Post-Covid Prospects: The United Arab Emirates
Interview with H.E. Ms Mariam Alshamsi, Acting Consul General of the United Arab Emirates in Hong Kong
23 September 2021
The first case of Covid-19 in the UAE was recorded on 29 January 2020, and so the Emirates was one of the first countries in the world to see confirmed cases. Repeated lockdown measures to curb the spread of the virus, coupled with the global and regional economic recession, severely impacted the economy of the Middle East’s global business hub, and hit the tourism, logistics and retail sectors particularly hard. Fluctuations in the oil market compounded the difficulties and the GDP of the UAE tumbled by 5.9%, the first recession in more than a decade.
The UAE government took swift action to support its economy. As early as March 2020, the Central Bank of the UAE responded by providing an AED100 billion comprehensive Economic Support Scheme to support the retail and corporate customers of banks affected by Covid-19. Additional stimulus packages were offered by the Federal Government, as well as by the Emirates of Abu Dhabi and Dubai, to businesses and citizens. As part of the post-Covid economic plan, the UAE Cabinet approved a package of 33 initiatives in three phases, to provide immediate and medium to long-term supports for SMEs, tourism, industry and manufacturing and the digital sector. The Fourth Industrial Revolution and sustainable development were targeted by the long-term development strategy.
The UAE Government also organised an aggressive vaccination programme, which has become a beacon of success in terms of its rollout. Capitalising on the protection of its high vaccination rate, the UAE began to re-open the country and get the economy back on track. Further stimulus will be provided by The World Expo which will be held in Dubai, from October 2021 to March 2022, a year later than planned due to the pandemic. The IMF has projected a good recovery with 3.1% real GDP growth in 2021.
David Sit, Assistant Principal Economist (Asian and Emerging Markets) at HKTDC, had the pleasure to interview Her Excellency Ms Mariam Alshamsi, UAE’s Acting Consul General in Hong Kong, to discuss the UAE’s economic outlook, the opportunities that the Emirates offers to Hong Kong businesses in the post-Covid-19 era, and areas where Hong Kong companies can work with UAE companies to expand in the Greater Bay Area (GBA) market.
David: The UAE is one of the most successful countries in the world in terms of vaccination. Can you brief us on the UAE’s Covid-19 situation and vaccination programme, and the pandemic control strategy?
Ms Mariam: In line with our open economy, the UAE Government aims to strike a balance between pandemic control and economic activity. We believe that acquiring herd immunity through the vaccine is the best way to defeat the Covid-19 pandemic and pave the way for economic and social recovery. As of 1 September 2021, 76.45% of the total population was fully vaccinated, while 87.52% had received the first dose, the highest vaccinated proportion in the world.
Five types of vaccine, including Sinopharm, Pfizer, AstraZeneca, Sputnik V, and Moderna, are offered free of charge to residents. There are over 200 vaccination centres across the country, and the elderly and other eligible people can book appointments for home vaccination.
This dynamic vaccination programme has been effective in controlling the pandemic. The number of Covid-19 infections has fallen by 62% from January 2021 to August 2021. New infections reported in the UAE have been following a downward trend for more than two weeks since early August, and are now at 27% of the peak. To keep the pandemic at bay, we have extended the vaccination to minors and have begun to provide a booster dose for specific groups in need.
Benefiting from its considerable investment in digital infrastructure, the UAE has implemented digital health tech in controlling the pandemic. For example, the Al-Hosn mobile application is used for keeping records of tests and vaccinations, as well as facilitating contact tracing. Its colour-coded system clearly shows vaccination and PCR test status. Venues are strongly encouraged to make use of the app's "green pass protocol" for certain categories of events and activities. For example, the Abu Dhabi authorities have announced that entry to public places, such as shopping centres, restaurants, gyms, and other recreational facilities, will be allowed only for those with green status on the app.
