Economic Recovery Committee announces completion of 46pc of first phase of flexible package to support economic recovery

Economic Recovery Committee announces completion of 46pc of first phase of flexible package to support economic recovery

ABU DHABI, 12th December 2020 (WAM) - The committee responsible for the coordination and follow up of the implementation of the economic recovery plan held its second meeting today, under the chairmanship of Abdulla Bin Touq Al Marri, Minister of Economy.

Other members are: Nasser bin Thani Al Hamli, Minister of Human Resources and Emiratisation; Dr. Ahmad Belhoul Al Falasi, Minister of State for Entrepreneurship and SMEs; Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade; Sarah bint Yousif Al Amiri, Minister of State for Advanced Technology; Omar bin Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications; Abdulla Mohammed Al Basti, Secretary General of the Dubai Executive Council;SaifHadef Al Shamsi, Deputy Governor of the Central Bank of the UAE; and Dr. Mohamed Rashed Al Hameli, Secretary General of the Abu Dhabi Executive Council; with the participation of Ahmed bin Lahej Al Falasi,Director General of the Federal Customs Authority.

The committee reviewed the progress in implementing the 15 initiatives of the first phase, revealing that 46 per cent of their implementation has been completed so far. Major initiatives have been implemented to date, including amendments to the bankruptcy law, allocation of grants and incentives to tourism establishments, promotion of foreign direct investment (FDI) through amendments to the commercial companies law, amendments to the commercial transactions law and the decriminalization of cheques without balance, reduction of fees and taxes on the tourism sector, enhancing flexibility of labor market, the comprehensive targeted economic support plan directed by the Central Bank to enhance liquidity in the financial and banking sector in the country.

The committee was briefed on the efforts of the concerned authorities in coordinating and following up the implementation of the initiatives of this stage and enhancing their outputs. Therefore, they are keen to measure their impact in order to ensure the desired immediate support for various economic sectors and contribute to accelerating the pace of the national economy’s recovery.

The committee focused on the accomplishments under each of the six tracks of the initiatives package, which include empowerment of the new economy and development of priority sectors; opening of new markets locally and internationally; provision of financing support and facilitation of lending; tourism promotion; attraction and retention of talent; and stimulation of innovation.

The UAE Central Bank estimates an expected growth of 3.6% in the country's non-oil GDP by the end of 2021.The committee underlined the importance of further enhancing the confidence of investors and business owners in the country’s markets and increasing the competitiveness of vital economic sectors. It noted that the initiatives implemented during the past weeks, including the amendments to the Commercial Transactions Law regarding the decriminalization of cheques without balance, amendments to the bankruptcy law as well as to the Commercial Companies Law, represent important and major steps towards the achievement of this development goal, and serve as key enablers for the country’s economic advancement.

Bin Touq Al Marri said: "Thanks to the unlimited support and visionary guidance of our wise leadership, the UAE has made new and important strides in supporting the national economy and accelerating the pace of recovery of various vital sectors from the impact of the COVID-19 pandemic. The total value of economic support packages and initiatives provided by the federal and local governments since the onset of the pandemic has reached more than AED 388 billion. These measures have contributed to business continuity, increased momentum of commercial activities, and have strengthened their ability to grow and compete in various vital sectors.

Bin Touq added: "The wise leadership has affirmed that protecting, supporting and further developing the economy according to a sustainable model is a priority within the strategy and plans of the UAE government. We are continuing our efforts to complete the implementation of initiatives of the recovery plan according to the approved schedule. The overall completion rate of the initiatives under the first phase is estimated today at more than 46 per cent. Our efforts will continue with the concerned partners during the coming period to complete the implementation according to the timeframe specified for each stage. "

He praised the tireless efforts of the committee and the member authorities in following up the implementation’s progress according to the specified mechanisms. He also praised the efforts of the work teams concerned with the supervision of each initiative and making necessary modifications to ensure the flexibility of the initiatives; aligning them based on the needs and requirements of the business sectors; and ensuring their safe access in the post-COVID phase with strong economic elements in parallel to launching a long-term, sustainable development path for the national economy.

