC for construction, awarding the firm a Dh3bn ($816.6m) contract in February 2012. The contract sets a 28 month build-time for the 150, 000-sq-metre facility, putting the estimated completion date for the facility as a whole around September 2014.

FINANCING ASSURED: Dubai Airport’s leaders are also confident about the financing prospects for expansion, saying that the government would offer assistance should private funds turn out to be insufficient. “If we need money, the Department of Finance will support us,” Paul Griffiths, Dubai Airport’s CEO, told Gulf News at the Middle East Business Aviation exhibition in Dubai in December 2012. “Any need of financing – be it issuing a bond or borrowing from lenders – would most likely be done through the Department of Finance.”

As DXB undergoes expansion and renovation, work to complete DWC is in progress. The airport opened for cargo operations in mid-2010. Dubai Airports expects to finish the project by 2030, with Dh17bn ($4.63bn) allocated for infrastructure alone. Upon completion, the DWC complex is set to be host to one of the world’s largest airports in terms of international passengers, with a maximum capacity of 160m passengers and 12m tonnes of cargo per year (see analysis). The facility will include eight districts, including residential and commercial ones, along with leisure districts to cater to those working near the airport. The airport itself at the centre of DWC will have a capacity of 12m tonnes of cargo per annum, a passenger capacity of 160m and an estimated cost in the range of $33bn.

Ramping up the aviation capacity of the airports should have positive knock-on effects for investment opportunities surrounding the projects. In addition to the construction of new facilities, aviation-related service providers will like see a steady stream of tenders on offer as airport expansion edges toward completion. In December 2012, Emirates Airlines announced the construction of a new flight academy that is set to accommodate up to 400 cadets at a time. The project’s $136m price tag includes the cost of facilities, maintenance equipment, training aircraft and simulators. The idea behind building a new academy is to help increase the pool of incoming pilots and accommodate the airline’s expected growth. “The aviation industry is growing at an exponential rate and the need for professional pilots is crucial,” said Abdel Al Redha, Emirates executive vice-president of engineering and operations. The airline plans to locate the academy at DWC.

RISING TO THE CHALLENGE: Though Dubai’s aviation sector has experienced growth recently, many of its counterparts have instead been hit hard by prevailing difficult global economic conditions. Overall airline profits reached their peak of $15.8bn in 2010, but halved to $7.9bn in 2011, according to the Montreal-based International Air Transport Association (IATA). As for 2012 profits, the IATA originally estimated they would halve again, to $3.5bn. In March 2012, however, the organisation tempered its annual profit estimates, further reducing them to $3bn.

UPWARD REVISION: The IATA attributed this change in large part to the increasing cost of oil, which makes up a significant portion of overall airline costs. By its October 2012 meeting, the IATA upwardly revised its forecast, to $4.1bn, arguing improved airline performance had helped to counter the rise in oil price.

Tapering oil costs and increasing passenger traffic also helped to buoy the organisation’s optimism, though the IATA continued to point out these positive factors still had to balanced against ongoing economic uncertainty in the eurozone, the organisation said.

Although global economic conditions have contributed to gloomy forecasts for the industry as a whole, within those estimates are several sunny spots for Middle Eastern carriers. Compared to global counterparts, Middle Eastern carriers stood out with strong 2012 growth figures. An 18.2% demand growth rate outpaced the year’s 13.4% increase in capacity, the IATA said in an August 2012 report. Cargo growth in the region has been especially robust. The region had the third fastest growth rate in terms of international freight markets in 2010, at 6.6% compared to figures for 2011, according to IATA traffic data released December 2012.

In its 2012 estimates, IATA had forecast $300m in after-tax profit for the Middle East in December 2011. In March 2012 the organisation revised that number up to $500m, thanks to stronger-than-expected financial performance, load factors and long-haul market revenues. By June, IATA settled on a $400m forecast due to economic uncertainty in Europe, a major customer for the region. “It’s still a reasonably good picture compared to the industry,” Tony Tyler, IATA’s director-general and CEO, told Bloomberg in June 2012, following the forecast revision. In a December 2012 briefing note by IATA, that $400m figure was unchanged.

