Since 2009, Dubai's economy has recovered steadily, driven by robust GDP growth and improved investor confidence, as evidenced by prevailing market indicators such as Credit Default Spreads, which track and price risk. Buoyed by foreign investment seeking a regional safe haven, along with the formulation of concrete steps to ensure revenue diversification through new measures of taxation and tapping the capital market, the Dubai government has continued to boost spending on infrastructure through its agencies and departments.
Dubai's ambitious strategic vision is underpinned by the need to continue making large scale investments in both social and economic infrastructure. This results in ever increasing budgetary demands both in terms of funding and financing. It is recognised both within the Dubai government and in the wider capital markets that Dubai will have to continue to evolve, innovate, and reform the manner in which these large financial commitments are funded through alternative financing structures.
Alternative financing can also serve as a catalyst and a conduit for the attainment of additional strategic imperatives such as economic diversification, foreign direct investment, encouragement of local entrepreneurship and industry, and the pursuit of sustainable economic growth that is both guarded against volatility and is not resource-intensive. In order to adhere to the targets set out by the Dubai Plan 2021 and the Dubai Industrial Strategy 2030, Dubai must deliver the infrastructure required to meet the needs of a growing population, and develop the Emirate as one of the world's leading hubs for logistics and trade. To achieve this, very large amounts of private and public financing will have to be secured.
All of the above necessitates the leveraging of local and international private sector expertise, efficiency, and innovation. To this end, the Dubai government issued Law No. 22 in 2015 (the "PPP Law") to provide a legal framework for government agencies to enter into Partnership Contracts with the private sector. The framework is now being developed further, with the issuance of an Emirate-wide PPP policy, the establishment of a PPP unit within the Department of Finance, the development of operating guidelines based on best practices across the procurement lifecycle (this series of documents), and the formulation of a uniform budgeting approach to managing PPP liabilities and managing aggregate fiscal exposure.