UAE’s stimulus package to benefit entire community
Abu Dhabi on Monday announced a number of initiatives under Ghadan 21 to support the private sector and startups, and the residents in view of the crisis generating out of Covid-19 outbreak.
Launched by the Abu Dhabi Executive Council, the 16 initiatives are aimed at boosting small and medium enterprises (SMEs) and offer relief for residents.
The initiatives include allocating Dh5 billion to subsidise water and electricity for citizens, and commercial and industrial activities. Subsidising electricity connection fees for startups until the end of this year and exempting all commercial and industrial activities from real estate registrations are also part of the initiatives.
All commercial and industrial activities are exempted from Tawtheeq fees this year while Dh3 billion has been allocated to the SME credit guarantee scheme managed by the Abu Dhabi Investment Office to stimulate financing by local banks and enhance SMEs’ ability to navigate the current market environment.
Dh1 billion has been allocated to establish a market maker fund that enhances liquidity and sustain the balance between supply and demand for stocks. The initiative will also make sure that payment of all approved government invoices will be made within 15 working days.
Bid bonds will be suspended and startups will be exempted from performance guarantees for projects up to Dh50 million and industrial land leasing fees will be reduced by 25 per cent on new contracts.
Waiving current commercial and industrial penalties, exempting commercial vehicles from annual registration fees to the end of 2020, exempting all vehicles from road tolls till the end of 2020, suspending tourism and municipality fees for tourism and entertainment sectors and offering up to 20 per cent discount on rental values for restaurants and tourism and entertainment sectors are among the other initiatives under the announcement.
A new committee, headed by the Department of Finance will be established, with members from the Department of Economic Development and local banks, to review lending options to support local companies.
To impact all sectors
The measures will have direct benefits for common man, small and medium-sized enterprises (SMEs), startups and industry at large. The impact of the initiatives and volume of discounts will cut across all strata of society – the general public, businesses and industrial sectors.
The Dh5-billion allocation to subsidise water and electricity for citizens and commercial and industrial activities, and exemption of all vehicles from traffic tariffs and road tolls till the end of the year will improve the quality of life of the general public, many residents opined.
Shereen Shabnam, an automotive junkie, was thrilled to no end.
“As an avid driver who tests cars for a living and spends more time on the road than in an office, I am delighted to hear that the government’s stimulus package includes relief from traffic tariffs and road tolls. This is indeed very welcome and encourages me to continue working in isolation in the car while I am out and about on the road,” said Shereen, the Fiji ex-pat who is a member of the GCC jury for awards like the Middle East Car of the Year and the Women’s World Car of the Year.
Purnima Pariyani, a homemaker and former fashion and textile designer who is looking for startup opportunities, felt empowered over the announcement.
“Such an array of measures came as a big relief to families and raises the confidence of wannabe entrepreneurs like me. The subsidy on water and electricity will have an impact on rents. No tolls and traffic tariff will put more money in our pockets. I hope there are specific benefits for women entrepreneurs,” the Indian ex-pat said.
Mohamed Rafi, manager, Express Auto Wash at Mushrif Mall, said the subsidy was a great relief.
“We are all thrilled. Although we recycle 95 per cent of the water we use, our business involves using water and electricity. This announcement gives us great relief during these challenging times.”
Startups, SME’s confident about growth
Ibrahim Ajami, an acting CEO of Hub71 and head of ventures, Mubadala Capital, said the announcements underline Abu Dhabi’s status as an attractive destination for growing businesses and further validates the government’s commitment to prioritising tech companies and startups as a major driver of economic growth and talent development.
“These new initiatives will support Hub71’s efforts to attract exceptional startups, founders and tech talent from all over the world. Hub71 will continue to actively play its role – under Ghadan 21’s knowledge pillar – to strengthen Abu Dhabi’s position as a global innovation hub and actively contribute to the development of Abu Dhabi’s knowledge-based economy; making a technology-enabled future possible.”
Mohamed Suhaib, managing partner, Fresh Bite Paprika Restaurant, termed the announcements a ‘fantastic opportunity’ for SMEs.