Nasser bin Thani Al Hameli, Minister of Human Resource and Emiratization confirmed that the establishment of the committee for coordinating and following up on the economic recovery plan’s implementation reflects the vision of the UAE’s wise leadership. He mentioned that the functioning of the committee highlights the UAE government’s immediate and proactive response to the challenges presented by the COVID-19 pandemic, according to a work system based on the integration of the roles and partnerships among various entities. This has greatly contributed to mitigating the impact of the pandemic on the UAE’s labour market, which has been affected like any other global labour market.

He said that support packages have been provided to ensure the continuity of businesses and to maintain the interests of investors, as well as to retain the existing workforce in the country’s vital sectors. These measures will therefore accelerate the growth of these sectors and will enable employers to benefit from the expertise and competencies in the labor market, in addition to enhancing family stability by tapping into the potential of those who are under family sponsorship.

In this regard, he pointed out the implementation of two parallel tracks. The first one is the reduction of operational cost of facilities to accommodate domestic foreign workers through cutting down the fees for the issuance of transfer permits of domestic foreign workers; cancellation of fees for services to start doing business in the labour market; and reduction of fees for all work permit services for small enterprises that represent 65 per cent of the current market. As they are the most affected by the pandemic, the reduction percentage for these establishments reached about 75 per cent, while the percentage of reduction in work permits for medium and large establishments reached more than 25 per cent.

He confirmed that the other track is the facilitation of labour transfer procedures and enhancing the flexibility of the labour market by allowing establishments to reveal employment data and foreign surplus labour through the ‘Virtual Labor Market.’ He said that this move addresses the labour market needs of existing talents in the UAE and allows private sector establishments to issue transfer permits for labour, now that all their restrictions have been lifted according to specific regulations.

Al Hameli explained that within the framework of the support packages provided to employers, procedures for returning the bank guarantee for private sector establishments have been facilitated. These establishments have been refunded more than AED 5 billion in 2020, after the esteemed UAE Cabinet approved labour insurance system to replace bank guarantee for employees.

Dr. Ahmed Belhoul Al Falasi, Minister of State for Entrepreneurship and SMEs, explained that the committee is a framework for the realization of the wise leadership’s vision and the national ambitions to support the economy and accelerate the pace of recovery across various vital sectors, especially SMEs. He further highlighted the importance of concerted efforts among the committee’s member bodies to ensure the effectiveness of programs and initiatives to restore momentum to business activities as soon as possible.

He added: ‘The committee responsible for the coordination and follow up of the implementation of the economic plan for recovery was able to make great strides in implementing the programs and initiatives of the first phase. It played a pivotal role in enabling businesses and SMEs to continue their operations. The tracks that are being currently worked on include provision of liquidity to support businesses and facilitation of lending to drive sustainable SME growth, and initiatives to support sales and commercial success for entrepreneurs. Initiatives have also been implemented to support the tourism sector as an engine for economic recovery and sustainable growth, as grants and incentives have been provided to tourism establishments that are committed to health and safety standards and support the continuity of their business, be it hotels, restaurants or other tourism facilities. Besides, a large number of fees and taxes related to the tourism sector have been eliminated to accelerate the revitalization of tourism in the country."

He also praised the pioneering and effective role of the local tourism authorities and departments in all the emirates in supporting the efforts of the Ministry of Economy to encourage and revitalize the tourism sector.

Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, reiterated that the Committee will continue its supervisory and coordination role to facilitate the implementation of government support programs aimed at making the UAE one of the fastest recovering countries from the adverse impact of the Covid-19 pandemic. He noted that the high rate of progress to complete the first phase of the initiatives is a result of the relentless efforts of the respective working groups and the close cooperation between all the committee members.

He added: "The subsidy plan aims to increase the flexibility of economic activities, attract global talents, further strengthen the capabilities of Emirati professionals in cooperation with the Ministry of Human Resources and Emiratization, improve the level of confidence to the local business environment, and support the presence of our exports in global markets to enable them to reach new markets. The In-country value program is one of the important initiatives that support national products and increase its competitiveness in global markets.

The developments in terms of legislation that support the economy is also equally important, especially with the recent amendments to the Commercial Companies Law and the wide liberalization of commercial and investment activities available to foreign investors, allowing them 100 per cent ownership of projects and companies, in addition to abolishing the need for requiring a citizen partner as well as the citizen services agent for branches of foreign companies. These new laws aim to increase the transparency and flexibility for businesses and facilitate the procedures, thereby adds value to the ease of doing business and enhances the local investment environment, better positioning the country’s leadership and global competitiveness. We will continue to review the impact of the initiatives on economic activities in cooperation and coordination with various stakeholders to ensure that the packages deliver our desired outcomes."

