26 December, 2006

4 Gulf states to spend $150bn on infrastructure

The UAE, Kuwait, Qatar and Bahrain, are expected to spend about $150 billion on infrastructure over the next three years, according to Merrill Lynch.

Merrill Lynch said in its In its recent Global Research Highlights that infrastructure spending in emerging markets could exceed $1 trillion in the next three years. rest here
I understand that infrastructure spending is a progressive step and the wise always decide to make bold strides in such areas. But the twist for the Gulf States would be in striking the balance between, bearing the costs of such development or transferring them onto the bulk expat population. Ofcourse countries bear a lot of such costs themselves and levy taxes on the residents, but with no loyalties being extended to the expats it would be hard to have them stick around to pay for infrastructure costs. Already we are seeing the burnt of such by things like "airport expansion taxes" , road tolls, etc etc.

3 comments:

Anonymous said...

Who said anything about wanting the the UAE to be attractive to expats? if u want to say then u should pay if not u leave.

trailingspouse said...

But, Anonymous, if the expats leave, who will live here? In the UAE at least, who is all this being built for? The local population isn't large enough, and won't be for many generations, to populate a city the size of Dubai.

I'm not suggesting there shouldn't eventually be taxation here, it's inevitable. But this stock answer of "if you don't like it, leave" just doesn't make sense. The UAE HAS to be attractive to expats if it's going to work as planned.

Anonymous said...

I agree with what trailingspouse said. All these highrises being built, do you think locals will move into them? I don't think so, because a vast majority of locals consider it a shame to live in a flat. And yes all these are being built to attract FDI (Foreign Direct Investment) which means more expats.

I might be wrong but my prediction is that within the next 5 years the government will introduce taxation & to give incentives to foreigners, either they will be given permanent residency status if not the full citizenship.

Without taxation, I don't think an emirate with limited natural resources like Dubai can maintain its high standard of living for a long time. The question here is not why but how & when. Its just a matter of time.

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