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Dubai - A jubilant Dubai hopes that hosting the world's five-yearly trade fair in 2020 will draw new investment to an economy still recovering from a debt crisis that required a bailout by Abu Dhabi.
The United Arab Emirates city state saw off competition from Brazil, Russia and Turkey to win the right to host Expo 2020.
It expects the prize will give a welcome boost to an already reviving tourism- and property-based economy.
The fair site extends across 438 hectares of desert - 10 times the size of Vatican City - on the highway towards the UAE capital of Abu Dhabi, along which Dubai has been pushing much of its development.
Increasing capacity
The government projects the six-month fair will stimulate about $6.8bn in additional investment and 277 000 new jobs.
It forecasts a boost to gross domestic product of more than $38bn, equivalent to around 44% of the 2012 total.
Deutsche Bank said Dubai needs about $43bn to upgrade its infrastructure, the bulk of which would go into expanding hotels and other leisure facilities, with around $10bn more for transport infrastructure.
"The successful Expo bid should act as a catalyst to wider investment growth in Dubai, largely aimed at increasing the capacity of the economy," said Monica Malik, chief economist at EFG Hermes Emirates investment bank.
Although much of the investment earmarked for the fair was already part of a master development plan, Vision 2020, the win "will add to Dubai's confidence and fast track implementation," she said.
Barclays Bank too expected the fair to boost growth, to average 6.4% annually over the next three years and potentially 10.5% annually to 2020.
The economy is recovering strongly from the financial crisis that led to a 2.4% contraction in 2009, as the emirate's once-booming property sector tumbled and government-linked companies struggled under a mountain of debt.
Dubai sent jitters across global markets in November 2009, when it said it needed to freeze payments on about $26bn owed by its largest group, Dubai World.
Peak value
The conglomerate succeeded in reaching an agreement with lenders to restructure its obligations, but debt of about $103bn continues to burden the government and state-linked firms, Barclays says.
Dubai's economy, which unlike all other Gulf states has no oil revenues to depend on, grew 2.8% in 2010, 3.7% in 2011 and 4.4% in 2012, as its core sectors recovered.
The once-battered property market, which shed more than half of its peak value following the 2008 crisis, has bounced into recovery over the past year and rents have also surged.
Property prices have risen by around 50% since the third quarter of 2011, but are still 45% below the peak of 2008, Deutsche Bank said.
