The United Arab Emirates will deliver a three-stage “flexible package” of measures to bolster the economy, including steps to support the labour market and encourage investment.
The proposals would provide “studied” stimulus packages that includes 33 initiatives to be implemented until the end of 202 that covers all sectors and economic activities.
It calls for a flexible plan for various activities to ensure the sustainability of key economic sectors, expand emerging sectors and create new ones, based on the leadership’s vision of the future and using the best technology available.
The new initiatives were proposed by the new Minister of Economy, Abdullah Bin Touq Al Marri, who will head a new committee that will monitor the implementation and progress of all 33 initiatives.
The UAE Cabinet approved the initiatives on August 3, 2020 in a meeting at the presidential palace.
In March, the UAE’s central bank unveiled a Dh256 billion ($70 billion) stimulus package to aid businesses amid the coronavirus pandemic.
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Measures have been taken to protect jobs and help businesses survive, including budget allocations to small and medium sized enterprises, reducing employer recruitment costs, the establishment of a virtual labour market and the automatic renewal of visas for workers.
Business conditions improved in July for the UAE’s non-oil private sector, following the easing of lockdown restrictions, according to data from the latest UAE Purchasing Manager’s Index.
The headline IHS Markit UAE PMI rose from 50.4 in June to 50.8 in July, to signal a second successive monthly improvement in business conditions.
Job gains, however, are not at pre-COVID levels as the rate of growth remained “marginal” and that the recovery was “mild” following the downturn experienced by UAE businesses as a result of the COVID-19 pandemic.
Job generation is still a challenge in the UAE, as well as Saudi Arabia and Egypt, despite a stronger pickup in non-oil private sector activity in July, according IHS Markit.
The state news agency, however, said that small- and medium-sized enterprises (SMEs) will get support in the first stage of the plan, with efforts to promote tourism. The following two stages will focus on sustainable long-term economic growth.
In June, the UAE Central Bank stated that it expects the country’s non-oil economy to contract 4.1% this year due to the pandemic.