Accelerating decarbonization and digitalization may build upon the UAE's game-changing reforms

Adjusting to Covid19 has defined the year 2020 via partial or total lockdowns, working at home, stalling global trade, expenditure, and tourism, to the positive of cleaner air.

Hopes of a good V-shaped restoration diminished with a new Covid variant surging and consequent lockdowns. Yet, despite the Great Lockdown producing a deep recession, marketplaces are exuberant expecting the creation, distribution and rollout of multiple vaccines to create a path to near normalcy in 2021.

Unlike the 2008-2009 global financial meltdown, which began as a housing bubble and demand shock, the Covid global health crisis began as a source shock, disrupting global supply chains, and then spilling over to the demand side hitting trade, tourism, consumption.

Presented the widespread impact of the pandemic and despite concerted financial and fiscal stimulus equivalent to 12 per cent of global gross domestic merchandise, not only will the street to recovery be much longer, however the cumulative output damage will be much larger than with the global financial meltdown, with long-term scaring of labour marketplaces and economies.

In the wake of a demand-induced oil cost shock and the global lockdown, the UAE’s combined monetary, fiscal and health stimulus package deal (equal to 18 % of GDP) cushioned the economy. Following weeks of movement restrictions and stringent health methods, the UAE’s public wellness system proved effective and resilient, and can re-open sooner than its regional peers.

While maintaining social distancing and applying Covid19 protocols to keep carefully the community safe and sound, the UAE re-opened offices, businesses, allowed the entry of visitors and successfully held combined virtual and in-person events and conferences. This bodes very well for the delayed Dubai Expo 2020 and resumption of tourism.

With the reverberations of Covid19 - the UAE’s policy makers’ large number of major coverage reforms were i'm all over this - from the overall game changing 100 % foreign ownership of businesses, facilitating remote doing work, to retirement and 10-year residency visas for skilled pros in the quest to become a knowledge based, impressive economy. Liberalisation, facilitating rights of establishment and industry gain access to reforms will attract overseas purchase, capital flows to the true estate market, while slowly but surely enhancing abilities in the labour drive supporting innovation and efficiency growth.

With energy industry volatility and lingering uncertainty from Covid19 on the world economy, what activities can drive an monetary recovery in 2021 and underlie medium term growth leads? For GCC oil manufacturers de-risking fossil gas assets by carrying out a approach of part-privatising and public-private-partnerships (PPP) in strength reserves, upstream and downstream and related infrastructure such as for example pipelines is important. This has started out with Adnoc and Aramco.

With the price tag on oil to achieve a balanced budget staying greater than current oil rates, deficit financing instruments ought to be developed by governments. We can expect new federal government bonds to be issued in 2021 which will encourage more corporate relationship issuances and private debts placements.

The UAE is accelerating its decarbonisation efforts, concentrating on energy efficiency, transitioning to renewable energy, building on its leadership in renewable energy projects and climate risk mitigation and adaptation investments. Greater expenditure in AgriTech for meals security which includes sustainable vertical farming and desert agriculture should take place in tandem with the sustainability and strength efficiency get. Decarbonisation and diversifying the strength mix will support the expansion of the UAE’s capital market segments through the issuance of Green Bonds and Sukuk, funding of PPP and privatisation bargains for renewable strength and clean tech. Certainly, the UAE may become a regional if not a global center for renewable energy financing.

Covid19 has given a strong impetus to digitalisation as working from home, learning from your home became mainstream. The UAE should build on its strong e-commerce and e-services basic by massively investing and rolling out 5G to aid IOT and building clever cities and infrastructure. That is critical for the retail sector to move online from offline. Liberalising the telecom sector and reducing the expenses of broadband services can help the UAE turn into a fully digitalised market and a regional hub for digital solutions.

The UAE has built top notch core infrastructure and services in transport and logistics, power and telecom. These infrastructure assets can serve infrastructure poor countries in your community, from East and Central Africa to India, Pakistan and Central Asia. Energy from solar power can be exported through cross-country integrated grids.

Finally, the UAE's normalisation of relations with Israel heralds a fresh regional economic geography: new trade and investment opportunities, in addition to a reduced amount of geopolitical tensions.