Sarah bint Yousef Al Amiri, Minister of State for Advanced Technology, confirmed that the wise leadership’s directives to establish a distinctive approach that employ the cooperation and joint action among stakeholders further strengthens the UAE's position as one of the best countries in the world whose economy has been fast recovering from the repercussions of the coronavirus pandemic. She said: "The continuous support provided by the leadership establishes a system which taps on the concerted efforts of various entities to achieve economic development that is based on a flexible, sustainable and long-term model.’ She further explained that the initiatives of the economic package which include proactive decisions and activities have contributed to effectively expedite the recovery of the country’s industrial sector, with the support and contribution of the Ministry of Industry and Advanced Technology to ensure the best means to implement the initiatives and optimize capabilities that would enhance the industrial sector and raise the level of its global competitiveness.

Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications, commented that the UAE’s leadership and forward-looking vision which focuses on developing digital and technological infrastructure have made the UAE one of the world's most capable and prepared countries to face economic challenges, noting that it further strengthened the government's readiness and ability to quickly recover from the impacts of the coronavirus pandemic.

"The UAE’s initiatives to support vital economic sectors, including stimulus packages, have contributed to boosting the positive perception about the country’s economic stability, further cementing its leading position in terms of exploring new markets and opportunities locally and globally. It also showed the country’s capability to keep its targets to achieve sustainable economic development in the long term by empowering government and private economic stakeholders through various financing support, enabling SMEs, entrepreneurs and manufacturers secure loans faster," stated Al Olama.

He added: "The UAE government’s commitment to adopt advanced technologies, support national talents, and attract professionals and experts further enhance the country’s global competitiveness in strategic and future sectors. Undoubtedly, the economic recovery plan’s focus on digital economy reinforces the country’s transformation towards a ‘new economy’. In this respect, there is a growing need to continue our efforts to create an environment that stimulates business practices, as well as support the economic sectors in the short-term, medium-term and long-term."

Abdullah Mohammed Al Basti, Secretary General, the Executive Council of Dubai, commended the wise leadership’s unlimited support to open a new phase for the national economy that is more sustainable and flexible in addressing various challenges. Al Basti also welcomed the efforts of the Committee on Coordination and Follow-up on the Implementation of the Economic Recovery Plan presided by the Minister of Economy. He highlighted the Committee’s vital role in ensuring the implementation of the economic recovery programs and initiatives in accordance with specific timelines, especially the development of policies that increase the resilience and readiness of the various sectors to the new economic era, while achieving significant growth in line with the national economic agenda.

Al Basti noted: "We are working to help achieve our wise leadership’s vision for our economy, while building on the milestones we have achieved in sustainable development. The first steps of the Committee’s programs focused on stimulating the economy through several initiatives. This had positive impact on the efforts to expedite recovery in priority sectors, thereby ensuring continuity of business and supply chains the across the sectors affected by COVID-19 and reduced the pandemic’s economic impact."

Younis Haji Al-Khoori, Undersecretary of the Ministry of Finance emphasized the importance of the efforts made by the committee to enhance the competitiveness of the various economic sectors and ensure their financial stability. This has contributed to the national efforts to accelerate the pace of economic recovery and promote a stable, sustainable, and attractive business environment for investors. His Excellency also appreciated the proactive measures taken by the Ministry of Finance to support Emirati entrepreneurs and owners of SMEs in the country, helping them through developing policies and implementing initiatives that improve the sector’s performance. He noted that one of the ambitious initiatives launched by the Ministry through the committee was allocating 20 per cent of purchases in federal agencies to SMEs based on a new government procurement platform.

He said: "Developing the legislative and legal framework for businesses is a key pillar of the country's strategy for the next 50 years. The amendment of the bankruptcy law was one of the steps that the Ministry of Finance has worked on to enhance investor confidence in the local economy. This is in line with the objectives of the Committee to enable and advance comprehensive and sustainable development in the UAE. The new amendment formed part of the necessary frameworks to secure the necessary financial liquidity for companies and commercial establishments at present to facilitate their recovery and enhance their ability to overcome difficulties, further enhancing the country’s leading position as a global economic, financial, and commercial center."

