New UAE weekend to attract foreign investments, bolster business, tourist appeal

Latest work system will bring the financial sector closer to the global stock markets, banks and financial institutions and, therefore, advance business and foreign trade



Photo: File
Photo: File
by

Muzaffar Rizvi

Published: Thu 9 Dec 2021, 10:50 AM

Last updated: Fri 10 Dec 2021, 9:20 AM

The new work system in the UAE aims to attract foreign investments, bolster its business and tourist appeal, and align its financial sector with international markets that will yield higher returns than the existing system in place, experts say.

Analysts and top corporate executives said the new work system would bring the UAE's financial sector closer to the global stock markets, banks, and financial institutions and advance business and foreign trade.

The new working week, which is to take effect next month, will facilitate business transactions of local banks and entrepreneurs in the global market. According to the experts, matching the working weekdays with the rest of the world enables the private sector to carry out uninterrupted business, which stimulates business growth and yields higher returns.

On Tuesday, the UAE announced that it will shift from the start of 2022 to a working week that ends on Friday afternoon, with a Saturday-Sunday weekend instead of Friday and Saturday. The change will affect state entities, while private companies will be free to choose their working week.

A meaningful move

An economist at Abu Dhabi Commercial Bank, Monica Malik, said many private sector companies in the UAE are expected to follow the Saturday-Sunday weekend.

"It is a very meaningful move in addition to other reforms introduced by the government in recent past," she said.

Atik Munshi, managing partner, FinExpertiza UAE, said most countries in the world have Saturday and Sunday as their weekend.

"With the Friday and Saturday weekend in the UAE, there is a cumulative three days off work if any entity is dealing with the western or Asian country. With the new Saturday-Sunday weekend schedule, the UAE is trying to align with the rest of the world and thus save one day," Munshi told Khaleej Times.

He said there had been a progressive thought of limiting working days to four instead of the current five. "By the four-and-half-day week, the UAE is trying to be a pioneer in such change. Though such change may benefit international business, it will take a while for the people of UAE to adjust to this change as traditionally, the Friday-Saturday weekend gels well with the local culture. The new year will bring a lifestyle change for most UAE residents due to the weekend change," he said.

In reply to a question, he said it is difficult to forecast an immediate financial impact on the economy, but definitely, the sectors which deal internationally like forex, banks, shares and multinationals will benefit from the move.

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Move to lift productivity

Shailesh Dash, a Dubai-based entrepreneur and financier, said it's the step in the right direction which almost everybody has been talking about for the last couple of years of happening.

"It helps in making UAE-based companies work more easily with the international companies who have a similar weekend policy as well as help in creating much better work-life balance," Dash told Khaleej Times on Wednesday.

"We believe it would help productivity in almost all sectors, but I believe the hospitality industry, as well as the logistics businesses, should benefit quite a bit. It would certainly help improve the work-like balance quite a bit, thereby improving the staff's productivity and economy. This has been the case with a few other countries which have adopted a similar policy," he said.

Adjustment to take time

Saad Maniar, a senior partner at Crowe, said it would contribute to the health and well-being of the people, which will result in better productivity. However, the cost of doing business will go up in the short term until people get adjusted to the shorter working week and can achieve operational efficiency. Also, a lot of planning is required to adapt to new work time, and it will take time to get adjusted, he said.

"Both government organisations and schools will benefit from the shorter working week. A four-and-half-day week will boost productivity for sure, however in the initial phase, the economy will have to learn to adapt to the new norms," Maniar told Khaleej Times.

Ata Shobeiry, chief executive at Zoom Property, said the new weekend system is a welcome change as it will align Dubai with global markets that follow a Saturday-Sunday week. "It will facilitate timely and smooth international transactions, which, in turn, will boost many sectors of the Emirate, including the real estate market, which is already gaining a lot of interest from foreign investors after the brief Covd-19 setback," he said.

Shobeiry said reduced working hours will also promote a healthy work-life balance among employees.

"They will be able to perform better and be at their productive best knowing that they have ample time to relax and socialise during the two-and-a-half-day long weekend," he said.

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A welcome for investors

Oscar Abraham, corporate counsel with a tech company, said this move could potentially have a huge impact, and the transition to the Saturday-Sunday weekend will be a welcome move for investors.

"The UAE will attract investments which will add to the robustness of the banking and financial sectors, both of which have already seen stellar growth in the past few years. In conjunction with the recent reforms in legislation affecting personal laws, this signals the UAE's intent to make itself an attractive destination from an investor perspective and for expatriates to consider as a migration destination. This influx of manpower and finances could lay the required foundations for the long-term success of the UAE," Abraham told Khaleej Times.

He said a working Friday ensures an inflow/outflow of transactions for an extra 24 hours in sync with the world's banking and financial markets. This is a massive boost for foreign investors, especially those who would like to transact ahead of the closing bell on a Friday. This would promote UAE's status as a global financial hub and cement its position as a gateway for Mena investors to access global markets and vice versa.

"The UAE can now also leverage its unique position amongst peers in the wider Middle East. A working Friday will lure investors from neighbouring countries who wish to access the markets on a Friday to consider the UAE-based banks and financial institutions as a gateway. This could potentially boost the financial services sector's reach within the wider Mena region," he said.

To a question about the major beneficiary of the new move, he said the obvious beneficiaries are the banking and financial services sectors. However, the technology sector will also see a significant boost.

"A structural change of this nature will require technology adoption to ensure the transition is smooth and not disruptive to services. An acceleration of technology adoption is likely and in line with the UAE's wider initiatives to cement its position as a pioneer in the field," Abraham concluded.

muzaffarrizvi@khaleejtimes.com


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