Dubai stimulus reinforces commitment to private sector
Dh1.5 billion package part of efforts to support businesses hit by COVID-19 disruption
Governments across the world have announced economic stimulus packages to mitigate the difficulties faced by businesses due to lockdowns following the outbreak of COVID-19.
The UAE and Dubai have been supporting businesses from the early days of the outbreak when it was apparent that the economy would face unprecedented disruption.
The federal government, local governments and the Central Bank of UAE announced in March a series of monetary and fiscal incentives to support the economy.
Dubai’s Dh1.5 billion economic stimulus package was one of the earliest government incentive programmes. The package, which sought to enhance liquidity and reduce the impact of overall slowdown, included 15 initiatives focused on the commercial sector, retail, external trade, tourism and the energy sector. Measures ranged from fee reductions and refund of 20 per cent of custom fees on imported products sold in local markets. A significant part of the package was the cancellation of the Dh50,000 bank guarantee or cash required to undertake customs clearance activity and a 90 per cent reduction on customs documentation fees.
The government, aware of the urgency of reaching out to the private sector, has instructed the relevant departments to implement the scheme with immediate effect and expedite refunds wherever applicable.
On Saturday, Dubai reinforced its commitment to the business community by announcing a new economic stimulus package of Dh1.5 billion. The total incentive package for private sector businesses from the Government of Dubai is now Dh6.3 billion.
The new incentives include a refund for half of the hotel sales value fee of 7 per cent from July to December 2020, in addition to a refund of half of the tourism dirham fee, until December. The education sector gets a significant relief following the cancellation of fines and renewal fees for private school licences.
The government, aware of the urgency of reaching out to the private sector, has instructed the relevant departments to implement the scheme with immediate effect and expedite refunds wherever applicable.
The UAE’s commitment has been visible in the massive incentive programmes ranging from Dh256 billion worth support from the central bank to the banking sector aimed at boosting liquidity and business continuity of the private sector, Government of Abu Dhabi’s Dh130 billion support package and the federal package worth about Dh17 billion.
The IMF, World Bank, Institute of International Finance and leading credit rating agencies have forecast a sharp short-term dip in the UAE’s economic growth this year, followed by a steady, gradual recovery from 2021.
That points to a strong rebound in the post-COVID-19 era, thanks to the government support, strong fundamentals, substantial financial reserves and the entrepreneurial spirit of the nation.