The extent of Dubai’s post-pandemic rebound was on display late last month. On the same day that Africa’s richest man unveiled plans to set up his family office, Santander Group became the latest firm to bolster its wealth offering in the emirate.
But while an influx of expatriates chasing high-paying jobs is boosting the Middle Eastern business hub’s nearly $115 billion economy, it’s also exposing the limitations of Dubai’s infrastructure. The city is home to 3.8 million now, and that’s expected to surge to 5.8 million by 2040.
That would bring Dubai’s population closer to Singapore’s and mark a turnaround from the pandemic years. Since 2020, about 400,000 people have arrived, drawn by low taxes, safety and proximity to major markets.
The growth has stoked the economy, and that’s helped propel Dubai’s benchmark index into the ranks of the best global performers this year, led by state-backed Emirates NBD Bank PJSC, toll operator Salik and Dubai Electricity & Water Authority.
But it’s come at a cost.
The glut of traders, lawyers and bankers willing to fork out premium prices is pushing up property values and rents, while intensifying competition for school admissions. Public transport is limited and roads are routinely jammed — though Dubai still fares better than London, New York and Riyadh on time lost per year in rush hour traffic, according to data from TomTom.
Monica Malik, chief economist at Abu Dhabi Commercial Bank PJSC, sees the pace of growth continuing through this decade. “The lifestyle, ease of doing business and the personal income tax environment are all factors supporting this ongoing expansion,” she said. “We expect to see significant investment to support the livability.”
Dubai has ambitions to be a top three city globally by standard of living, according to a spokesperson for the Dubai Media Office. Its 2040 urban master plan aims to make the city more sustainable, while Social Agenda 33, launched in this year, focuses on enhancing education, healthcare, and social services. Among the emirate’s projects are a $5 billion expansion of the metro and an $8.2 billion drainage network, after extreme rains in April flooded highways, homes and businesses.
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