When global economies united in the countdown to welcome a New Year, no one was prepared for what 2020 had in store. Over the past few months, the world has witnessed a surreal phase, as the COVID-19 made a conspicuous attempt to bring economies to a standstill.
However, the UAE did not let this hinder its advancement. COVID-19 has impacted industries regardless of how they were previously performing - reviving them has become the need of the hour. One may assume overcoming such a challenge would seem next to impossible, but we are ready to take on any thrown our way.
It is afact that about three-quarters of the world where COVID-19 impacted majorly is where a majority of migrant workers live and work. And for that reason, about 90 per cent of remittances are made by these very workers. In the wake of COVID-19, emerging markets face new challenges related to the altered dynamics.
Building human capital, developing a flexible economic structure, and providing a supportive regulatory environment for business will not happen overnight. However, it is different for the UAE, which has been able to lay sturdy foundations that enable it to seize new opportunities.
No drop off
We should take pride knowing that charges incurred by our operators are almost on par with the UN’s proposed Sustainable Development Goals (SDG) target for 2030, which is up to 3 per cent of the transaction value.
For decades, the UAE has topped the remittance sector, with India being one of the largest corridors along with Pakistan, Philippines, and Egypt. During the pandemic, we did not experience a slowdown on the remittance side of business, but the exchange side experienced a bit of a lag due to travel restrictions. But that too picked up as the UAE became one of the first countries to open its doors.
We know that at times of crisis, altruistic remittance sending behaviour strengthens - understandably s- - to support families back home. This has remained true as proved by the outward personal remittance numbers put out by the Central Bank of the UAE. In contrast to what has been recorded globally, in the first quarter of 2020, outward personal remittances increased by 7.8 per cent, while remittances through exchange houses rose 5.4 per cent compared to the same period last year.
This collective data is evidence enough of how the UAE economy has stood firm despite global adversities.
Accelerate return to form
As David Malpass, President of the World Bank stated: “It is all the more vital that we shorten the time to recovery for advanced economies.” We need to be ready for the post-COVID-19 era, with business continuity, job creation and development of a frameworConsumer mindsets.
Organizations in the UAE must adapt and further increase resilience to be more strategic. One must not forget that the financial sector plays a key role in accelerating the pace of economic recovery after COVID 19. As per stats from UBS, among GCC countries the UAE ranks first in economic diversification and 16th in global rankings for being most compatible in terms of business development.
Consumer behaviour and demands are also what keeps the business world going. COVID-19 has created quite the change in how companies communicate. Consumers are more likely to do a transaction online than before the pandemic. While flexibility has always been a cornerstone of our industry, it will now be essential for a post-COVID-19 phase. The adoption of tech-oriented solutions has helped local exchange and remittance organizations adjust to this change.
As companies shift towards a renewed tomorrow, they also need to think about what is in store. On the other side of the crisis, the world could look very different, with different expectations, regulations, and value proposals.
One cannot deny that the struggle is real, but we need to focus on re-framing our future and developing a new value economy. Humankind is designed to continually battle and succeed over any challenge thrown its way... and that is what we will strive to achieve.
- Osama Al Rahma is Vice-chairman of FERG (Foreign Exchange Remiitance Group) and CEO of Al Fardan Exchange.