The Impact of COVID-19 on doing business in the UAE

Organisations and employees across the world are bracing themselves during these unprecedented times.

Many governments including the UAE understood the severity of the situation very early on and responded proactively, were highly organized, strategic, and technologically advanced in conducted activities in a phased manner, whilst keeping a close eye on developments around the world and the advice of WHO.

When the Coronavirus hit the world in the beginning of 2020, whilst some countries were grappling to comprehend the situation, some taking a very slow laid back/denial approach, others not really knowing how to react, businesses and individuals based in the UAE felt very safe and assured as the UAE took pivotal steps to combat and minimize the risk to its residents, even before WHO announced COVIID-19 as a global pandemic on 11 March 2020.

UAE was one of the first countries to take action to control the spread of COVID-19 by preponing the school Spring/Easter holidays which were originally scheduled for end of March, thus closing all schools from 8 March 2020 and recommended isolation to all its residents.

UAE government offices opening hours were reduced, shopping malls timings were reduced in the first instance. On a phased basis, all event organisers planning large events/conferences were requested to place them on hold. Training and educational institutions were asked to close their doors, followed by halting of transportation systems such as the Metro and Tram systems in Dubai.

Within another week or so, stricter social distancing regulations were issued for all residents to comply with, followed by lockdown at evenings for disinfection campaigns, which was subsequently extended to 24 hour strict lockdown until 18 April, subject to renewal. A permit system was introduced by the Police to allow residents to leave home for essentials only such as food and medicines, and those working in the front line professions such as healthcare, rubbish collection, food delivery services etc. When leaving the house, those with permits must leave wearing masks and gloves. There have been numerous police check points established to ensure compliance.

There have been regular updates from the government through official media channels in Arabic and English. Anyone not complying with the regulations is being issued hefty fines and those individuals violating the quarantine rules are informed that they will be dealt with strict legal consequences, including being asked to leave the country.

As a result of these strict measures and communications, there was no panic buying, like we saw in some other countries. Everyone was very civilized, calm and followed government guidance and instructions. A few items such as face masks did sell out very early on by mid-March, but that was understandable. There was no shortage of food, or basic amenities and the government reassured everyone to be safe, stay home and that there should be no areas of concern as supermarkets and pharmacies remain well stocked on the whole. Everyone started moving to working from home and in a few weeks everyone started providing services online, from meetings, to trainings, to virtual coffees, to even conferences!

Understandably, with cancelled events, conferences, trainings, restricted trading, closed air space, has meant businesses have been affected drastically, especially small and medium sized enterprises (SMEs). According to the UAE Ministry of Economy, the SME sector represents more than 98 per cent of the total number of companies operating in the UAE and contributes towards 52 percent of the non-oil GDP.

Most organisations decided to send employees home on paid leave, some sent employees on unpaid leave, and some have had to ask employees to agree up to 50% salary reduction and some have unfortunately have had no alternative but to terminate some of their employees, due to the sheer financial impact on the business of COVID-19.

Businesses in the UAE have been given generous support through UAE government stimulus packages with reduction in cost of doing business from 25-98%, to encourage and ease of business in investment, production, trade, import, export and innovation, which have gone a long way to ease the impact.

The UAE government has also provided a consolidated platform for, UAE residents based in the UAE holding a residence visa and who are unemployed as a result of COVID-19 to apply for jobs on the Virtual Labour Market Portal.  Employers have been asked to publish their vacancies on this portal with vacancies ring fenced to UAE residence visa holders.

Majority of the schools in the UAE are private, mostly paid for by parents directly themselves. The pandemic has had a vast impact on many parents ability to continue to pay schools fees for their child(ren). With the schools being closed, parents have had to oversee, support and even manage the home learning of their children online. Many schools and education group owners have recognised this and taking into account the financial impact on household incomes, they have responded with much needed support. Some have reduced their school fees from 20-30% for the final term of the academic year, with some schools deciding to offer directly affected parents only, through means tested support for the final school term.

The UAE utility companies have also reduced the price of electricity and water to relieve the impact on home and business owners during the pandemic.

The UAE has also launched a short certification course for residents to attend online and learn and be certified as an ‘MBRU Community Immunity Ambassador Program’ from the Muhammed Bin Rashid University of Medicine and Health Sciences. This ensures not only official approved education on COVID-19 to its residents, encourages individuals to follow the quarantine rules for themselves, their family members and community, whilst helping the country in its efforts to combat the pandemic.

UAE residents and businesses have been working together in solidarity to fight this pandemic. Many UAE businesses have announced abundant support, such as financial funding, production of essential medical equipment such as face masks, providing manpower support for disinfection programmes across the country, free fuel to vehicles and equipment used to combat the virus in the country, donating essential medical equipment such as hand sanitizers to front line workers such as healthcare providers and the police and providing free meals to workers and volunteers working throughout the country on the national disinfection programme. Public hospitals, private hospitals and hotels are also being used to treat COVID-19 patients and more are being created.

In addition, UAE residents have been pro-actively offered a access to an online initiative delivered by a team of over 50 Psychologists by a National Programme for Happiness and Wellbeing, to any individual feeling psychologically overwhelmed by the impact of the global COVID-19 pandemic.

Healthcare provision in the UAE is primarily private and provided and managed through a health insurance system. Health care insurance is provided to individuals largely by their employers. At the outset, the UAE announced that all residents would have access to free healthcare should they show signs of and/or are tested positive for COVID-19 and that the hospitals and the government would fund these, even for UAE visitors without insurance.

Latest figures as of 12 April 2020, show that the UAE has 3,736 cases, with 20 deaths and 588 recovered. We are hoping that the expected rise will be stable and the curve will flatten in the coming weeks and months.

The UAE as per Worldometer website is number 3 in the world for its highest number of COVID-19 tests conducted per million of population. There have been door to door testing drives in congested areas in some parts of Dubai to help control and reduce the number of cases. There have also been over 20 drive-through test centres implemented across Dubai. All of these initiatives combined appear to be working.

It should also be noted that the UAE has also been one of the hardest hit economically, as we were as a nation, looking forward to EXPO 2020 in October 2020, which has now been postponed to 2021.

With Ramadan starting in mid-April which is usually a quieter time for business in the UAE anyway, and the onset of the summer in another few weeks’ time post that, only time will tell whether all these initiatives will have a lasting impact and bring about normality soon. However, having seen how UAE came through stronger and wiser in 2009 post GFC, we are optimistic and have confidence in the UAE bouncing back again.

Businesses are understandably struggling during these difficult times, however we are seeing that those that actually walk the talk in terms of their values, had risk management in place, are agile and have already started to change the way they do business, along with the support of the government,  are already showing positive signs of survival.

If nothing else, this pandemic has brought people of the UAE closer, stronger and working in solidarity than ever before. They are more caring, more supportive. Individuals and organisations are providing free consulting services, free webinars, free coaching, volunteering and much more to SME’s and individuals that need it. The humanity, optimism combined with collaboration will help organisations, residents and UAE not just survive but thrive.

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood.” Theodore Roosevelt

The UAE has truly proven itself as a leader in crisis management and that we are truly #inittogether.

Stay safe, stay well and please stay home.

Farzana Kazemi, Executive Coach and HR Consultant – Trailblazer Consulting

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