Abu Dhabi Economic Cooperation Committee sets goals, work programmes
The Economic Cooperation Committee in Abu Dhabi has set its strategic objectives, tasks and work programmes as it moves to the next phase following its creation under a decision issued by Sheikh Khalid bin Mohamed bin Zayed Al Nahyan, Member of the Executive Council and Chairman of the Abu Dhabi Executive Office.
The committee, which includes members from public and private sectors, seeks to strengthen and empower the latter and enhance its contribution to the sustainable economic development of Abu Dhabi.
Mohammed Ali Al Shorafa, chairman of the Abu Dhabi Department of Economic Development, ADDED, headed the committee’s first meeting which was held virtually. In attendance were Falah Al Ahbabi, chairman of the Department of Municipalities and Transport, DMT; Mohamed Khalifa Al Mubarak, chairman of the Department of Culture and Tourism – Abu Dhabi, DCT Abu Dhabi; Dr. Tariq Bin Hendi, director general of the Abu Dhabi Investment Office, ADIO; and 22 representatives from private and semi-private companies.
During the meeting, Al Shorafa reiterated the Abu Dhabi Government’s constant efforts to enhance the role and participation of the private sector in achieving the emirate’s sustainable economic development. The committee’s work groups focus on seven strategic sectors, namely: funding and financial affairs; infrastructure, construction and building; industry and trade; tourism and services; education and technology; health; and small and medium-sized enterprises, SMEs.
Al Shorafa noted that the committee will further strengthen the cooperation between government, semi-government and private sector entities and accelerate Abu Dhabi’s economic agenda. It also represents a specialised economic platform for partners in the public and private sectors aimed at facilitating existing collaboration and attaining economic growth in the emirate based on knowledge, diversity, and sustainability.
He explained that the Economic Cooperation Committee will review and evaluate the concerns and requirements of the targeted economic sectors as well as study the best approaches to boost their growth such as proposing policies, strategies, systems and regulations in line with the emirate’s economic diversification efforts to increase development in the private sector. He further highlighted that the committee will help enhance the communication among partners in the public and private sectors and thereby promote transparency, open discussions, and knowledge sharing.
“The current circumstances brought about by the coronavirus pandemic which many countries are facing have prompted the committee to double its efforts and find solutions, initiatives, and enablers that will help organizations tackle challenges and difficulties. We emphasize the importance of following the directives of the Abu Dhabi Government’s leadership aimed at ensuring the continuity of economic growth across non-oil sectors and enhancing their contribution in the emirate’s gross domestic product, GDP,” Al Shorafa stated.
He concluded that these directives are focused on promoting the role of the private sector as a key driver in Abu Dhabi’s local economic system and strengthening its partnership with the government sector which will provide investment opportunities, implement development projects and execute a stimulus package of initiatives and incentives that support private sector companies.
The committee discussed the tasks and responsibilities of various work teams and the means of implementation, including the role of research and consultation teams who will conduct analytical studies and develop several economic indicators for the targeted economic sectors and thereby enable the committee to come up with key recommendations and initiate decisions.
In addition, the meeting explored employing digital platforms dedicated for stakeholders to ensure the continuity of joint coordination, work and meetings and to help achieve the committee’s goals. The proposal seeks to facilitate the success of the set projects and programs being implemented by various work teams, as well as monitor and evaluate their performance which can contribute to the further enhancement of Abu Dhabi’s local economic system.
The key role of the government sector in supporting targeted economic sectors and its recommendations for the formulation of strategies, policies, rules and regulations based on latest economic data and indicators were also on the meeting’s agenda, and are being viewed as a key support to decisions that would foster economic diversification and expansion of the private sector in Abu Dhabi.
Strong rebound likely for Indian economy in 2021-22: ADB
The ADB expects India’s economy to contract by 9 per cent in 2020-21 as against the 4 per cent forecast made in June.
The Indian economy, after a deeper-than-expected contraction in the current fiscal, will make a strong rebound in fiscal year 2021-22 with the gross domestic product (GDP) recording 8 per cent surge as mobility and business activities resume more widely, the Asian Development Bank said on Tuesday.
Revising downwards its estimate for the GDP in the current 2020-21 fiscal, the ADB expects India’s economy to contract by 9.0 per cent as against the 4.0 per cent forecast made in June as the Covid-19 pandemic weighs heavily on economic activity and consumer sentiment in the country.
In its Asian Development Outlook (ADO) 2020 ppdate, the bank said India’s growth outlook remains highly vulnerable to either a prolonged outbreak or a resurgence of cases, with the country now having one of the highest number of Covid-19 cases globally. India had recorded over 4.9 million cases as of September 13, just behind the US which has over 6.5 million cases.
The revision comes on the back of several other forecasts projecting a bleaker outlook for Asia’s third largest economy in the current fiscal year. Latest to sound the alarm bells for the economy include S&P Ratings, Goldman Sachs, Fitch Ratings, Moody’s and Nomura. They have changed their forecasts to a sharper contraction of between 9.0 per cent and 11.5 per cent for India in the current financial year as against their earlier expectations. India’s economy shrank 23.9 per cent year-over-year in the March to June period, larger than most analysts expected.
“India imposed strict lockdown measures to contain the spread of the pandemic and this has had a severe impact on economic activity,” said ADB chief economist Yasuyuki Sawada.
“It is crucial that containment measures, such as robust testing, tracking, and ensuring treatment capacities, are implemented consistently and effectively to stop the spread of Covid-19 and provide a sustainable platform for the economy’s recovery for the next fiscal year and beyond,” he said.
India’s current account deficit is forecast to shrink to 0.3 per cent of GDP this fiscal year, then widen to 0.6 per cent of GDP in FY2021 with exports expected to recover as global growth rebounds.