The UAE was one of the first countries to reach out a helping hand to combat the pandemic worldwide, with many humanitarian initiatives to help curb the spread of the virus. By July 2021, the country had provided more than 2,062 tons of medical aid, ventilators, testing kits, personal protective kits and supplies to 135 countries worldwide. The UAE launched the Hope Consortium in November 2020 to help distribute more than six billion vaccine doses and dispatch small shipments to countries with limited cold-storage capacity. The consortium includes the Abu Dhabi Department of Health, Etihad Cargo, Abu Dhabi Ports Group, Rafed and SkyCell. By July 2021, Hope Consortium had already delivered 20 million doses to 26 countries.
David: How was the UAE’s economy impacted by the Covid-19 outbreak? What do you see is the near‑ to medium‑term outlook for the major industries and trade?
Ms Mariam: Covid-19 has brought unprecedent disruptions to global trade and travel flow. As an international business hub, the UAE’s economy was unavoidably impacted, especially in the foreign trade, investment, tourism and logistics sectors. The UAE Government reacted swiftly to address challenges brought by the Covid-19 pandemic. The UAE continues to nurture an economic recovery from a position of relative strength due to its diversified economy, flexible fiscal policy options, and swift response to the pandemic. So, we expect that our trade and economic situation will be very sound in the post-Covid-19 world.
After a brief disruption caused by the pandemic in 2020, the markets have rebounded, showing the strength of the UAE economy and foreign investors' confidence in the UAE. For example, on the securities exchange, Dubai Financial Market (DFM) announced net profits of AED38.8 million during the first half of 2021. Moreover, according to a report from the UAE Central Bank, Abu Dhabi's quarterly average Financial Market Index rose by 17% during the first quarter of 2021, and in the same quarter the average market capitalisation of companies listed at the Abu Dhabi Securities Exchange surged by AED101 billion reaching AED826.7 billion.
With a continuing drop in new daily Covid-19 cases, the country’s economic activity is gradually returning to normal. The National Crisis & Emergency Management Authority has eased restrictions for some sectors including hotels, food and beverages, MICE (meetings, incentives, conferences & exhibitions) and public transport. Shopping centres, restaurants and cafes can operate at 80% capacity, while hotels can go back to full capacity, with masking still mandatory in public places. Other cultural and recreational facilities can operate at 80% capacity, while weddings and events are capped at 60%, and public transportation at 75%.
The country has re-opened its doors to visitors from around the world. From 30 August, tourist visas became available to applicants worldwide, provided that they were fully vaccinated with one of the WHO-approved Covid-19 vaccines. Visitors arriving with a tourist visa must take a rapid PCR test at the airport.
David: What are the key development strategies for the UAE in the post-Covid-19 era? What are the key sectors that Hong Kong businesses should look at?
Ms Mariam: In the post-Covid-19 era, the UAE will focus on all-round development in advanced industries and services.
To empower and expand the industrial sector to drive a sustainable national economy, the UAE has this year launched a ten year strategic plan called Operation 300 billion. Focusing on industries using advanced technology and Fourth Industrial Revolution solutions and applications, the plan aims to position the UAE as a global industrial hub that attracts talents, developers and experts from around the world. Future industries that the strategy will focus on include space technology, medical supplies and pharmaceuticals, advanced technologies manufacturing, clean and renewable energy, machinery and equipment, and food and beverages. Operation 300 billion will support more than 13,500 SMEs by 2031. More than 33,000 industrial enterprises operate in the UAE, 95% of them being small and medium-sized businesses.
In addition, the UAE adopted the National AI Strategy 2031 and the UAE National Program for Artificial Intelligence, both of which will shape the digital and technological ecosystems and impact digital creativity. It is also worth noting that in 2019 the UAE established the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), the world’s first graduate-level, researched based AI university, with world-renowned Chinese computer science professor Eric Xing as its president.
