What have been the most significant initiatives that the Ministry of Economy has recently overseen?
The UAE has adopted a pioneering, flexible, and open economic policy in order to build a diversified, sustainable, and highly competitive economy based on knowledge, innovation, technology, and R&D, in line with the UAE Vision 2021. In this regard, the issuance of the new FDI law by the UAE is of great significance in terms of incentives provided to foreign investors in the country. The new law allows up to 100% foreign ownership of companies in selected economic sectors, including agriculture, industry and services, innovation, technology, scientific research, and other creative fields. Most recently, the introduction of the “golden card" permanent residency scheme by the UAE government grants long-term residency status to investors, businesspeople, and talented professionals. To further complement these efforts, local governments at the Emirate level have launched new packages of incentives and facilities to attract investment inflows to vital sectors. Among the most prominent of government decisions taken recently to stimulate and enhance the country's business environment is the cancellation of a mandatory bank guarantee for private sector companies once their employees' residence permits are confirmed. Instead, the new system of employment insurance will be worth AED60 annually, instead of AED3,000 for the previous bank guarantee. Apart from exempting transit tourists from all fees for the first 48 hours, facilities have been granted for those wishing to obtain employment opportunities in the country, through a temporary residency permit for a period of six months without fees. Additionally granted is a provision for talented students to extend their residency for two years after graduation, which will allow them to explore their future options in the country.
How does the rising level of trade protectionism throughout the world affect the strategic planning of the ministry?
Protectionist trade policies have adverse effects on global trade in general, and we are not immune to it. Considering its strong partnerships with the US and China, the UAE is keen to remain impartial, and we earnestly hope that consensus will be reached to curb this trend because it hinders global trade prosperity that benefits all parties. The UAE remains committed to pursuing a policy of openness and partnership with various countries. This approach is based on our strong belief in the values of openness and eradicating barriers, which will enable us to protect the country's commercial interests, thereby limiting the impact of these tensions on the UAE's economy. Simultaneously, we will continue to work with friendly and partner countries to revoke trade restrictions through bilateral, regional, or global legislation and agreements. Exploration of new economic destinations and diverse markets to increase exports, promote re-exports, diversify destinations for imports to build stronger trade partnerships, and further economic cooperation is another major focus area. In addition, we are continuing our efforts to find solutions to the problems arising from protectionist policies through consultative channels and mechanisms adopted by the WTO. As for the steps taken to facilitate the access of exports to international markets, the Ministry of Economy supports the movement of Emirati goods to foreign markets through the National Committee for Export Development, which has the membership of all federal and local authorities concerned with this vital sector. The ministry also participates in many meetings and platforms, most notably joint economic committees, which bring countries together with trade partners in order to enable the private sector to explore trade opportunities and new markets, and successfully address challenges.
Over the next decade, what role do you see the UAE playing in the Belt and Road Initiative (BRI), and what advantages will this bring to the national economy?
Since the BRI's inception, the UAE has been actively participating in all forums and activities associated with it. China's foreign trade with countries along the BRI reached approximately USD298.2 billion in 1Q2019, up 7.8% from 2019 and accounting for nearly 28.6% of China's total foreign trade in 1Q2019. A number of promising development projects have been announced in connection with the BRI as well. Furthermore, the UAE's expertise and accumulated experience in the field of logistics services and successful experiences in areas such as free zones, infrastructure, and port management are also being leveraged to ensure the success of these projects. China has invested nearly USD64 billion in countries located along the BRI between 2014 and 2017. These investments are spread across 50 countries in Asia, Africa and Europe, with two of the mega projects in the UAE. The projects are Traders Market, an international station for the BRI in Dubai with USD2.4 billion of Chinese investments, and Vegetable Basket in Dubai, worth USD1 billion. The UAE recently launched the World Logistics Passport initiative to open new paths for trade between the East and the West and enhance Dubai's and the UAE's ability to support global trade and economy. It will position Dubai as the capital of the new economy in the region and will help accomplish the ambitious target of generating USD2 trillion in revenue in Dubai's non-oil foreign trade by 2025. The initiative will help achieve these goals by boosting trade and enhancing demand for the UAE's national exports, services, and integrated transportation systems and will contribute to the efforts to implement the BRI.
SMEs are playing an increasingly central role in the development of the knowledge-based economy. How does the ministry work to encourage and support UAE-based entrepreneurs, start-ups, and SMEs?
The pace of development of the UAE's SME sector is characterized by the adoption of international best practices and establishment of strategic partnerships with developed countries. These efforts have successfully linked SMEs and all economic sectors through federal and local specialized institutions and have resulted in strong partnerships with the private sector. This in turn has contributed to building an integrated SME ecosystem that focuses on commercial production through multiple economic activities that form the basis of smart transformation. Based on state data, the contribution of the SME sector to the country's GDP for 2018 is estimated at 53%, up from about 49% in 2019. SMEs also play a significant role in sup- porting the country's economic diversification, as evidenced by their 70.5% contribution of non-oil sectors to GDP in 2017. With intensified diversification efforts, this figure is set to rise to 80% over the coming years. It is clear that the sector will continue to be a major driver in advancing the country's diversification policy. The ministry is keen to support all initiatives for the sector and launch more privileges and incentives to encourage entrepreneurs of SMEs and start-ups. To help raise early stage venture capital or seed-funding to start businesses or to expand operations by showcasing revenue and growth potential to investors, 'AIM Start-up' was launched as part of Annual Investment Meeting (AIM) in Dubai. This international competition for emerging projects helps them showcase internationally. Besides, AIM provides a dedicated platform to connect entrepreneurs with investors. The initiative 'Emirates Initial Investors Association' was established to invest in emerging companies across all sectors, especially in the field of innovation and technology.