‘Good crisis management is a guaranteed investment’
Living through the Covid-19 era has taught many people how to survive these challenging times by assessing situations and adapting accordingly. Many cities around the world experienced budget constraints, economic instability and slow recovery. But amidst all this, Dubai — a city founded on trade, aviation and hospitality — has safeguarded communities’ social ecosystems, fostered solidarity and compassion, and helped businesses thrive through its smart crisis management.
This has also been echoed in a recent survey, conducted by DAMAC with real estate brokers and agents in the UAE, which found that Dubai’s security and safety, combined with its tackling of the Covid-19 pandemic, are some of the main factors attributed to a recent rise in the number of international buyers in the city’s real estate.
More than 70% of the respondents in the DAMAC survey attributed security and
safety as being the prime reason for increased interest in Dubai’s real estate by
international buyers, while more than 50% agreed that Dubai’s crisis management has played a key role in the hike.
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The 2020 Global Law and Order Report by global analytics firm Gallup ranks the UAE among the top ten countries in the world for security and personal safety. According to global crime index Numbeo, the UAE has the rare distinction of being the only country with three of its cities — Abu Dhabi, Dubai and Sharjah — ranked among the top 10 safest cities in the world. The report gives the UAE a safety index score of 84.55 and a crime index score of 15.45, which is higher up than countries like the United Kingdom and the United States, which has crime index scores between 45-48.
When looking at the global pandemic crisis, the UAE has once again shown that effective crisis management makes all the difference. Since the beginning of the Covid-19 outbreak, the UAE’s response has been exemplary and a lesson to other countries around the world in crisis management. In May, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai tweeted: “Despite the UN's estimates that global foreign direct investment flows decreased by 42% in 2020 over Covid-19, the UAE witnessed 44% growth in FDI flows in 2020, compared to 2019, to reach AED73 billion. Good Crisis management is a guaranteed investment.”
Since the beginning of the pandemic, the UAE has adopted comprehensive measures aimed at not only at combatting the pandemic but also safeguarding the economy and helping people in need. Measures taken by the government include:
The National Disinfection Programme and Safe Distancing Rules which began in mid-March 2020 was implemented soon after the World Health Organisation designated the novel coronavirus as a health crisis. The successful drive led to a drastic fall in Covid-19 cases reported in the UAE, when compared to regional cases in the GCC.
In 2021, the UAE introduced one of the most successful vaccination campaigns in the world, ensuring that any resident who wanted the vaccine could get it.
More than AED 200 billion was allocated federally and locally to support the banking and business sectors, which not only protected but also strengthened the growth of the economy. 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% in 2020.
The food security strategy saw that nobody went without food during this period.
Finally, the UAE’s humanitarian initiatives helped many less fortunate countries fight the pandemic.
Fiscal measures
The UAE government has also supported banks to encourage lending to businesses and introduced additional measures aimed at directly relieving business costs through the “Targeted Economic Support Scheme”.
This included an AED 50 billion fund, as well temporary relief from payments of principal and interest in respect of outstanding loans for all private sector companies.
Compassionate measures
Tenants struggling to pay their rent due to job loss during the Covid-19 pandemic were exempt from eviction in Dubai and Abu Dhabi.
There was also a temporary suspension of all eviction judgments related to residential and commercial facilities.
Abu Dhabi allocated AED 5 billion in water and electricity subsidies and reduced electricity connection fees for start-ups until the end of 2020.
In Dubai, there was reduction in water and electricity bills and in deposits paid for water and electricity connections by 10%.
Decisive action reaps rewards
Serving as a global model for crisis preparedness, Dubai expects to see a 4% increase in economic growth in 2021 on the back of a steady rebound in many sectors, the continued flow of local and foreign investment, and vast new opportunities that will come from Expo 2020 scheduled to be held later this year. The 100% foreign ownership law that went into effect on June 1 has also brought forth positive results with dozens of investors already on board.
The changes to the commercial companies’ law are expected to boost foreign direct investment into the UAE’s vital economic sectors and bolster entrepreneurship. This law, and others such as the 10-year visas for investors and citizenship for talented individuals, will certainly make the UAE a more investment-friendly destination. With forward-thinking leaders such as ours, we are better placed than other countries to tackle crises as they come. The UAE leadership has proven that no challenge is insurmountable.