The UAE is the largest FinTech hub for start-ups across the Middle East region, housing almost 50% of the region’s FinTech companies. For instance, the two globally acknowledged financial free zones, Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC), are behind some of the region’s most distinguished FinTech initiatives including the DIFC FinTech Hive, the ADGM RegLab fintech sandbox and the Plug and Play ADGM accelerator program.
The UAE has seen dramatic growth in digital healthcare, e-commerce, online delivery apps, remote working platforms and drone industries amid the pandemic. Many of these services are expected to continue to prosper in the coming years.
The UAE aims to increase the contribution of the cultural sector to the GDP. This will include investment in art and education, and the creative industries, including gaming, fashion, architecture, museums and libraries, are set for rapid growth. Various emirates plan to increase the number of their creative and cultural institutions, providing jobs in various sectors of the creative economy. The latest example is the first China-UAE joint venture film “Home Operation” which entered production in July 2021.
David: The Dubai Expo 2020 has been delayed for a year due to the Covid-19 outbreak. What do you expect the Expo will bring to the economy and development of the UAE and the world?
Ms Mariam: Set to open on 1 October 2021 till 31 March 2022, The Dubai Expo is expected to bring an economic windfall to strengthen the recovery for the UAE. The Expo is expected to receive 25 million visitors despite ongoing travel restrictions and lockdowns in some countries. This optimistic forecast is further augmented by the UAE's successful ongoing vaccination drive, with more than 76% of the total population already fully inoculated.
In addition to tourism, we expect the Dubai Expo to act as a connecting platform for businesses around the world, with ample business matching opportunities. The Expo governing body estimates that the event will raise the overall GDP of the country, yielding AED89 billion through increased economic activity in numerous sectors such as tourism and hospitality, logistics, and real estate, with key benefits including foreign investment opportunities, economic diversification, and job creation.
More importantly, the Expo, with pavilions representing over 190 countries, is a catalyst for transformation, a place to share ideas and innovations and collectively contribute towards creating a better world for future generations. The theme of the Expo: ‘Connecting Minds, Creating the Future’ means to co-operate, collaborate and generate ideas about what our tomorrow will look like. The three sub-themes of Opportunity, Mobility, and Sustainability effectively reflect the deeper meanings of the main theme.
David: As you said, sustainability is one of the themes of the Dubai Expo. Can you elaborate on green and sustainable development in the UAE in general? What are the government strategies and initiatives to support sustainable development?
Ms Mariam: As a country that has focused on developing infrastructure during the last few decades, the UAE has shown enormous will and vision to mitigate its carbon footprint, building a green economy for sustainable development while preserving the environment, and achieving a balance between economic and social development.
The UAE was the first country in the region to join the Paris Agreement, whereby 196 signatory countries committed to keeping global warming at less than 2 °C above pre-industrial levels and, if possible, limiting global temperature rises to 1.5 °C. In solidarity with these efforts to reduce global warming, the UAE has pledged to reduce carbon emissions by a quarter by 2030. The first Regional Climate summit that was held in Abu Dhabi in April 2021 and attended by leaders from the region is one of the many proofs that the UAE is walking the talk when it comes to climate action and sustainable development.
The UAE Vision 2021, the UAE Centennial 2071, the UAE Energy Strategy 2050, and the National Climate Change Plan 2050 announced by the UAE cabinet in 2017 aim to consolidate efforts to promote clean energy by managing greenhouse emissions while sustaining economic growth. Earlier this year, the UAE government approved the UAE Circular Economy Policy 2021-2031, while Dubai announced that it aims to convert 60% of the emirate into natural reserves under the Dubai 2040 Urban Plan. These are the latest examples of how the country is going green.
Hence, it is clear that the emirate is taking concrete steps to shift the base of its economy from natural resources to knowledge, innovation and the export of cutting-edge technologies. A major step towards this is to develop a smart city which involves six key sectors, namely: transportation, infrastructure, communications, economic services, urban planning and electricity.
