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The Impact of Corona Virus in the U.A.E

-Related to the global economic situation

The Corona Virus also called COVID 19 has caused the global economy to nearly collapse. The virus

spread rapidly throughout the world within the span of a few months.

Although the government of UAE has taken strict actions against residents who do not follow the rules

and regulations put up to avoid the spread of the coronavirus, the virus has still managed to spread to a

great extent in the country. According to the data shown in the official website of the UAE

Department of Health the current figures show around 8200 confirmed cases in the UAE, out of which

there are 52 deaths and 6,640 active cases. The most affected group of people in the UAE are the

expatriates that account for more than half the population of the country. The corona virus pandemic

has caused many people to lose their jobs and worry about the security of their jobs since most sectors

of the UAE and globally are seeing a major fall.

In order to stop the spread, the government has demanded that all employees work from home except

for those who work in vital sectors without which the country cannot function. Few sectors in the UAE

are exempted from the curfew such as the construction sector, food supply outlets, healthcare sectors

etc. Even if these sectors are working, there a lot of safety measures and precautions taken to ensure

that the employees are safe such as checking temperatures before and after work. The UAE

government have always been dedicated to serving its people. The UAE government has aided both

residents and visitors in several ways. They have set up mobile testing centers for the safety and

convenience of the people in UAE Intensified restrictions have been made on the movement of people,

goods, and vehicles to stop the spread of the virus.

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Throughout the course of the pandemic, the UAE government has assured the people of the country

that the government will be with them throughout any hardships. This was proved right when the

government allowed both expired resident and visit visa holders to stay in the country till December

without having to pay overstay fines. The government also allowed a 10% discount in utility bills.

Massive companies like Majid Al Futtaim has contributed over AED 100 million, and three months of

a rent relief for retailers who were significantly impacted by the economic turndown. Some other

companies that are completely out of business have found other creative ways to save jobs of their

Figure 1 Air Arabia Shares takes the hit due to the COVID-19 outbreak
employees. For example, Vox staffs were asked to work at Carrefour since the demand for grocery

items are extremely high. This not only helped them from being completely income-less but also

helped Carrefour deal with the increasing customers with the sudden high demand for products. UAE

also launched a special committee dedicated to dealing with the economic impact of the virus. The

committee is responsible for making suggestions, proposing plans, and monitoring the implementation.

The government has also temporarily stopped operations of public transport systems. The current

economic situation of UAE when compared to other countries is not a total collapse. The government

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has been taking necessary actions to keep the economy in a good state despite the fall in the sales of all

sectors except a few.

UAE being home to the world’s fifth best airline as per the world airline awards, air transportation

contributes a major chunk to the nations GDP. Considering the current travel restrictions, airlines in

the UAE are incurring great losses. This may have direct impact on the total economy of UAE. Though

UAE has limited its travel options, the restrictions from other countries are also playing a major factor

in creating chaos. The government had initially urged residents to refrain from travelling and this had

immediate effect on the airline shares. Major companies such as Emirates and Air Arabia did see a fall

in shares. As seen in the figure below, Air Arabia faced a major fall in its shares in a matter of few

weeks.

Apart from the aviation sector, even retail sectors are seeing a drop of 40% in sales since customers are

not allowed to shop frequently and are only buying necessary items. A lot of events in the UAE have

been postponed or cancelled due to the virus outbreak. For example, the Cycle Tour of UAE had to be

cancelled because two Italians were tested positive. Other events that were postponed include many

major music concerts and technology conferences. Another significant hit is on the supply chain of

UAE. UAE being a major importer of goods from China finds it difficult to source materials and

products which causes a hike in local prices. The UAE’s major importing countries are India, China,

Japan, and Oman, all of which are impacted by the virus outbreak.

Although all sectors are hit by the virus, certain sectors are now facing greater demand than it ever did

such as healthcare and food related sectors. The International Monetary Fund (IMF) has predicted that

UAE and other neighboring countries will be able to bounce back from the economic hit quicker than

other countries in the region. Despite the current situation, IMF predicts UAE to see an increase in

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GDP by 3% in 2021. The government of UAE believes that the Expo 2020 will help boost the

economy once the epidemic is globally under control. Events that were postponed will happen again in

the coming year which means more people will have to visit the country. This will help bring tourism

in full swing again and thus, help boost the economy. Although the country will take a little longer to

get back to where it was, it is safe to say that the responsible government and citizens will do what it

takes to bounce back out of this economic fall. For a country that made cities out of sand, I too believe

that UAE will be able to come out of this pandemic stronger than ever.

References
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Population, total - United Arab Emirates. (n.d.). Retrieved April 22, 2020, from
https://data.worldbank.org/indicator/SP.POP.TOTL?locations=AE

The Impact of Coronavirus on the U.A.E Economy. (2020, April 07). Retrieved April 22, 2020, from
https://finance.yahoo.com/news/impact-coronavirus-u-e-economy-122717061.html

Digital, T. (n.d.). COVID-19. Retrieved April 22, 2020, from https://www.doh.gov.ae/covid-19

Abbas, W. (2020, April 14). UAE economy to rebound in 2021, grow 3.3%: IMF. Retrieved April 22,
2020, from https://www.khaleejtimes.com/coronavirus-pandemic/uae-economy-to-rebound-in-
2021-grow-33-imf

World Airline Award Winners 2019 | SKYTRAX. (n.d.). Retrieved April 22, 2020, from
https://www.worldairlineawards.com/award-winners-for-2019/

Nair, M., & Kumar, A. (2020, January 30). Coronavirus outbreak: UAE businesses feel the virus chill.
Retrieved April 22, 2020, from https://gulfnews.com/business/retail/coronavirus-outbreak-uae-
businesses-feel-the-virus-chill-1.69350790

How is the spread of Coronavirus Impacting Businesses in the UAE? (n.d.). Retrieved April 22, 2020,
from https://www.propartnergroup.com/blog/2020/03/coronavirus-impacting-businesses-uae/

Aiskandarani, N. (2020, March 29). Coronavirus is jeopardizing jobs. Retrieved April 22, 2020, from
https://www.thenational.ae/opinion/editorial/coronavirus-is-jeopardising-jobs-1.997239

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Kamath, A., & Fa. (n.d.). Committee announced to slow down coronavirus impact on the UAE
economy - MyBayut. Retrieved April 22, 2020, from
https://www.bayut.com/mybayut/coronavirus-imapct-economy-uae-announces-commitee/