The business continuity plan is in order
While the reopening of businesses has put everybody in a good mood, there is no doubt that Covid-19 has scarred the economic momentum. But with the UAE rolling out incentives for recovery under the directives of the Rulers, it is no doubt that the country will bounce back to the pre-Covid era.
With the announcement of 100 per cent reopening of the public sector this week and most of the private sector working to a full capacity for two weeks now, the Dubai government has simultaneously issues guidelines to ensure workplace health and safety and support to employee needs. However, in Abu Dhabi the movement is still limited to an extent that was brought into effect on June 2 but the capital city has issues guideline for businesses that are reopening to ensure that employees remain safe, in line with preventative measures imposed by the Abu Dhabi Emergency and Crisis Committee.
In Dubai, the economic stimulus package was launched in March under the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, and Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, the Dubai government launched a Dh1.5 billion economic stimulus package to enhance liquidity and reduce the impact of the current global economic situation caused by the Covid-19 coronavirus outbreak, the package developed by the Dubai Government includes 15 initiatives focused on the commercial sector, retail, external trade, tourism and the energy sector.
In line with the directives of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces, and Chairman of the Abu Dhabi Executive Council, the Council launched a dynamic economic stimulus package to support economic activity, reduce the costs of living, facilitate business in the emirate and protect the UAE's economic stability.
The 16 initiatives include allocating Dh5 billion to subsidise water and electricity; all industrial activities are exempted from Tawtheeq fees this year while Dh3 billion has been allocated to the SME credit guarantee scheme managed by the Abu Dhabi Investment Office to stimulate financing by local banks and enhance SMEs' ability to navigate the current market environment.
Commercial and business sector
Abu Dhabi launched an initiative to hasten the issuance of business licences in an effort to boost economic activity and improve the emirate's ranking on the ease of doing business index.
The emirate's Department of Economic Development (DED) said the new e-contract and e-signature system will make the process of obtaining a licence for one-person and limited liability companies much simpler.
As Dubai's commercial and business entities open to a full strength, in May the emirate's non-oil sector saw the highest economic rise in the last three months. The IHS Markit Dubai Purchasing Managers' Index increased to 46 in May from 41.7 in April but was still below the 50.0 mark that separates growth from contraction.
"While the Dubai PMI ticked up from the record low suffered in April, the latest survey data suggested economic conditions remain a long way from recovery in May," said David Owen, economist at IHS Markit. The reading was the highest recorded since February.
Businesses attributed the softer pace of decline in both output and new business to the relaxation of movement restrictions.
Dubai saw the value of its external trade reach Dh323 billion in the first quarter of 2020 despite headwinds from a slowdown in global economic growth due to the coronavirus pandemic. Exports grew two per cent year-on-year to Dh43bn while imports touched Dh189bn, Dubai Media office announced recently. Re-exports totalled Dh92bn during the period.
"Dubai has demonstrated its economic resilience amidst the global Covid-19 crisis," said Sheikh Hamdan.
"Though the pandemic has impacted markets around the world, Dubai's external trade has been able to maintain its momentum thanks to the diversity of its markets and its ability to adapt to global changes, trends and needs," Sheikh Hamdan added.
In terms of volumes, the emirate's external non-oil trade amounted to 24 million tonnes, Dubai Media Office said without specifying the trade value. Imports accounted for 16 million tonnes, exports totalled 4.2 million tonnes and re-exports volumes stood at 3.6 million tonnes during the quarter.
Meanwhile, Abu Dhabi's external foodstuff trade amounted to over Dh4.6 billion during the first quarter of the current year 2020, while the overall weight of the emirate's foodstuff trade in the same period reached more than 1.18 million tonnes through 41,430 transactions. Abu Dhabi's foreign trade distributed from foodstuff to imports at a value of over Dh2.48 billion, exports of Dh1.7 billion and re-exports of more than Dh882 million, according to Abu Dhabi Customs.
Earlier this month, the DED in Abu Dhabi introduced a new initiative encouraging SMEs to promote locally made products, particularly healthcare supplies that could help reduce the spread of the Covid-19 pandemic.
It also called on local and federal government entities to buy locally produced supplies to boost economic activity. Under the new e-contract and e-signature system, an applicant can obtain a certified Memorandum of Association through the department's Abu Dhabi Business Centre website.
In an aim to benefit the local commerce, the stimulus called for the cancellation of the 25 per cent down payment required for requesting installment-based payment of government fees for obtaining and renewing licenses. The move looked at reducing the financial burden on SMEs.
In May, Dubai Chamber declared that it processed a total of 152,059 electronic transactions between March and May of this year, at a rate of 50,000 transactions per month. The latest figures reflected the broader trend of businesses in Dubai accessing government services online amid movement restrictions brought forth in response to the coronavirus pandemic.
With a 7.5 per cent uptick in e-transactions recorded in May, compared to the previous month, despite Eid Al-Fitr holidays, the trend signalled at an increased awareness in the private sector of the importance of e-services and smart transformation in driving business activity.
The Department of Culture and Tourism - Abu Dhabi (DCT Abu Dhabi) has announced the launch of a safe and clean certification programme - a first of its kind in the region, and one which seeks to uplift and standardise the cleanliness and hygiene levels across all organisations in the tourism sector. DCT Abu Dhabi aims to safeguard the health and well-being of consumers by offering certifications that ensure the compliance of standardised hygiene levels in tourism destinations and industry businesses within the emirate.
As Dubai reopens tourist hotspots, holiday homes and hotels partly, social distancing and hands-free services could be the new normal. This however has not deterred tourists from eyeing Dubai as their top five spots for their next holiday after flights resume, according to Helal Saeed Almarri, director-general of Dubai Tourism.
"As we look ahead to a gradual reopening of tourism, we will focus on the key elements that have ensured the industry's success over the past decade - creating unique value and delivering an uncompromised guest experience," said Almarri.
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