“Under the current situation, these measures will give stability to SMEs. These are much-needed impetus. There’s a reduction in rentals for restaurants. I hope private building owners are able to pass this benefit to us. Overall, these are good moves to improve business sentiments,” the Sri Lankan ex-pat said.
Al Ain-based Abdul Hadi Asakzai, managing director, Afghan General Stores, said the measures will revitalise the market and boost the morale of SMEs.
“These measures are for the benefit of the people for the entire year. Such measures will ensure more money in the pockets of the people to spend. So the economy will benefit in the large run.”
Fresh impetus for entertainment, hospitality
Industry players and hotel managers were all praise for the support offered in hard times. Double delight measures include no tourism and municipality fees for tourism and entertainment sectors. Up to 20 per cent rebate on rentals for restaurants, tourism and entertainment sectors.
Saood Al Hosani, acting undersecretary, Department of Culture and Tourism – Abu Dhabi, said the initiatives will help maintain the Capital’s economic gains and support the private sector.
“These initiatives will undoubtedly make a positive impact on the economy and drive economic growth, especially as they exempt potential investors from certain fees, incentivising them to launch new services or major projects at the lowest cost.”
Fabrice Ducry, general manager, Saadiyat Rotana Resort and Villas, said tourism industry would get back on its feet.
“We are delighted to live and work in a country like the UAE, where the government truly cares about its residents and locals. We are hopeful that the situation will get better soon and believe the new set of initiatives have been carefully thought through and will help the tourism sector to get back on its feet. The 20-per cent discount on rentals will help us to continue through this hard time.”
Rene Mayer, director of sales and marketing, Grand Hyatt Abu Dhabi, noted the stimulus programmes are vital for protecting the UAE’s economic stability.
“The government’s dedication and proactive efforts are much appreciated in this situation. Such initiatives not only support us as a business but ensure a safe and stable environment for all in these times of global uncertainty. The UAE has always strived to promote stability and prosperity through its various approaches and we are glad to be part of this country where the government is trying to hold everything together and support us all by adapting to the current situation.”
Thumbs up from real estate developers
Developers hailed suspension of real estate registration fees for this year and other measures.
Talal Al Dhiyebi, chief executive officer, Aldar Properties, said the strategic directives issued by the Abu Dhabi government came at a critical time for the local economy.
“Thanks to our wise leadership, the new set of economic initiatives can help ease the burden of these global headwinds on people and businesses in Abu Dhabi and can sustain a more stable environment in the long run. We believe that the initiatives focused on the real estate and tourism sectors in particular, will translate into significant benefits for the Abu Dhabi community, and will provide an invaluable buffer against potential impact on local businesses.”
Inc. salutes leadership’s confidence, care
Industry leaders underlined the measures will support businesses and community.
Yusuffali MA, chairman of LuLu Group, noted these steps will have ‘far-reaching and positive impact’ across different sectors.
“Unprecedented circumstances require unprecedented actions and that’s exactly what the leadership has done. The new Abu Dhabi stimulus package will surely spur lots of activities and growth in both private and government sectors. These steps will further boost investor confidence and consolidate Abu Dhabi’s position as region’s key investment hub.”
Dr Azad Moopen, founder Chairman and MD, Aster DM Healthcare, said the measures will help everyone, especially people in the lower economic strata.
“Fee waivers and exemptions will have a significant impact on the business front. The new set of initiatives has reassured residents and businesses that approved capital expenditure and development projects in the Capital will continue as planned. These steps will ensure the SME sector will continue to flourish, while reducing the effect of the situation felt by residents and businesses alike.”
Dr Shamsheer Vayalil, chairman and MD, VPS Healthcare, felt the comprehensive packages will provide major relief for all.
“The novel coronavirus pandemic has the potential to slow down the global economy. The stimulus package will play a crucial role in revitalising any negative impact on major sectors. The confidence displayed by the leadership by itself is self-motivating, inspiring and encouraging.”
Kamal Vachani, group director of Al Maya Group, said the UAE leadership is making all efforts to help the business community and citizens to deal with the impact of Covid-19. “Subsidies and exemption in fees will help companies to run business with ease of mind. Suspension of tourism fees is a significant initiative to support the hospitality industry. Toll exemption will benefit all.”