LONDON: New measures introduced by the UAE to encourage business competitiveness are set to provide a boost for private sector growth, as the country eases back on spending restrictions following a recovery in oil prices.
The UAE introduced a string of business reform measures late on Wednesday, including the reworking of business fees to hire private sector workers and more flexible visa regulations.
“With oil recovering, the UAE is in one of the best positions to loosen fiscal policy as it has massive savings and sovereign wealth,” said Jason Turvey, Middle East analyst for Capital Economics.
A key measure introduced is the scrapping of fees businesses pay to hire private sector workers, many of whom are expats. Fees have been replaced by an insurance system.
Businesses will now pay an annual tariff of 60 dirhams ($16.34) per worker instead of a deposit of 3,000 dirhams, according to the state-owned WAM news agency.
Sheikh Mohammed Bin Rashid Al Maktoum, the UAE’s prime minister and ruler of Dubai, tweeted that the move would save billions.
“In a cabinet meeting today, we approved reforms including replacing the bank guarantee system for private sector employees with a low-cost insurance scheme. This will release 14 billion dirhams back to the private sector companies and will further lower the cost of doing business,” he tweeted late on Wednesday.
The latest announcement comes on top of a recently announced stimulus package worth $13.6 billion for the emirate of Abu Dhabi, including plans to ease restrictions on full foreign ownership of UAE businesses and to let some foreigners stay longer, thereby reducing the amount of earnings sent out of the country.
The latest batch of measures is also linked to tourism and hospitality with a pledge to exempt transit passengers from entry fees in the first 48 hours. A transit visa extension will be made available for up to 96 hours for a fee of 50 dirhams.
“Tourism should be supported by this and other measures at a time when the industry has faced headwinds such as the strong dollar,” Monika Malik, chief economist of Abu Dhabi Commercial Bank, told Arab News.
Other measures include the introduction of a six-month visa for jobseekers who overstay their visa but want to work in the country, and a temporary visa to enhance the UAE’s position “as a land of opportunities, a destination for talents and professionals,” according to Sheikh Mohammed.
Lower oil revenue and weaker regional economies have hurt growth in the UAE, where expatriates make up about 80 percent of the population. Last year, growth slumped to an inflation-adjusted 0.5 percent after OPEC nations agreed to production cuts, down from 3 percent in 2016.
“Visa reforms are part of overall measures to improve the business environment and boost economic competitiveness,” said Malik.
An immediate lift to employment was unlikely, she said, but the measures would improve company liquidity and profit margins, and possibly lead to increased capital expenditure.
Sheikh Mohammed said: “The UAE is among the 10 most competitive countries in the world and our goal is to remain a top destination for ease of doing business, through an agile economy based on flexibility and openness.”
“Gulf countries want to encourage new industries and attract foreign capital. The rebound in crude prices has given them more room for spending,” Turvey told Arab News.
“Saudi Arabia has also announced plans to revive growth as austerity is reined back,” he said.
“With oil recovering, UAE and others can afford to loosen fiscal policy.”
Measures taken recently by Dubai have included a one-year freeze on school-fee hikes, and a waiving of some fees on aviation and real estate transactions that will help cut the cost of living and doing business.
A research note from Emirates NBD said the latest UAE measures should offer some relief for businesses across all sectors, boosting the key transport and logistics sector.
“The measures were broader in scope than we had expected following the instructions to reduce the cost of doing business in the emirate,” the bank said.
New UAE employee fees and visa scheme set to aid private sector
New UAE employee fees and visa scheme set to aid private sector
- The UAE introduced a string of business reform measures late on Wednesday, including the reworking of business fees to hire private sector workers and more flexible visa regulations.
- Sheikh Mohammed Bin Rashid Al Maktoum: “The UAE is among the 10 most competitive countries in the world and our goal is to remain a top destination for ease of doing business, through an agile economy based on flexibility and openness.”
COP29 Day 3: World leaders address urgent climate goals at high-level session
RIYADH: World leaders entered their third day of climate talks at COP29 in Baku, marking a critical juncture in discussions focused on climate action and multilateral cooperation.
The High-Level Segment continued with addresses from heads of state and government as countries reiterated commitments to combat climate change.
Kuwait’s Crown Prince Sheikh Sabah Khaled Al-Hamad Al-Sabah emphasized his country’s long-term strategy for environmental sustainability and carbon reduction, stating that climate change “is a global concern and a threat to many countries.”
Highlighting the visible impacts of climate change, he cited “rising temperatures, dust storms, and heavy rain” as growing challenges in the region.
