Any changes in the corporate landscape are directly proportionate to external economic swings. To guarantee that there is a balance of power between all business entities, the government aggressively promotes both conglomerates and Small Medium Enterprises. As a result, the economic consequences immediately influence each of the seven emirates, particularly Abu Dhabi, given the population of business entities and market size.
It's safe to suppose that, as we battle the negative effects of the COVID-19 epidemic, the last three to four weeks have been difficult for everyone around the planet. It is now widely agreed that our top objective should be to flatten the infection curve in order to restrict the spread of viruses while putting less strain on national healthcare systems around the world. We will be better prepared to cope with the epidemic and care for people who are impacted if more study on the epidemiological appearance of the viruses emerges.
Dubai's Economy is Diverse
Dubai recognised the gravity of the problem early on with the government of another country and reacted proactively. It was well-coordinated, technologically advanced, and strategic in its staged operations. The government is taking all necessary steps to stop the virus from spreading and to flatten the curve.
The fundamental reason for this is because Dubai has one of the most diverse and non-oil-dependent economies in the Gulf, including industries such as entertainment, hospitality, logistics, tourism, real estate, and retail. The second reason is that the Emirate's economic activity is based on the Emirate's 80% expatriate population. If these expatriates are unable to find work, they will return to their home countries. This population decline might drastically reduce the Emirate's consumer base, which is necessary for the Emirate's economic revival. Over 150,000 Indians and 40,000 Pakistanis had either departed or applied to leave the UAE by the end of May.
The Effect on UAE Businesses
Businesses, particularly SMEs, have been badly impacted by the cancellation of events, training, conferences, local trading, and closed airspace. According to the UAE Ministry of Economy, the SME sector accounts for more than 98 percent of all businesses in the country. It accounts for 52% of the non-oil GDP. The UAE government's stimulus packages provided considerable assistance to industries in the UAE, lowering the cost of doing business by 25 to 98 percent to promote and ease enterprises in investment, development, trade, export, import, and innovation, all of which have helped to alleviate the consequences. For residents of Emirates stationed in the UAE who hold a residency visa and are unskilled as a result of COVID-19, the government agencies have also developed a central forum to apply for jobs on the Virtual Labour Market Portal. Employers were asked to post their job openings on this platform for UAE residents with ring-closed vacancies
Economic Impact in the United Arab Emirates
The UAE was one of the most economically affected as the country prepares for EXPO 2020 in October 2020, which has now been postponed to 2021. The coronavirus epidemic in the UAE is harming energy, tourism, and capital markets, in addition to the economy.
Oil is the Gulf Cooperation Council's most important export commodity, and prices fell drastically this week after OPEC and its allies failed to reach an output-cutting agreement. The virus has exacerbated a business's demand shock, which has been exacerbated by the global slump.
The strategy currently appears to be shifting away from maintaining a predetermined price level through operational savings and toward competing for market share with producers such as Canada and the United States, who are unable to extract successfully at these reduced rates.
The United Arab Emirates has long been the world's preferred travel and tourism destination. The towering towers, state-of-the-art amenities, and shopping areas have all attracted visitors from around the world. Due to a complete travel ban and aircraft cancellations, the airline industry is experiencing losses. It is a major component of the UAE economy that will be harmed, with global travel virtually certainly being severely interrupted well into Q2 2020. To prevent more losses, the Dubai authorities proposed a 1.5 billion dirham ($408 million) economic boost to increase liquidity and lessen the impact of virus lockdowns. The financial strategy includes a collection of fee refunds, reductions, and lower utility costs.
The UAE's central bank also announced a $70 billion fiscal package to assist commercial banks in providing debt relief to small and medium-sized businesses. However, many businesses still want more finance but are afraid to take on new debt due to the uncertain prognosis for recovery.
Dubai's administration, along with the rest of the country, imposed a two-month gruelling lockdown. The lockout measures enforced are said to be among the toughest in the world.
Residents of Dubai have been obliged to seek permission from the police to leave their homes.
Dubai Expo
According to Dubai Economy, government-led economic reforms and investments, improved trading partner development prospects, and preparations for hosting Expo 2020 create the foundation for increasing credit and investment in Dubai's private sector.
Expo 2020, hosted by the Dubai Department of Economic Development, will improve tourism, food and beverage, and hospitality throughout October, November, and December.
Expo 2020, hosted by the Dubai Department of Economic Development, will improve tourism, food and beverage, and hospitality throughout October, November, and December.
Their motivation and goal are to expand new export markets and goods, as well as to deal with modern sea and air networking. In comparison to the global picture, Dubai's economic growth will be driven by trade, and the economies of our key trading partners will grow as well.
Dubai's economy is already quite diverse, with contributions to GDP coming from 20 different businesses. Expo 2020 has sparked substantial investment and infrastructure growth in the emirate in order to handle the expected 20 million visitors over the course of the six-month event. It will surely have a positive impact on all of today's industries.
Dubai Economy is currently looking for new development drivers and initiatives to attract private sector investment in new creative industries and expand to regional and global markets.
How Does Abu Dhabi's Economic Growth Affect Businesses?
The UAE economy has suffered a hit as the COVID 19 pandemic approaches. Nonetheless, based on the recovery plan put in place by the UAE's authorities, it appears that the UAE will soon experience better days. This period of rapid decline is frequently followed by a period of recovery and improvement. However, in the UAE, recovery could simply be a code word for fresh prospects.
All of this is predicated on hope and careful planning, which will include:
- The re-establishment of the economy
- Assessment of available resources for conducting business
- Normalization of living conditions
- Increased consumer purchasing power/affordability
- Slow yet steady economic growth - consistent cash flows, job prospects, and trading activity continuity
Overview of Economy and Businesses in Abu Dhabi
Any changes in the corporate landscape are directly proportionate to external economic swings. To guarantee that there is a balance of power between all business entities, the government aggressively promotes both conglomerates and Small Medium Enterprises. As a result, the economic consequences immediately influence each of the seven emirates, particularly Abu Dhabi, given the population of business entities and market size.
Any changes in the corporate landscape are directly proportionate to external economic swings. To guarantee that there is a balance of power between all business entities, the government aggressively promotes both conglomerates and Small Medium Enterprises. As a result, the economic consequences immediately influence each of the seven emirates, particularly Abu Dhabi, given the population of business entities and market size.
Conclusion
The coronavirus pandemic will undoubtedly have a significant impact on industry and the economy.
Soon after, the economy began to experience a severe slump, and unemployment began to rise. The situation deteriorated when a considerable number of the country's expats began to leave. Several enterprises would have announced massive losses and insolvency. According to CNBC, 70% of businesses will close their doors in the next six months.