In this regard, Saif Hadef Al-Shamsi, Deputy Governor at Central Bank of UAE, said: "The Central Bank has been working in cooperation with our partners at the Committee on Coordination and Follow-up on the Implementation of the Economic Recovery Plan and Development. We have successfully implemented the Central Bank's comprehensive targeted economic support plan that helped the financial sector manage its liquidity and supported individual customers and companies affected by the repercussions of the Covid-19 pandemic."

More than 310,000 individual clients, nearly 10,000 small and medium enterprises, and more than 1,500 private sector companies have benefited from the loan deferral program included in the support plan. The domestic credit growth during the year until the end of October grew by 2.6 per cent.

Al Shamsi added: "The Central Bank maintains its role in following up the measures taken by extending the implementation period of the main elements of the targeted Comprehensive Economic Support Scheme package for an additional six months until the end of June 2021. From January 1, 2021, banks and financing companies benefiting from the zero-cost central bank facilities will be able to grant new loans and facilities to their clients economically affected by the epidemic."

Dr. Mohammad Rashid Ahmad Al Hameli, Secretary-General of Abu Dhabi Executive Council, underlined the importance of the committee’s role in implementing the economic plan for recovery and growth. It also aims to stabilize the performance of activities in various economic sectors, and implement initiatives that reflect the needs of the market and meet the aspirations of the business community at the federal and local levels, in order to improve economic performance, and move forward to the future, he explained.

He added: "In this context, the ‘go safe’ certification program, the first of its kind in the region, has achieved positive results that have reflected on the performance of the tourism sector in the Emirate of Abu Dhabi, affirming Abu Dhabi's readiness to receive hotel guests in a healthy environment that follows the highest standards of prevention and hygiene. According to the statistics of the Department of Culture and Tourism in Abu Dhabi, the capital recorded the highest rates of hotel occupancy during the third quarter of 2020 and the third highest revenue per hotel room in the region. Hotel revenues increased by 46 per cent during Q3 2020 compared to Q2, supported by a 95 per cent growth in the total number of guests. "

He added that more than 8,000 establishments operating in entertainment, tourism and restaurant activities have benefited from the initiative that recovers 20 per cent of the rental value in Abu Dhabi. The initiative has recently been expanded to include nurseries, dental clinics, and beauty centers and salons. Abu Dhabi has also provided various forms of support to drive recovery in various sectors, including the decision to abolish all tourism and municipal fees for the tourism and entertainment sectors for the year 2020, which eased financial burdens on those activities.

Ahmed bin Lahej Al Falasi, Director General of the Federal Customs Authority stated that the economic recovery plan adopted by the Committee reflects the wise leadership's commitment to achieve global leadership in recovering from the coronavirus pandemic and its excellence in addressing its economic impact and developing safely into the future to achieve the objectives and principles of the UAE Vision 2021 and the UAE Centennial 2071.

He further reiterated that the customs sector plays an effective role in implementing flexible package initiatives to facilitate trade, encourage intra-trade exchanges of the UAE with other countries, and support UAE’s exports industry. In this regard, H.E. mentioned that the customs sector employs an integrated system which simplify procedures, reduce customs clearance times, use advanced and smart equipment and technologies for inspection of trucks and shipments, standardizes and reduces customs service fees, develops work procedures at customs ports, provides smart services, and removes restrictions and burdens on the movement of trade.

It is worth mentioning that the Cabinet led by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, approved on August 3, 2020 the launch of the economic recovery initiatives, including the creation of a committee that coordinates and follows up the implementation of the economic plan for recovery, work through the plan’s outputs to increase growth rates, create a stimulating environment for doing business, and provide new opportunities through developing emerging sectors and employing technology.

The recovery plan also aims to attract and encourage investment in new sectors and enhances the sustainability and resilience of the national economy to serve the future visions of the country, The second meeting of the committee aims to follow up on the implementation of the decisions made during the first meeting and assess the progress in the implementation of the programs and initiatives, all aimed at supporting the national economy and accelerating the recovery of sectors within the framework of the flexible package and the general plan.