Indeed, with a profits projected to beat December 2011 estimates, IATA’s 2012 Middle East forecast signals that the region has so far been able to weather the effects of a sluggish global economy.

HEAVY HITTERS: The GCC-based “big three” – Emirates, Etihad and Qatar Airways – are driving much of the region’s aviation growth. Joined by a set of growing low-cost carriers, the sector has so far successfully navigated its way through an otherwise especially tricky set of economic circumstances.

The largest player in Dubai is Emirates, owned by the government-affiliated Investment Corporation of Dubai. The carrier traces its history back to 1985, when it was established by the government of Dubai. At that time, Emirates wet-leased two aircraft from Pakistan International Airlines to operate flights to Karachi, Bombay and New Dehli. The airline, however, has come a long way from its humble beginnings. As of August 2012 its fleet of 178 aircraft was serving 125 destinations, helping transform Emirates into the world’s leading carrier in terms of international passenger kilometres flown.

With an additional 225 aircraft worth $62bn in the pipeline, the carrier’s leadership is preparing for continued expansion. In the first half of 2012, Emirates added nine new destinations: Barcelona, Buenos Aires, Dallas, Dublin, Harare, Ho Chi Minh City, Lusaka, Rio de Janeiro and Seattle. By year-end 2012 Adelaide, Erbil, Warsaw and Washington, DC, had joined as well.

Although taking on the costs of continued expansion may seem counter-intuitive during economically difficult times, a larger fleet and more extensive map could do much to increase future flexibility. The carrier’s strategy seems to have served it well so far. It reported a 16.2% revenue increase between its 2010/11 and 2011/12 reporting years, from Dh52.9bn ($14.4bn) to Dh61.5bn ($16.7bn). Despite these increases, the carrier’s operating profit decreased from Dh5.4bn ($1.5bn) to Dh1.81bn ($492.7m) during the same period. Smaller profits are attributable to political unrest in the region, volatile currency exchange rates and – perhaps most significantly – a major increase in fuel prices, the carrier said in an annual report. Indeed, jet fuel costs for Emirates rose 44.4% from Dh16.8bn ($4.57bn) to Dh24.29bn ($6.61bn), representing 40.2% of operating costs, the highest fuel cost-share in its history.

Indeed, the combination of a shaky eurozone, fluctuating fuel prices and growing competition in the region are set to pose significant obstacles in years to come. Nevertheless, Emirates’ leadership is optimistic about its ability to adapt. “The global… size of our operations makes it possible for us to continue to stick to our growth plan despite the eurozone difficulties,” Thierry Antinori, Emirates executive vice-president of sales, said in an interview with Bloomberg in June 2012. “And, if necessary, we’ll have contingency plans, but it’s not time now to do more than just to prepare in case.”

BUDGET CARRIERS: As regional aviation giants like Emirates, Etihad and Qatar Airways consolidate their market shares in the sector, a series of regional newcomers have entered the budget-end of the spectrum. In the past decade low-cost carriers like Sharjah-based Air Arabia, Dubai-based Flydubai and Kuwait-based Jazeera Airways have begun offering more affordable options to the region’s travellers. Flydubai and Air Arabia, based in the UAE, have taken strides in recent years.

Flydubai is also a relative newcomer to the market. Founded in July 2008 by the government of Dubai, the carrier started with routes shuttling passengers from its hub in DXB’s Terminal 2 to regional destinations like Beirut, Amman and Alexandria. Since then, the airline has expanded to 51 destinations with a 23-plane fleet.

