Commuters drive along Sheikh Zayed Road past commercial and residential properties in Dubai, United Arab Emirates.
Christopher Pike | Bloomberg | Getty Images
Dubai, United Arab Emirates – The United Arab Emirates has launched a number of economic stimulus and diversification programs to attract around $ 150 billion in new foreign investment over the next decade.
Fifty new projects and initiatives will be announced in the coming weeks, Emirates officials said on the country’s 50th anniversary, including new visas to attract residents and skilled workers.
“The UAE’s ambition for the next 50 years is to become a global player in various industries,” said Sarah Al Amiri, the United Arab Emirates’ first Minister of State for Advanced Sciences, to CNBC’s Dan Murphy on Sunday. “The region is what we have set our sights on for the past five decades; now we are going further to ensure that many of our sectors are competitive on a global scale.”
The country wants to invest more in advanced industrial sectors and technological education. Newly introduced changes include visa programs such as the Green Visa, which aims to expand self-employment status for qualified individuals and investors, and the Freelancer Visa, which allows the self-employed to sponsor themselves. The country has already introduced the 10-year golden visa, which is selectively awarded to highly qualified and selected residents and investors.
Visas are a mainstay of the UAE’s economy with nearly 90% of its 10 million residents living abroad. Traditionally, an expat resident without a job loses his visa; This was one reason nearly 10% of the country’s population left the country in the first year of the coronavirus pandemic.
The oil-rich desert sheikdom has worked to attract new capital and residents to help its economy recover from the blows inflicted on it by the pandemic that caused its economy to drop by 6 in 2020 1% shrank. Late last year it launched the Teleworker Visa, which allows individuals to live in the UAE for a year even if their employment is overseas, as long as they meet a certain income limit.
However, like many major announcements in the United Arab Emirates, the news of the 50 initiatives gave little detail without specifying when each of these programs would begin and what exactly they would entail.
Waiting for details
Employment law experts speaking to CNBC described the plans as a “significant and positive” move for the region’s economy.
“In the past, visa and work permit restrictions have made it difficult for companies to enter into more flexible, atypical work arrangements outside of the traditional employment model,” Kiersten Lucas, partner at Dubai-based Stephenson Harwood, told CNBC.
But companies are waiting for more details. “Businesses and individuals are eagerly awaiting further clarification from the authorities on how the new visas will work in practice,” said Laura Anderson, an employee of the same company.
She added that many employers want to know how the changes will give them “more flexibility to contract directly with individuals on a more traditional advisory basis” without being aware of the current legal obligations surrounding a company’s relations with its UAE workers to be bound.
Chris Payne, chief economist at Peninsula Real Estate based in the United Arab Emirates, described the move as strategic, although details are currently lacking.
“In the UAE it is recognition that expats are here for the long term, they are here to stay, and when you’ve gone through the economic cycle, when there’s a downturn, people who lose their jobs leave the country” Payne said on CNBC’s “Capital Connection” on Monday. “And that has an immediate effect on other companies, it has an obvious effect on the real estate market, and so this is being addressed gradually.”
“Often you only get the real details afterwards,” he said of the announcements on Sunday. “But the details will come … When we talk about the visa changes, they are all extremely positive, even if we wait for the details.”
Regional competition
This initiative also takes place amid a growing rivalry with neighboring Saudi Arabia for being the region’s commercial and business hub. United Arab Emirates – Dubai special – has long been considered the economic center of the region, supported by modern transport and logistics infrastructure and conveniently located at the intersection of east and west.
People walk past the official Dubai Expo 2020 sign near the sustainability pavilion in Dubai on January 16, 2021, hoping to strengthen its soft power and revive the economy will now open its doors in October 2021.
KARIM SAHIB | AFP | Getty Images
Last year, Saudi Arabia embarked on liberalizing economic reforms to attract more human capital and investment. And in February, she announced that her government would stop doing business with international companies whose regional headquarters are not based in the UK until 2024.
“Obviously, competition is a good thing in many cases and the UAE is responding by moving to the next level,” Payne said. “That has always been the UAE’s vision – that it is not only a GCC hub, but also a hub for South Asia with connections to East Africa and beyond South Asia also in East Asia. So if you look at some of these trade and investment announcements, that says well that we have competition within the GCC, but actually our vision goes beyond the GCC. “
“So it’s absolutely a response to what’s going on in Saudi Arabia, but it’s a positive response; it says, ‘We can rise to the challenge’.”
