Thursday, October 2, 2014

The global financial crisis of 2008 not only hit business and real estate sector of Dubai, UAE but also hit harder wealthy elites of the country than its global mates.  A significant drop observed in number of millionaires in the UAE.  The number is reduced to 8 percent during the year of 2007 and 2012, the huge decrease is much greater than the world average decline.

Later with onset of economic recovery and stability in 2013, UAE managed to improve its position on the global listings like Boston Consulting Group and WealthInsights for possessing highest density of millionaires. Recent surveys revealed that the number in the United Arab Emirates is continuously escalating and expected to cross pre-financial crisis level this year. 

Financial Times also cited WealthInsight report that with 13.5 percent growth the number of UAE millionaires increased to 54,600 by the end of 2013. Furthermore, the report also predicted that UAE will show further increase in the density for millionaires in the emirate with an expected jump of 34% to 69,000, with 48% increase in their wealth costing $269bn. And the multimillionaires holding assets costing more than $30m is to grow 43 percent to 893.

The research reports also revealed that 59 percent of the country rich people live in Dubai, 26 percent in Abu Dhabi and only 3 percent in Sharjah. Most of the multimillionaires in Abu Dhabi are belong to oil and gas companies whereas wealthy individuals are associated with different sectors like finance, transport and real estate in Dubai. Besides this, 11 percent of Emirati millionaires live abroad contributing 35 percent share in country wealth. The total wealth which is held abroad costs ($63bn) which is also predicted to increase 32 percent to $85bn by 2017. Most of the UAE millionaires are nationals. Although, UAE has unusual mix of expatriates, expats are commonly the low paid workers.

Consultancies working and making such reports include cash, sukuk, account deposits, bonds and mutual funds to indicate wealth whereas property, private equity, consumer goods like cars and commodities are excluded while indicating wealth. Growing trends to build more equities enable GCC to comeback on the map as an international wealth manager. Although, to become a successful wealth manager it is necessary adapting local preferences or conditions to invest in building long-term relationship instead of maximizing revenues for short period of time.


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