Sunday’s announcement by the United Arab Emirates was part of a large-scale plan to boost its economy and relax strict residency rules for foreigners. This is in line with its efforts to attract investment and improve its finances.
The plan of the nation to attract foreign talent over the next decade is a contrast to the other sheikhdoms in the Persian Gulf, which are becoming more protectionist as they seek to diversify their oil-bound economies.
The UAE celebrates its 50th anniversary and is looking to accelerate its social and economic reforms in order to rebrand itself for a post-pandemic world. The government portrayed the country as a vibrant, open-minded trade and finance center. It promised $13.6 billion in the next year, and $150 billion by 2030. Although specific projects are yet to be announced by the government, $1.36 billion has been allocated for Emirates Development Bank to support industrial sectors.
Thani al Zeyoudi, minister of state for international trade, stated in an interview that “We are building a new 50-year’s economy.” He added that openness and free trade have made UAE a significant global entity. “Anyone trying to be more conservative or trying to close their market, the value will be only in short-term, but they’re hurting their economies long-term.”
The UAE has been riven by friction with its neighbor Saudi Arabia. Saudi Arabia is a heavyweight and has adopted a new strategy under the young, brash Crown Prince Mohammed Bin Salman. Saudi Arabia has made billions of dollars in investments in tourist projects far away in an effort to prepare for the post-oil future. It also tried to reduce the role expats in order to increase the number of Saudis working in private sector.
In the UAE’s flashy economic developments on Sunday, there was a much more practical and dramatic change to the visa system. This governs the thousands of foreign workers from Africa and the Middle East who are the engine of the country’s economy.
Since independence of the UAE, the state has linked employment and residency status. This gives employers enormous power and forces people to leave immediately if they lose their job.
Al-Zeyoudi stated that “we want to rebuild the entire system… so the residency system attracts people and makes sure they feel the UAE their home.” “Openness is something we are proud of.”
Residents will have an additional three months to find other jobs after being fired. Parents can sponsor their children’s visas up to the age of 25. Visa restrictions for freelancers, widows, and divorcées are also eased under the new plans. This is a subtle change from the traditional Gulf Arab state’s view of its large foreign labor force as an “expensive underclass”.
Ministers stated that they hoped to double the UAE economy over the next decade by establishing major trade agreements with India, Turkey, and the United Kingdom. This follows a breakthrough agreement to normalize relations.
These new projects are coming as the UAE struggles to recover from the economic shock caused by the pandemic. Lockdowns and spending cuts led to the collapse of oil prices, and also a decline in tourism markets. According to government data, the country’s economy contracted by more than 6% in 2013. Credit agencies estimate that Dubai, the country’s tourist hub, suffered a further 11% decline.
The virus caused havoc in the economy, causing layoffs and a mass exodus of foreign workers. Authorities introduced a number of reforms last year to attract more capital and people. Dubai offered wealthy expats the opportunity to retire there. The UAE also granted a 10-year “golden Visa” to professionals and their families. A new law was passed to allow foreign ownership in companies that are not economically free.
These dramatic announcements are becoming more common in the Federation of Seven Sheikhdoms. However, the government has not provided any details on when and how it will fulfill its promises.