UAE spents $105bn for economy to tackle pandemic crisis

The UAE has released more than $105 billion (Dh388 billion) in economic support packages to effectively combat the COVID-19 pandemic losses.

The government set up a committee to encourage development by administering and overseeing economic activities. The UAE Central Bank launched the Targeted Economic Support Scheme (TESS) to boost the financial and banking sector, as the global economy weakened due to the pandemic.

The commercial companies’ law was reformed and the requirement for onshore companies to have an Emirati shareholder was removed. Other initiatives include amending commercial transactions and bankruptcy laws and granting grants and benefits to tourism companies. The $13 billion (Dh50 billion) Tess program provided zero-cost collateral financing to banks to promote lending to the wider economy. It was extended to June 30 next year.

“These measures have contributed to business continuity, increased momentum of commercial activities, and have strengthened their ability to grow and compete in various vital sectors. Our efforts will continue with the concerned partners during the coming period to complete the implementation according to the timeframe specified for each stage. More than 310,000 persons, around 10,000 small and medium-sized enterprises, and more than 1,500 private sector companies benefited from the scheme. The first phase of the financial recovery plan is more than 46 percent complete.”

Saif Al-Shamsi, Deputy Governor of the UAE Central Bank said, “We have successfully implemented the Central Bank’s comprehensive targeted economic support plan that helped the financial sector manage its liquidity and supported individual customers and companies affected by the repercussions of the COVID-19 pandemic.”

“From January 1, 2021, banks and financing companies benefiting from the zero-cost central bank facilities will be able to grant new loans and facilities to their clients economically affected by the epidemic,” he further added.

The pandemic disrupted global trade and led the world economy to its deepest recession since the Great Depression. The International Monetary Fund (IMF) predicts that the world economy will shrink by 4.4 percent this year before making a slow recovery in 2021.