Like other GCC carriers, Flydubai is setting itself up for future growth. In 2008 the carrier signed a $3.74bn purchase agreement for 50 Boeing 737s and has seen a string of successes in raising capital for its fleet expansion over the past few years. In March 2012 it approached the US-based Export-Import Bank for $253.2m in financing. Likewise, in May 2012 Flydubai concluded a $172m deal with Pembroke, a wholly owned subsidiary of UK-based Standard Chartered. The money is set to underwrite the cost of adding two Boeing 737-800NGs to the carrier’s fleet. In conjunction with its fleet growth, Flydubai is expanding its route map. On June 6, 2012 it announced plans for routes to Bucharest (Romania) and Skopje (Macedonia), scheduled to commence in October. The unlisted carrier does not release regular financial statements, but it has indicated that it expects to remain profitable in 2012, despite a difficult year and rising fuel prices.

The knock-on effects of Dubai’s successful airports and airlines are visible in other areas of the economy. Duty-free sales at DXB buoy the retail sector, new flight routes bring visitors to boost tourism and constant international connections make the emirate a global logistics centre. With future growth projected, the economy as a whole stands to gain.

“Growth within the contract logistics and freight industry has improved and seems more sustainable than in recent years as it is fuelled by stronger fundamentals,” said Stuart Bowie, the managing director of shipping and logistics firm GAC. “In years past growth was being driven by speculation within the real estate and subsequently the construction market.”

A NEW ROADMAP: Although the aviation segment is the transport sector’s biggest contributor, a flurry of investments on the ground is set to boost the efficiency and speed of road transport. The growth of traffic investments is a global phenomenon. By 2035 major urban areas around the world will be spending more than $6.5trn on their road and rail infrastructure, according to a study by US-based consulting firm Booz Allen Hamilton. Like growing urban areas elsewhere, Dubai is expected to see the number of cars on its highways rise. Car ownership in the emirate has topped 540 cars per 1000 people, and that number is set to increase. Dubai’s population will more than triple in the next decade, according to transport authorities, bringing the number of private cars in the emirate up to 1.5m.

It was primarily during the boom years of the past two decades that Dubai’s road and highway networks began to feel the pressure of increased use. During that period, a growing population and proliferating construction developments tested the limits of the emirate’s road network. Traffic congestion cost Dubai an estimated Dh4.6bn ($1.25bn) per year, Mattar Al Tayer, the CEO and executive director of RTA, told OBG in 2008. The authorities are aware of the infrastructure challenges associated with growth and have taken a multi-faceted approach to relieving pressure on the emirate’s highways. Strategies include new roads, public transit upgrades and efficiency-boosting measures.

THE CURRENT INFRASTRUCTURE: There are currently three roads serving as north-south arteries in Dubai: Sheikh Zayed Road, Emirates Road and Al Khail Road. Because of high traffic on the first two, authorities have initiated a Dh1.92bn ($523m) plan to build a series of interchanges and bridges that will allow for the free flow of traffic on Al Khail Road. Currently the highway has roundabouts at intersections. These roundabouts can cause congestion, especially during peak hours. The project partially came on-line at the end of 2012, with completion following during the first half of 2013. In addition to the upgrades on Al Khail, RTA authorities have announced a five-year plan to improve residential roads across Dubai, including the Hatta, Al Qusais and Al Quoz neighbourhoods.

“The move comes in the context of RTA efforts to improve roads… to accommodate the growing needs of the demographic and urban expansion seen by the emirate,” the RTA said in a statement issued in May 2012. The transit agency estimates that the plan’s costs will come to about Dh1bn ($272.2m). The project’s first phase is set to finish by 2016. Later phases will commence in 2013, 2014, 2015 and 2016, respectively.

Routes between Dubai and its fellow emirates have also seen a number of improvements, largely thanks to several highway investments. In May 2012 transport authorities announced the completion of upgrades on a two-lane road connecting Dubai and Al Ain in Abu Dhabi. After five years and an investment of Dh1.1bn ($299.4m), the section of the road up to the Dubai border has been widened and now fits the width of the road on the Dubai side. A new Dubai-Ras Al Khaimah (RAK) road link, meanwhile, is set to provide faster north-south motor connections, UAE federal transport authorities told local press in April 2011. The Dh600m ($163.3m) project allocates Dh350m ($95.27m) to construct the RAK Bypass and Dh250m ($68m) to extend the current Dubai Bypass.

