DUBAI: The world is facing myriad of crises due to covid-19, novel to the world. The situation is rapidly heading to ‘Global Corona Recession’, much deeper than the previous recessions that hit the global economy hard. Moody’s in recent report expects borrowers in the tourism, transportation, trade and real estate sectors to be the most affected, and small and medium enterprises (SMEs) to be particularly vulnerable to economic shocks.
Samana Group CEO stresses on interim economic reforms to fight crises stressed a set of economic cushions to mitigate the impact of covid-19 on the economy.
He said freezing VAT, interest-rate, road toll, Dubai Land Department (DLD) fee on property purchase, property mortgage cap, vehicle registration fee, home internet charges and lifting ban on VoIP calling for the next three months will greatly help the economy keep moving, safeguarding Expo 2020 and the UAE resident retention.
To fight coronavirus impact, IMF has decided a $1 trillion lending capacity and GCC states allocated $197.36 billion to stimulate their shaky economies.
To give relief to the residents, Dubai’s Sheikh Hamdan has approved 10% reduction in Dewa bill for commercial and residential for the next three months, Abu Dhabi has stopped road toll for all types of vehicles until the end of 2020. Countries discouraged travel and imposed bans to avoid people-to-people contact.
Beside economic packages, the UAE government has taken stringent steps to control the spread of coronavirus. UAE are the only country in Middle East which has affectively dealing with crisis
Imran suggests to UAE government that real estate sector could be given a better cushion as it is a key revenue stream of the UAE economy. He said mortgages could be relaxed – maybe up to 90%, which he asserts will reactive the property market here and will give a required relief to developers, investors and end-users alike. Dubai Land Department fee waiver will support the developers and end-users.
Banks, he said, can start moving again if interest-rate could bring down to zero, just for the next 3 months. VAT is a major disturbing factor for UAE’s private sector. It could be exempted for some time to give stimulus to the currently frozen businesses.
On general public front, UAE can win the hearts of millions of resident by lifting ban on VoIP calling – a longstanding need of the people living in the country. Free calling will people cope with the social and economic situation.
As part of visa reform, UAE could introduce zero fee for new employment visas for the next three months. It will help both employers and employee in terms of retention and workflow.
Imran Farooq believes the above set of economic measures will help recover and bring the economy back on track.