On policies to stimulate growth, trade and technology transferHow has the Covid-19 pandemic impacted the development of small and medium-sized enterprises (SMEs) in Abu Dhabi?
MOHAMED HELAL AL MHEIRI: The chamber surveyed its members about the impact of the pandemic on their businesses, and the results showed that the main challenges SMEs faced were related to liquidity, payments to suppliers and employees, and technological readiness. It is worth noting that a significant number of SMEs were equipped with the necessary technological tools to combat the economic effects of the pandemic and were able to operate remotely. However, many local SMEs realised the need to invest in digital tools, expediting the digitalisation process – which the chamber had been encouraging even before the pandemic.
The UAE government supported local SMEs with a Dh156m ($42.5m) economic stimulus package, and Abu Dhabi enacted an additional stimulus programme for SMEs by backing credit guarantees, reducing bank fees and implementing rental rebate. Abu Dhabi also accelerated the Ghadan 21 initiative to provide further support. The emirate waived more than Dh250m ($68.1m) in government penalty fees for businesses and issued other financial incentives. The Ma’an Social Investment Fund – the Abu Dhabi government’s channel for receiving contributions from the public and private sector, which falls under the umbrella of Ghadan 21 – also played a key role in supporting businesses and individuals alike.
To what extent will the decision to allow 100% foreign ownership of local companies impact investment flows?
AL MHEIRI: According to the UN Conference on Trade and Development, the UAE attracted $13.7m in foreign direct investment (FDI) in 2019, outperforming its GCC peers. This highlighted the rising interest in the UAE as an investment destination. In the medium to long run the federal government’s decision to allow full foreign ownership will be beneficial to the chamber’s members, foreign investors and end consumers in the UAE. This move will increase competition across the private sector, improve the quality of the goods and services on offer, and motivate companies to adopt international best practices.
The decision will also facilitate job creation and the recruitment of local employees to the private sector. It is expected that technology transfer will be accelerated, as companies with know-how in vertical farming, waste management, renewable energy, 3D printing and other segments relocate to the UAE. In a similar vein, the country has introduced a citizenship programme to attract and retain global talent.
Where do you see opportunities for economic and technological cooperation with Israel?
AL MHEIRI: There is significant business potential for the UAE and Israel in sectors such as trade, health care and oil. Also, another major objective of our relationship is research and development (R&D): Israel spends a considerable amount – around 5% of GDP – on R&D. Tourism is another important sector for both countries, where mutual growth presents various opportunities in both outward and inward FDI. We also look forward to collaboration on clean energy, technology, water management, food security and agri-tech.
It is estimated that trade between the two countries will reach between $500m and $1bn in the coming years. The chamber signed a memorandum of understanding with the Federation of Israeli Chambers of Commerce, and we have already organised a number of digital and in-person delegations of Emirati and Israeli businesspeople – with keen interest from both sides.
In what ways did the chamber adapt its operations to continue serving members during the pandemic?
AL MHEIRI: The chamber focused on employee safety and implemented remote-working policies as soon as the pandemic began, providing staff with the technical tools needed to support customers remotely. Handling the transition was a challenging task, but we implemented procedures to manage our workflow remotely and smoothly.
Right before the lockdown in March 2020 the organisation digitalised 100% of its services to minimise disruption to our members and general operations, including the issuance of certificates of origin – an important service needed for export and re-export purposes. This was a major change in strategy, but it contributed to supporting members and avoiding delays. Our mobile app also provided the full range of chamber services.
While the shift was not initially easy for chamber members, as of mid-2021 more than half of members were using our online services. We aim to increase this figure gradually through additional training, dedicated seminars, direct outreach and updated user manuals.
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