Both Dubai and its fellow emirates stand to gain from these road upgrades. In addition to lowering transportation costs, new highways could draw commercial traffic away from urban throughways, relieving congestion in busier areas. For Dubai in particular, better connections among the emirates could make its ports more attractive for international traders.

DRIVING EFFICIENCY: Although new roads can ease congestion for the short and medium terms, building them can also encourage higher rates of vehicle ownership in the long term, as investments in highway infrastructure offer incentives to use cars. To counter this trend, the RTA is also introducing a number of incentives to encourage more motorists to use alternative modes of transportation. The major alternative is Dubai’s growing public transit system. Owned and operated by the RTA, the network includes intra- and inter-city buses, sea buses and the Dubai Metro. Construction is also ongoing for a light rail project in Al Sufouh connecting Dubai Marina to Mall of the Emirates. The RTA is aiming to increase public transit utilisation to 30% of all trips made in the emirate by 2030 (see analysis).

In July 2007 the public transit authority took another step closer to its aim of higher public transit utilisation by constructing a series of toll collection gates on Sheikh Zayed Road. The system, called Salik, utilises radio frequency identification (RFID) technology, which can electronically collect fees from motorists as they pass under gates. Since RFID toll collection does not require cars to stop or reduce speed, Salik does not create the bottlenecks typical of traditional tollbooths. Car owners, in turn, must top up prepaid accounts if they intend to use toll roads.

The primary goal of the system is to allow RTA to better guide the development of traffic flows in Dubai. Using tollgates to better reflect the cost of added cars on the road empowers the transit authority to provide more incentives for motorists to choose to use alternatives.

With the toll system now in place, transit officials are better equipped to control congestion. The funds that the system raises, meanwhile, can offer greater capital for infrastructure projects. Estimates of annual revenue in previous years have ranged from Dh600m ($163.3m) to Dh800m ($217.76m) per annum. Although collecting revenue is not the Salik’s primary motive, these funds are useful for speeding up transportation network upgrades, according to the RTA. As the emirate’s population grows, there will likely be more cars on the road and more toll fees gathered. RTA has also tested ways to raise upfront capital using the toll system. In 2011 the transit authority successfully negotiated an $800m toll securitisation deal with several local and multinational banks (see analysis).

In addition to providing incentives for motorists to avoid driving altogether, the RTA is looking into ways to increase car occupancy. In 2008 a series of RTA studies found that average car occupancy in Dubai stood at 1.6. To raise that number, the public transit agency launched Dubai’s first carpooling programme, Sharekni (which means “share the ride with me” in Arabic). The system facilitates ride-sharing using an online system to match vehicle owners with other residents who share a similar route. The number of registered users has risen from around 4500 in the fourth quarter of 2008 to 16,000 in the first quarter of 2012. The system does not permit vehicle owners to profit from the ridesharing, but they can collect contributions for petrol costs.

TRAFFIC SIGNALS: Traffic signal efficiency is another important part of keeping flows smooth. After a series of studies, RTA found that increases in signal efficiency could cut some commute times by as much as 15%. In recent years the RTA has been working to boost the number of signals integrated into its traffic control system centres, which gather data from surveillance cameras and sensors that are placed throughout the city.

In July 2012 the transit authority announced a project to add 180 signals to the intelligent traffic system. An additional 60 signals are expected to come on-line by the end of 2012, while the remainder will become operational by the end of 2013.

Although these new efficiency-boosting measures require significant upfront investments, virtually all Dubai residents stand to gain from their success. Indeed, in the long term, less gridlock could translate into less petrol consumed, more time saved and a higher quality of life for the population.

