Dubai makes a fast economic rebound supported by robust policies

Babu Das Augustine, Business Editor

Dubai’s economy has been witnessing a rapid rebound from the impact of COVID-19, thanks to the effective preventive health care measures and robust economic policies, Sami Al Qamzi, Director-General of Dubai Economy told Gulf News in an interview.

Since the onset of the COVID-19 pandemic, Dubai had responded with swift and efficient healthcare measures and economic support initiatives that protected lives and livelihoods. This has enabled the emirate to simultaneously contain the spread of the COVID-19 virus and its impact on the economy and paved the way for a quick recovery.

“When the pandemic started spreading in the region, Dubai realised from the beginning how important it is to maintain people’s health as well as maintaining and keeping a healthy business going on. It is no surprise that Dubai achieved this objective,” said Al Qamzi.

The comprehensive preventive and support measures were implemented following the directives of the leadership. Dubai Economy worked closely with the Crisis Management Committee and other government entities to set up the health prevention measures in business sectors, as well as enhance and enforce these measures on the ground.

Dubai Economy conducted 170,000 safety precaution inspection visits that helped to manage the spread of the COVID-19 virus since it was first reported end of February 2020. Once the immediate threat to public health was addressed through a host of preventive measures that brought the spread of infections under control, the focus was turned to the revival of businesses that were affected by the pandemic. This approach enabled a faster return to normal life and the resumption of economic activity in record time.

“Dubai Economy coordinated with the shopping malls and major stores to implement the gradual opening, by delivering the necessary information and criteria from various agencies to the business owners, to help them navigate the crisis smoothly,” said Al Qamzi.

While supporting businesses to tide over the crisis, Dubai Economy also took broader measures to help the larger community of consumers. The authorities took effective measures to control the wave of price hikes that happened during the first wave of the virus and stabilized it in a short period of time.

Opportunities in crisis

In the early days of the outbreak, with global supply chains rupturing and lockdowns rampant across the world, Dubai too was staring at a full-blown crisis with businesses coming to a standstill. However, quick policy response measures have seen COVID-19 emerging as an opportunity for Dubai to test its digital transformation agenda during a real-life crisis.

“We managed to work remotely and deliver all our services with a high satisfaction rate. We made the process of registering new companies easy and fast, which reflected the increase in the numbers of issued and renewed licences,” said Al Qamzi.

Facing the crisis, Dubai leadership’s directives were focused on ensuring that the short-term impact of the COVID-19 pandemic does not translate into a long-term economic hardship that would inflict lasting damage on people and businesses by way of job losses and bankruptcies.

“When you have inspiring leadership with great vision, and a strong and agile institution, supported with the full engagement and cooperation of the private sector and the entire population, then making the post-pandemic economic recovery will be faster and achievable,” Al Qamzi said.

Attracting FDI

Al Qamzi expects the way Dubai managed the crisis will positively impact businesses, especially attracting the Foreign Direct Investment (FDI). The latest FDI data stands testimony to it.

Dubai pulled in 455 FDI projects worth Dh 24.7 billion in 2020, exceeding the annual average of 441 projects over the past five years, according to the “Dubai FDI Monitor” data issued by the Dubai Investment Development Agency (Dubai FDI), an agency of the Department of Economic Development (DED).

In terms of attracting greenfield FDI capital, Dubai ranked first in the Middle East and North Africa (MENA) region and fourth globally in 2020, according to the Financial Times’ fDi Markets, the leading global source of data on greenfield FDI. Dubai also achieved a record global market share in greenfield FDI projects, attracting 2.1% of all such projects in 2020, exceeding the 2% mark for the first time.

According to Al Qamzi, the strong FDI flows reaffirm the sustained growth of Dubai economy, and the diversity, competitiveness, and attractiveness of the emirate.

Economic outlook

Ever since the COVID-19 crisis began, the Government of Dubai announced five tranches of economic stimulus packages totaling Dh7.1 billion with the objective of mitigating the impact of confinement measures in the Emirate on the demand side, covering consumption, investment, trade and travel, as well as on the supply side including the workforce, supply chains and the cost of doing business.

The initiative helped offset the shock and repercussions in the form of job losses or disruptions to businesses. According to a recent study by Dubai Economy, Dubai’s stimulus packages contributed to reducing the economic impact of the crisis by limiting the expected economic contraction to -6.2 per cent in 2020, a decline that is in line with the growth outlook of countries around the globe as reported by the International Monetary Fund.

The precautionary and preventive measures adopted to contain the COVID-19 pandemic in Dubai, along with travel restrictions around the world, had a severe impact on hotels and restaurants, which are expected to see a contraction of -20 per cent in 2020. Also affected were the transport and storage sector (-11 per cent), and the retail and wholesale trade sector (-9 per cent).

The Government of Dubai and its Future Foresight project have laid strong foundations for a rapid recovery. The support measures launched during the pandemic were designed to contribute substantially to the ongoing economic recovery efforts.

“These efforts include investment in healthcare and food security that will not only reduce the likelihood of future shocks, but also contribute to enhancing the Emirate's resilience against such shocks.” Al Qamzi said.