Kuwait aims to achieve net zero emissions by 2060, supported by strategic initiatives and a significant shift toward renewable energy. The country plans to generate 50 percent of its electricity from solar power, a major component of its national sustainability efforts, Al-Sabah said.
The session opened with Shina Ansari, Iran’s vice president, followed by Joseph Owondault Berre, Gabon’s vice president. Berre underscored the importance of multilateralism, calling it “the only weapon that can tackle issues associated with climate change.” He emphasized the need for “collective action based on trust, fairness, and shared responsibility,” highlighting that global collaboration remains critical in addressing climate impacts equitably.
As COP29 progresses, world leaders are expected to announce further initiatives to address climate threats through collaborative, international approaches.
IMF delegation in Pakistan, discusses ‘key benchmarks’ of $7 billion loan program — official
- IMF has said Porter’s visit is not part of the first review of loan program
- First review not scheduled to take place before the first quarter of 2025
ISLAMABAD: An International Monetary Fund (IMF) delegation is in Islamabad this week and will hold discussions with top Pakistani officials on the “key benchmarks” of a $7 billion loan program approved in September, a finance ministry official said on Tuesday.
The IMF delegation led by Pakistan mission chief Nathan Porter arrived in Islamabad on Monday on an unplanned visit. The team is expected to hold meetings until Friday with top officials from ministries such as finance and energy and the Federal Board of Revenue, the main tax collection agency, to collect data on “loan program performance to date,” a finance ministry official told Arab News, seeking anonymity.
The IMF has said Porter’s visit is not part of the first review of the loan program, which is not scheduled to take place before the first quarter of 2025.
“Some key benchmarks of the loan program will come under discussion during the meetings, as Islamabad faces some revenue shortfall and a recent botched attempt to privatize the Pakistan International Airlines,” the finance ministry official said.
“Matters like external financing gap and reforms in the energy sector are also expected to be discussed with the IMF delegation.”
The IMF reached a staff-level agreement with Pakistan in July for a 37-month $7 billion bailout package, which the Fund’s Executive Board approved in September. This was the 25th loan program that Pakistan has obtained since 1958.
In a statement released on Tuesday, the ministry of finance said a delegation led by Porter had an “initial meeting” with finance minister Muhammad Aurangzeb.
Minister of State for Finance Ali Pervez Malik, Governor State Bank Jameel Ahmed, Federal Board of Revenue Chairman Rashid Mahmood Langrial and senior finance ministry officials were also present in the meeting, the ministry said.
Islamabad secured the bailout loan, critical to keeping its $350 billion fragile economy afloat, after taking painful measures such as hiking fuel and food prices and implementing reforms to broaden the country’s tax base and privatize state-owned entities.
“INTERIM CHECKS”
Pakistan’s macroeconomic conditions and investor sentiment have improved in recent months, which analysts say has led to a bullish trend in the country’s stock market.
Syed Atif Zafar, the chief economist at Topline Securities, said the IMF delegation’s meetings with Pakistani officials were part of “interim checks” to ensure a successful review of the loan facility next year.
“The government failed to achieve the tax revenue target in the first quarter that has perhaps necessitated this IMF visit, but still the authorities have multiple options and time to overcome this gap,” he told Arab News.
“The good thing at this point is that all structural and quantitative benchmarks of the loan program are on track.”
Tahir Abbas, a senior economist and head of research at Arif Habib Limited, said Pakistan last month requested the IMF for a $1 billion climate financing facility to mitigate climate risk, which would be discussed during the ongoing IMF visit.
“Pakistan’s revenue shortfall of around Rs200 billion ($720 million) in the first quarter has mainly necessitated this IMF visit,” he told Arab News.
“The finance ministry will now inform the IMF delegation about the possible revenue measures to overcome the shortfall and cut the expenditures.”
NEOM board of directors announces leadership change
- Head of Public Investment Fund’s Local Real Estate Division since 2018, Al-Mudaifer has a deep and strategic understanding of NEOM and its projects
NEOM: The NEOM Board of Directors on Tuesday announced the appointment of Aiman Al-Mudaifer as acting CEO of the company. Al-Mudaifer assumes leadership of NEOM, following Nadhmi Al-Nasr’s departure.
As NEOM enters a new phase of delivery, this new leadership will ensure operational continuity, agility and efficiency to match the overall vision and objectives of the project.
Al-Mudaifer takes the helm of the organization with the support of a strong leadership team across NEOM’s regions, sectors and departments.
Head of Public Investment Fund’s Local Real Estate Division since 2018, Al-Mudaifer has a deep and strategic understanding of NEOM and its projects.