CHUGGING ALONG: The development of a much more substantial alternative to car travel is also under way on a national level. In 2009 the UAE established the Etihad Rail Company, the national entity mandated to develop the UAE’s first national railway system. “Dubai has an extensive road, port and airport network,” Hussein Hachem, the CEO of Aramex, told OBG. “However, the rail network is the missing piece. The rail network is currently under development. If developed correctly, it could help give a boost to freight transport in the region, enabling a more efficient transport of goods through an integrated system.”

Etihad Rail’s plan includes a 1200-km network connecting population and industrial centres across the emirates. Freight will be the first priority, followed by passenger services. Ultimately, the system is set to link up with the GCC rail project, giving logistics companies a cheaper, faster transport alternative. Progress on the Dh40bn ($10.1bn) system has been reasonably brisk.

The first phase, connecting Abu Dhabi’s Habshan gas processing facilities to the coastal city of Ruwais, is scheduled for completion in 2013. On July 29, 2012, Etihad Rail announced invitations to tender for the second stage, covering lines between Ruwais and Ghweifat, Liwa Junction and Al Ain. In subsequent years, extensions to the Shah gas facilities and the transport centre at Dubai’s Jebel Ali Port are also scheduled to become fully operational.

The addition of a train terminal at Jebel Ali could also mean significant logistics savings for companies operating there. The project started gaining momentum in May 2012, when Etihad Rail signed a memorandum of understanding with Dubai Ports World to build and operate an intermodal terminal at Dubai’s largest port.

Currently, scores of lorries at Jebel Ali handle incoming cargo, moving between the port and final destinations. The authorities are working to create an inter-modal transport terminal with a 5m-container capacity by 2030. The move could help to drastically cut travel costs, while also easing congestion on highways and reducing overall emissions.

LOGISTICS: As Dubai’s ground, sea and air transport infrastructures continue to grow, the emirate will likely look to an increasing number of logistics operators to move cargo between various modes of transport. Even in recent years, while other sectors have felt pressure from the global economic circumstances, the Jebel Ali Free Zone (JAFZ) has seen significant growth. Over the past four years, revenue has increased at an average of 34% y-o-y, the zone’s customer base has grown by more than 60% and its employee population has risen to 160,000, according to the free zone. The growth of DWC and the progress on the Etihad Railway, meanwhile, point to an increasingly intermodal future for the trade cluster. A master plan for DWC, being carried out by the government-backed Dubai Aviation City Corporation, envisions an intermodal trading centre in the emirate’s south-west. Called Dubai Logistics City, the project is set to connect Jebel Ali Port, JAFZ and DWC with major highways and the forthcoming Etihad Railway, affording freight operators access to land, sea and air transport all within a single area, which has the advantage of being Customs-bonded (see analysis).

OUTLOOK: Despite international economic challenges stemming from uncertainty elsewhere, Dubai’s transport sector has clocked consistent growth. Rather than concentrating their business in one country or region, logistics operators enjoy strong trade ties with a broad range of areas. The emirate’s three largest trade partners – India, China and the US – collectively account for about one-third of global GDP and more than 40% of the world’s population, according to the World Bank’s World Development Indicators.

Close ties with several major world economies help Dubai avoid over-exposure to any one country’s economic situation. By the same token, Dubai’s involvement with high-growth areas in South Asia, East Asia and growing connections to South America should help mitigate potential side-effects of Europe’s economic troubles.

At home, indications are that Dubai’s transport sector is in solid shape to face whatever the global economy has in store. With the UAE’s GDP on the up and global foreign investments tapering, logistics operators could see demand for their services continue to rise. To that end, the openings of Abu Dhabi’s Khalifa Port and Qatar’s New Doha Port are expected to raise the GCC region’s cargo processing capacity, helping to avoid a future supply squeeze. With major investments and growing trade volumes to support it, Dubai’s transport sector is set to be on steady footing in coming years.