How Dubai will bounce back post-Covid – and why it may happen sooner than you think
The UAE could be one of the first countries to bounce back post-COVID-19 pandemic thanks to its well documented resilience and agility.
Figures from the IMF suggest that the UAE’s economy will contract 3.5% in 2020 during the pandemic, but is expected to grow 3.3% in 2021.
The UAE has already intervened with stimulus packages, preparing the economy to recover more quickly and more strongly. This is alongside a number of incentives and schemes for businesses to help retain jobs and keep businesses operating in the emirate.
While we don’t know the shape of what is to come – whether the UAE has a V-shaped recovery, a double-dip W-shaped bounce, a U-shaped recession or something else entirely – here are five reasons that many think Dubai will bounce back, perhaps sooner than first thought.
- Leadership during pandemic
- Key industries looking optimistic
- Economic stimulus packages
- Postponing Expo2020
- Building relationships through humanitarian work
Leadership during pandemic
On the health side, the UAE has built one of the world’s biggest coronavirus testing laboratories, enabling mass testing.
The UAE was also swift to implement a lockdown and travel restrictions. And there is also renewed focus on changing practises in key industries, allowing them to both continue during the pandemic and hopefully flourish afterwards.
Let’s look at those in more detail:
Key industries looking optimistic
A number of industries have remained steady during the pandemic, despite extremely difficult circumstances.
- Manufacturing: Companies that make PPE have received a boost due to the pandemic, but importantly many other companies have pivoted in order to help meet demand and find new opportunities. Dubai, already well known for its innovations in 3D printing, has used this technology to create PPE, with companies in unrelated sectors (such as fashion designers) changing tack and now producing PPE.
- Construction: Famed for its construction, Dubai hasn’t let up on this sector. Labelled as a ‘vital sector’, construction sites remained operational. In order to keep things running smoothly and coronavirus-safe, a new digital portal was opened to reduce face-to-face contact. This enabled registration and licensing service requests, approvals, and an allowance of two months to provide notarised documents (using electronic docs in the interim.) In addition to this, there were economic plans put in place that postponed employment dates and extended permits, among many other initiatives. Even some inspections were carried out using video conferencing.
- Tech: The shift to remote working has increased demand from cloud services providers. But it has also increased the need to top-level cyber security (threats are always elevated during times of crisis.). With Dubai something of a tech hub, there are numerous opportunities here for developers to contribute to what will no doubt be a new economy that emerges. Equally, it seems that these changes in how we work will likely continue post-pandemic, at least in some form, meaning that tech that makes our lives easy will continue to have a place.
- Low cost air travel: There was some good news from Wizz, the Hungarian low cost carrier with a substantial investment in Abu Dhabi, and their desire to launch an airline in the Middle East. So despite flights being grounded for much of the last few months, it may be that low-cost carriers are an important player in the slow recovery of the airline industry.
Finally, a word about hospitality. Last year, Dubai had 16.7m tourists. As we know, this has gone down to zero during these unprecedented times. But given Dubai’s popularity as a tourism destination, and the international standing of its hospitality industry, there is some growing confidence that it can return, albeit slowly and in a slightly modified form.
The UAE moved quickly to support businesses using a number of different economic responses. One of which was the AED 256bn stimulus from the Central Bank.
There were also a number of other stimulus initiatives for the commercial and business sectors.
- Freeze on the 2.5% market fees levied on all facilities operating in Dubai
- Refund of 20% on the custom fees imposed on imported products sold locally in Dubai markets
- Cancellation of AED 50,000 bank guarantee or cash required to undertake customs clearance activity
- Bank guarantee or cash paid by existing customs clearance companies will be refunded
- Fees imposed on submitting customs documents of companies will be reduced by 90%
- The requirement for providing a banking instrument while submitting customs-related grievances has been cancelled
Expo 2020 Dubai is ready to “help shape a post-pandemic world and create a better future for all.”
Since a majority vote moved the event to next year, its focus has also changed. But having such an event running from 2021 and into 2022 really puts the spotlight back on Dubai and will surely be a necessary boost to the economy.
Dubai is great at putting on a world-beating show, and this will be a great opportunity, as the world climbs out of the pandemic, to announce that Dubai isn’t just open for business, but it’s leading the way.
The event is set to run from October 2021 until March 2022 and will be the first World Expo to be held in the Middle East, Africa and South Asia (MEASA) region.
Let’s finish with the importance of building goodwill with other nations.
Not only has the UAE been the largest aid donor in the Arab world since 1970, it has also put aside recent tensions with Iran to concentrate on protecting human life, with its first delivery of medical aid arriving in Tehran in March.
In addition, the UAE has also dispatched medical aid to several other countries, including China, Greece, Italy and Pakistan.
Collaborating with other countries will be key as we emerge from the pandemic, and the relationships built during hard times will hopefully endure during better times. With Dubai’s ease of doing business and global reputation, there’s no reason it shouldn’t be at the front of the world recovery.