ADB said rising non-performing loans caused by the pandemic that could further weaken the financial sector and its ability to support economic growth, while increasing public and private debt levels could affect technology and infrastructure investment.
The bank, which flagged other downside risks including contraction of investment as investors remain deterred by heightened risks and uncertainties, while private consumption may continue to suffer, said government initiatives to address the pandemic, including the rural employment guarantee program and other social protection measures, will aid rural incomes protecting the vulnerable people.
“The fiscal deficit is expected to rise significantly in FY2020 as government revenues fall and expenditures rise,” ADB said.
The upside is likely to be inflation which is expected to fall in the remainder of FY2020-21 to 4.5 per cent with tamed food prices and decreased economic activity, and then further decline to 4.0 per cent in FY2021-22.
The bank, which had rolled out an assistance package of $20 billion to help its developing members counter the severe impacts caused by the pandemic, said several government-initiated reforms in response to the Covid -19 pandemic that focused on enhancing agriculture markets, upgrading industrial park infrastructure, and implementing the National Infrastructure Pipeline would promote foreign investment, incentivise global supply chains to re-allocate to India, and create manufacturing hubs across the country.
Future readiness key to Dubai’s leadership in attracting FDI
Dubai’s readiness to attract conventional as well as new forms of investment is evident in the specialised strategies and initiatives launched over the past years.
Dubai Investment Development Agency (Dubai FDI) is working closely with investors with the aim of enhancing the absorptive capacity of new quality investments that keep pace with global market trends and support sustainable economic growth in the emirate, said Fahad Al Gergawi, CEO of Dubai FDI and President of the World Association of Investment Promotion Agencies (Waipa).
Participating in an open forum organised by Dubai Economy as part of its ‘Market Dialogue’ series under the title ‘Investment Readiness” The Future of Growth, Partnership and Innovation,’ Al Gergawi emphasised that future readiness is critical to maintaining the progress achieved by Dubai, most notably its decade-long leadership regionally as the topmost city in attracting FDI, during 2010 – 2019.
During the dialogue Al Gergawi shed light on the investment environment in Dubai post Covid-19, its strategic components, new types of investments being attracted and the opportunity available in the city for companies for growth, partnership and innovation.
Al Gergawi explained that Covid-19 demonstrated the efficiency and speed of services provided by the government of Dubai and the free zones in the emirate to facilitate the process of establishing and licensing investment projects and companies in the emirate, which created new opportunities and promoted growth of investments in critical sectors such as healthcare, logistics, e-commerce and digital economy, and particularly in technologies and services relating to food and agriculture.
Al Gergawi said: “Businesses locally and internationally realise the advantages of being in Dubai. A number of strategic components, including infrastructure, legislation, public services, geographical location, reinforce Dubai as a smart and sustainable city of the future, and a major hub in the global economy. Investment in its essence is concerned with the future, and that is why Dubai continues to develop its readiness in all fields in line with the vision and directives of our leadership, particularly His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.”
In spite of the impact of Covid-19, Dubai remained at the forefront of cities in the Middle East & North Africa and sixth globally in attracting FDI capital during the first half of 2020. Globally, the city ranked third in attracting greenfield FDI and fourth in project capital. Dubai also ranked first in Mena and seventh globally in the number of jobs resulting from FDI.
Speaking of the role of Investment Promotion Agencies (IPAs), Al Gergawi, in his capacity as President of Waipa, stressed that they play a vital role in supporting sustainable economic development at the level of cities and countries globally. IPAs assume added significance in light of the economic challenges that the world is currently facing, especially with declining global FDI, which dropped to less than $1 trillion this year.
Al Gergawi added: “At Waipa, we are working to strengthen capacities in crisis management and recovery in the short to medium term as well as setting strategic action plans that enhance private sector investment in productive assets, which will positively affect the global economy, create jobs and boost growth. We feel proud that Dubai’s leadership foresee the future of FDI as reflected in the launch of the ‘Hamdan Centre for the Future of Investment.’ Such initiatives promote capacity building globally at the professional, institutional and market levels to attract investments in projects that support the global Sustainable Development Goals 2030.”
Dubai has continuously maintained its leadership in attracting sustainable investments over the past ten years and also grown into a preferred global headquarters for international companies in the Middle East, Africa and South Asia.
UAE firms can now obtain bank loans against moveable assets as collateral
Ministry of Finance also announces creation of electronic registry to record assets to ensure project financing.
Companies in the UAE, especially small and medium businesses, can now secure bank loans by using their moveable properties as collateral in order to help them meet their cash-flow needs amidst tough situation due to the pandemic.
The UAE has issued Federal Law No.(4) of 2020, which expands the scope of including more assets that can be used as collateral and through other amendments that improve enforcement in the case of defaults.
Generally, small businesses find it tough to secure bank loans due to their size and lack of financial history.
The law will also strengthen the UAE’s competitiveness, ease of doing business ranking and attract more foreign direct investment.
Younis Haji Al Khoori, Under-secretary at the Ministry of Finance, also announced the creation of an electronic registry to record assets to ensure project financing. This register would allow the use of “tangible and intangible” moveable properties such as equipment and tools, receivables, cash flows, crops and others as collateral against obtaining loans.
He stressed that the law will have a significant positive impact on the nation’s economy, as it caters to recent developments in the scope of movable properties.
“This law will improve the ability of financial institutions to expand lending operations, and regulate current practices associated with them. It also addresses the associated risks, and regulates the relationship between banks, institutions and companies, to ensure the rights of all parties,” he added.
He pointed out that the provisions listed in this law cover most of the World Bank’s indices included in the Doing Business Report.