In his role at PIF, Al-Mudaifer oversees all local real estate investments and infrastructure projects. He is also a board member of multiple prominent companies within the Kingdom.
NEOM is a fundamental pillar of Saudi Vision 2030 and progress continues on all operations as planned, as we deliver the next phase of our vast portfolio of projects including THE LINE, Oxagon, Trojena, Magna and The Islands of NEOM.
Through these projects, NEOM seeks to achieve harmony between livability, business and nature, and to create a better future for current and future generations.
Maldives, Bulgaria push for greater climate action, financing
- Maldives President Mohamed Muizzu said small island developing states require trillions of dollars in climate finance
- Bulgarian President Rumen Radev addressed the global impact of climate-related disasters
RIYADH: Insufficient financing continues to be a significant barrier preventing many countries, especially underdeveloped nations, from meeting their climate goals, according to the President of the Maldives.
Speaking on the second day of COP29, held in Azerbaijan from Nov. 11-22, Mohamed Muizzu emphasized that small island developing states require trillions, not billions, of dollars in climate finance.
“It is the lack of finance that inhibits our ambitions, which is why this COP, the finance COP, we need to deliver the new climate finance goal. This must reflect the true scale of the climate crisis. The need is in trillions, not billions,” Muizzu said.
He added, “It must consider the special circumstances of small island developing states — it must include adaptation, mitigation, and loss and damage.”
Muizzu also reiterated the importance of the environment for his country, stating: “You have called for stronger climate action. Our call has not changed. Our cause has not strayed because, for us, the environment and the ocean are more than resources. They are our cultural identity.”
In a similar vein, Bulgarian President Rumen Radev addressed the global impact of climate-related disasters, emphasizing that no region is immune to the deadly and costly consequences of climate change.
“Bulgaria is committed not only to being part of regional and energy cooperation initiatives across Central and Eastern Europe, the Balkans, and the Black Sea region but also beyond, by strengthening the links between the European Union and non-EU countries who share our priorities on climate neutrality, just energy transition, energy security, and low-carbon technological innovation,” Radev said.
He further called for broader action, stating, “All parties should undertake greater efforts to integrate climate change adaptation and resilience into all policies and strategies.”
Closing Bell: Saudi main index slips to 12,048
- Parallel market saw a drop, losing 50.59 points to close at 29,110.41
- MSCI Tadawul Index shed 5.06 points to end at 1,516.14
RIYADH: Saudi Arabia’s Tadawul All Share Index fell on Tuesday, losing 58.74 points to close at 12,047.67.
The total trading turnover of the benchmark index was SR5.75 billion ($1.53 billion), with 70 stocks advancing and 152 declining.
Saudi Arabia’s parallel market saw a drop, losing 50.59 points to close at 29,110.41. The MSCI Tadawul Index also declined, shedding 5.06 points to end at 1,516.14.
The best-performing stock on the main market was Al Jouf Cement Co., with a 4.75 percent increase to SR10.58. Other top gainers included Malath Cooperative Insurance Co. and Elm Co., with shares rising by 4.40 percent to SR15.66 and 3.87 percent to SR1,101.1, respectively.
The worst performer on the main index was Fawaz Abdulaziz Alhokair Co., whose share price dropped by 4.42 percent to SR12.12.
National Environmental Recycling Co., also known as Tadweer, announced it had signed a memorandum of understanding with Re Sustainability Middle East Co. to explore the potential for establishing smelters and recycling units in the Kingdom. According to a statement on Tadawul, the deal is valid for one year and carries no immediate financial impact.
The company’s share price declined by 0.45 percent to SR13.4.
Purity for Information Technology Co. announced it has secured a contract valued at SR10.7 million from Saudi Comprehensive Technical and Security Control Co. to supply technology equipment. The company stated that the financial impact of the contract will be reflected in the first quarter of next year.
Its share price dropped by 0.73 percent to SR8.33.
Red Sea International Co. reported a narrowed net loss of SR2.18 million for the first nine months of this year, compared to a SR54.7 million loss in the same period in 2023. According to a statement on Tadawul, the improvement was driven by a 515.78 percent year-on-year increase in sales revenue. However, Red Sea International’s share price declined by 4.05 percent to SR71.
Lazurde Co. for Jewelry reported a 42.98 percent decline in net profit for the first nine months, totaling SR24.8 million, compared to the same period last year. The company attributed this drop to a 6.61 percent year-on-year decrease in operating profit over the nine-month period. Lazurde’s share price dropped by 2.05 percent to SR13.36.
