DUBAI, UAE —
The United Arab Emirates announced on Sunday a major plan to stimulate its economy and liberalize stringent residency rules for foreigners, as the country seeks to overhaul its finances and attract visitors and investment.
The nation’s plan to lure foreign talent over the next decades reflects an emerging contrast with the other sheikhdoms of the Persian Gulf that are growing increasingly protectionist as they try to diversify their oil-bound economies.
Now marking its 50th anniversary, the UAE is seeking to accelerate its economic and social reforms to rebrand for a post-pandemic future. Portraying the country as a liberal, bustling trade and finance hub, the government promised to pour $13.6 billion into the economy in the next year and $150 billion by 2030.
Specific projects have yet to be announced, but $1.36 billion has been earmarked for Emirates Development Bank to support the industrial sector.
“We are building the new 50 years’ economy,” Abdulla bin Touq, the economy minister, said in an interview, adding that free trade and openness have long made UAE a major global entrepot. “Anyone who is trying to be more conservative and trying to close their markets, the value is going to be only in the short term, but in the long term, they’re harming their economies.”
Friction has grown between the UAE and its heavyweight neighbor Saudi Arabia, which has taken a different strategy under the young and brash Crown Prince Mohammed bin Salman.
In a push to prepare for a post-oil future, the Saudi government has announced billions of dollars of investments in far-flung tourist projects and tried to diminish the role of expats to get more Saudis working in the private sector.
Buried within the raft of the UAE’s flashy economic development initiatives on Sunday was a far more practical — and drastic — change to the country’s visa system that governs the legions of foreign workers from Africa, the Middle East and elsewhere who power the country’s economy.
Since the UAE’s independence, the state has tied employment to residency status, lending employers outsized power and forcing people to immediately leave the country once they lost their jobs.
“We want to rebuild the whole system … so that the residency system is attracting people and making sure they feel the UAE is home for them,” bin Touq said. “Openness is something which we’re proud of.”
The new plans give residents an additional three months to seek other jobs after being fired, allow parents to sponsor their children’s visas until the age of 25, and ease visa restrictions on freelancers, widows and divorced people, among other things. It’s a subtle shift from the Gulf Arab state’s traditional way of treating its vast foreign labor force as an expendable underclass.
Ministers also said they sought to double the UAE’s economy in the next decade through major trade agreements with countries including Turkey, the United Kingdom and India, as well as Israel after a recent breakthrough deal to normalize relations.
The new projects come as the UAE reels from the economic shock of the pandemic, which triggered the collapse of oil prices and crucial tourism markets when lockdowns strangled business and authorities cut spending.
The country’s economy shrank 6.1 per cent last year, according to government data, with credit agencies estimating that the tourist hub of Dubai saw an even sharper decline of 11 per cent.
As the virus wrought havoc, with layoffs rippling across the economy and prompting an exodus of foreign workers, authorities last year introduced a series of reforms to draw more people and capital.
The UAE offered wealthier expats the chance to retire in Dubai, rolled out a 10-year “golden visa” to professionals and their families, and passed a new law to allow 100% foreign ownership of companies outside economic free zones.
Although such dramatic announcements have become common in the federation of seven sheikhdoms, the government has offered few details about how and when it will deliver on its promises.
OTTAWA – The Canadian economy was flat in August as high interest rates continued to weigh on consumers and businesses, while a preliminary estimate suggests it grew at an annualized rate of one per cent in the third quarter.
Statistics Canada’s gross domestic product report Thursday says growth in services-producing industries in August were offset by declines in goods-producing industries.
The manufacturing sector was the largest drag on the economy, followed by utilities, wholesale and trade and transportation and warehousing.
The report noted shutdowns at Canada’s two largest railways contributed to a decline in transportation and warehousing.
A preliminary estimate for September suggests real gross domestic product grew by 0.3 per cent.
Statistics Canada’s estimate for the third quarter is weaker than the Bank of Canada’s projection of 1.5 per cent annualized growth.
The latest economic figures suggest ongoing weakness in the Canadian economy, giving the central bank room to continue cutting interest rates.
But the size of that cut is still uncertain, with lots more data to come on inflation and the economy before the Bank of Canada’s next rate decision on Dec. 11.
“We don’t think this will ring any alarm bells for the (Bank of Canada) but it puts more emphasis on their fears around a weakening economy,” TD economist Marc Ercolao wrote.
The central bank has acknowledged repeatedly the economy is weak and that growth needs to pick back up.
Last week, the Bank of Canada delivered a half-percentage point interest rate cut in response to inflation returning to its two per cent target.
Governor Tiff Macklem wouldn’t say whether the central bank will follow up with another jumbo cut in December and instead said the central bank will take interest rate decisions one a time based on incoming economic data.
The central bank is expecting economic growth to rebound next year as rate cuts filter through the economy.
This report by The Canadian Press was first published Oct. 31, 2024
