Expo 2020 Dubai on Monday said it awarded Dh6.8 billion of contracts to small and medium-sized enterprises (SMEs) and played a significant role in promoting this vital sector of Dubai’s vibrant economy.
In a statement, Expo 2020 Dubai said it empowered SMEs to diversify economy and spur growth by exceeding a commitment made in 2016 to award at least 20 per cent of all direct and indirect spend to small businesses as the final data showed that more than 25 per cent of all contracts [in terms of value] awarded to them. The UAE-based SMEs secured contracts worth Dh1.06 billion in 2021 alone while Dh161.7 million ($44 million) in contracts were awarded to Dubai SMEs.
“Of the 3,245 suppliers awarded Expo 2020 Dubai contracts, about 66 per cent (2,150) were SMEs, with 64 per cent (1,390) of these comprising domestic SMEs, reflecting the calibre and diversity of UAE-based enterprises and supporting the UAE’s wider drive towards a thriving private sector and more resilient economy,” according to a statement issued by Expo 2020 Dubai.
“Our commitment to SMEs has been embedded into our planning since the very beginning of our World Expo journey, honouring the visionary leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to support and empower SMEs — the lifeblood of economies across the world, including the UAE, where they are an important driver of economic growth and a vital source of job creation,” Mukhtar Safi, chief financial officer and deputy CEO, Expo 2020 Dubai, said.
Analysts and market experts said SMEs in the UAE, which represent 94 per cent of total number of firms, are providing jobs for 86 per cent of private sector’s workforce, play a critical role in the country’s economic growth and diversity. They said SMEs in Dubai alone make up 95 per cent of all its businesses, producing 42 per cent employment opportunities and contributing 40 per cent of the emirate’s gross domestic product (GDP).
UK takes lead
The majority of the 760 overseas SME suppliers hailed from the United Kingdom (24 per cent), the United States (16 per cent), France (4 per cent), India (four per cent) and Australia (four per cent). Overall, suppliers from outside the UAE were sourced from 94 countries, indicative of the World Expo’s global reach and impact.
“The integration of SMEs into the delivery of what has been a truly exceptional World Expo will be an important part of Expo’s legacy for the UAE and wider region, stimulating employment, strengthening existing industries, enhancing SME competitiveness and ultimately contributing to sustainable economic growth,” Safi said.
An excellent effort
Atik Munshi, managing partner, FinExpertiza UAE, said the Dubai government’s support to local and international SME in form of reserving a fixed percentage of contracts in favour of SMEs is an excellent effort.
Expo 2020 has ‘mobilised’ its management to ensure that it provides ‘opportunity’ to the SMEs so their ‘sustainability’ improves. This is also in line with the Expo 2020 themes of Oppurtunity, Sustainibility and Mobility,” Munshi told Khaleej Times.
He said the commitment of Dubai towards upliftment of its SMEs is apparent which in turn supports employment as the SME sector is the biggest employer in UAE.
It would make a phenomenal difference if the UAE banks too allocate a reasonable percentage of its lending to SMEs which in turn could be a real boost for home grown entities, I hope the Central Bank of the UAE makes some stipulations on these lines,” Munshi said.
Long-term economic value
Saad Maniar, senior partner at Crowe, said there is no doubt the Expo have raised the profile of Dubai and that SME involved has made a business case for themselves.
“But, in order to justify the billions of dirhams that have been spent on it by the government and private sector alike, I expect there will be a long-term economic value. Ongoing investment in transport, utilities, and other infrastructure will continue to enhance economic growth in the long term, while small businesses and sustainable enterprises will also benefit from this economic growth,” Maniar told Khaleej Times.
Key Takeaways
> Strategy honours UAE goals to empower SMEs, diversify economy and spur growth
> One quarter of all contracts awarded by Expo 2020 Dubai, in value, went to SMEs
> Approximately two-thirds of SMEs awarded contracts were domestic enterprises
— muzaffarrizvi@khaleejtimes.com
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