Masdar City represents the first attempt in the Middle East to build a sustainable city with reduced energy and water use and minimum waste. It is solar powered and combines advanced technologies with sophisticated architectural design. Minimising energy use is one of its primary strategies to conserve the environment. Masdar City houses the headquarters of the International Renewable Energy Agency, an intergovernmental organisation that supports countries in their transition to a sustainable energy future.
Dubai South District is the venue of Expo 2020. Sustainability is one of the themes of Expo 2020. Terra, the Sustainability Pavilion, aims to meet the highest available accreditation for sustainable architecture – LEED Platinum certification. Half of the electricity used by the Expo will come from wholly renewable sources, and half of this will be generated on the site itself. The vast majority of the materials used in permanent construction on the site will be re-used in building infrastructure.
David: Are there any initiatives to support overseas companies, such as Hong Kong corporations, to invest and operate in the UAE?
Ms Mariam: The UAE continues to reinforce its position as business hub in the Gulf region and in the world and maintains a welcoming stance to foreign businesses and people. Currently there are residents from more than 190 nations working and living in the UAE.
The UAE has an unmatched FDI policy in the region. One of the key initiatives is the recently adopted 100% foreign equity ownership. A wide range of sectors is covered, including transport and storage, agriculture, space, manufacturing, renewable energy, hospitality and food services, information and communications, professional, scientific and technical activities, administrative and support services, educational activities, healthcare, art and entertainment, and construction, all subject to the rules of different Emirates in the country.
To further support entrepreneurs, the UAE has launched a Golden Visa Scheme which enables foreign investors, entrepreneurs, and researchers to live, work and study in the UAE without the need for a national sponsor and with 100% ownership of their business on the UAE mainland. These visas will be issued for five years for investors in property, entrepreneurs, and outstanding students, or 10 years for those investing at least AED10 million in public investments or for people with specialised talents. Everyone is welcome to explore their business opportunities and develop their professional life in the UAE.
The Consulate General of UAE in Hong Kong works continuously to facilitate business and investment for Hong Kong companies in the UAE. For example, the Consulate co-organised a webinar on that topic in July 2021 with the Chinese General Chamber of Commerce. There are broad horizons for Hong Kong companies, with investment opportunities in all of the Emirates of the UAE and across various sectors.
Most recently, the UAE Government has unveiled a global campaign entitled ‘United Global Emirates’ in September 2021 to attract foreign investment and talents and promote the features that distinguish the UAE as one of the world’s most dynamic, competitive and innovative business hubs. Through its official website, foreign investors can directly connect with the FDI authority of each emirate and explore a wide range of partners available at this one-stop shop.
David: How about Hong Kong and the rest of the Greater Bay Area (GBA)? How are the UAE companies capitalising on the opportunities provided by the GBA initiatives?
Ms Mariam: The economic bonds between the UAE, Hong Kong and the mainland China have improved significantly over the last decade, with Hong Kong as the 15th largest trading partner of the UAE and the UAE as the 16th largest trading partner of Hong Kong. There are currently twelve elite UAE companies in Hong Kong, which are Etihad Airways, Emirates Airline, DP World, First Abu Dhabi Bank, Mashreq Bank, Aramex, Dubai Exports, Emirates Shipping Line, Abu Dhabi Global Market, ADSS, Lulu Finance, and Wall Street Exchange.
The Consulate General is working to attract more UAE companies to Hong Kong and the GBA by introducing the Hong Kong market to UAE Chambers' members and UAE outbound investment authorities, as well as encouraging UAE companies in Hong Kong to explore opportunities in the GBA. Hong Kong’s proximity to other cities in the GBA and mainland China, as well as her professional services such as financial, legal and marketing services, could be great partners for UAE’s enterprises in expanding their operations in the region.
 Twitter of Ministry of Health and Prevention, UAE
 The UAE Government portal, Economic support to minimize the impact of Covid-19
 The UAE Government portal, Post Covid-19 recovery plans and initiatives
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