It's safe to say that, past three to four weeks have been tough for everyone worldwide, as we grapple with the adverse effect of the COVID-19 pandemic. It is now becoming widely accepted that moving into the direction of flattening the infection curve is our best bet at containing the spread of viruses without put pressure on national healthcare systems globally. As more data surfaces regarding the viruses’ epidemiological appearances, we become better equipped to deal with it and to care for those afflicted.
There is no doubt that the coronavirus pandemic will have manifold implications on the economy and the business world. Most markets worldwide are now well into correction mode, with many already plummeting into the bear market territory. As far as the UAE is concerned, we can currently divide the knock-on effects into impact on commodities, travel and tourism, and the effect on Emirati society.
The United Arab Emirates, with other nation's government, understood the severity of the situation at an early stage and responded proactively, were highly organized, technologically advanced, and were strategic in conducting activities in a phased manner. The government is taking every step needed to contain the spread of the virus and flatten the curve.
Impact on Businesses in the UAE
It is understandable that, with cancelled events, training, conferences, limited trading, closed air space has meant businesses have been affected severely, especially the SMEs. According to the Ministry of Economy in the UAE, the SME sector represents more than 98% of the total number of businesses operating in the UAE. It contributes towards 52% of the non-oil GDP.
Businesses in the Emirates have been given generous support through the UAE government stimulus packages with the reduction in the cost of doing business from 25-98%, to inspire and ease of business in investment, production, trade, export, import, and innovation, which have gone a long way to ease the impact. The government authorities have also provided a consolidated platform for the residents of Emirates based in the UAE holding a residence visa and who are unemployed as a result of COVID-19 to apply for jobs on the Virtual Labour Market Portal. Employers have been asked to publish their vacancies on this portal with vacancies ring-fenced to UAE residence visa holders.
The Emirati residents and businesses have been working together in solidarity to fight this pandemic.
Impact on the Economy in the UAE
It should be noted that the UAE has also been one of the hardest hit economically, as the nation was looking forward to EXPO 2020 in October 2020, which has now been postponed to 2021. Apart from this economy-wise, oil, tourism, and capital markets are hit by coronavirus pandemic in the UAE.
Oil is the main export product of Gulf Cooperation Council countries, and prices have fallen dramatically this week after OPEC and its allies failed to reach an agreement to cut output. The virus has enormously exacerbated the demand shock of an industry already challenged with a global slowdown. The strategy now appears to have shifted from maintaining a given price level via operation cuts to competing for market share with manufacturers like the Canada and USA that cannot profitably extract at these lower prices.
UAE has always been the go-to spot for travel and tourism worldwide. The skyline buildings, state-of-art infrastructure, and shopping sites have attracted tourists globally. Due to a complete travel ban, and the cancellation of flights, the airline industry is going through losses. With worldwide travel almost certain to be severely disrupted well into Q2 of 2020, this is a key part of the UAE's economy that will take a hit.
If nothing else, coronavirus pandemic has brought people of the UAE closer, more reliable and working in solidarity than ever before. They are more caring, more supportive. Individuals and organizations are providing free webinars, free consulting services, free coaching, volunteering, and much more to SME's and individuals that are in need. The humanity, optimism combined with collaboration will help organizations, residents, and UAE not just survive but thrive.
How can Commitbiz help you during the COVID-19 crisis?
Tough times need tough measures; hence, we at Commitbiz have come up with a #STARTFROMHOME initiative to help businesses in the UAE. We have fine-tuned our business setup procedure so that you can register your business from the convenience of your home. Your company can be incorporated in just ten days, and what's more, you can also apply for an offshore bank account from your home.
Utilize these weeks to register your business in the UAE, and once this pandemic is in control, your company will be up and running. Also, don't forget, with the present economic situation, we're giving away special quarantine discounts on our business setup packages.
Contact us today to incorporate your business in the UAE.