The UAE has given the first indication of how it plans to shape the economy in a post-COVID-19 world – Go Big on Digital.
This will mean a “more active role for governments in the national economy”.
“The next phase will see a long-term stimulus plan to speed up recovery… and encourage investments in digital economy,” said Sultan Al Mansoori, UAE Economy Minister, in a statement issued by WAM.
And this digital economy would be built around 5G – the latest telecom infrastructure and in which local telecom have already committed significant investments into the rollout.
This will represent the second phase of the recovery plan – the first phase targets the private sector with incentives totaling Dh282.5 billion so far. Details are awaited on how these funds will be deployed.
These funds will come in handy for the “gradual opening” of the economy and businesses while “adhering to precautionary measures”.
The Dh282.5 billion will go to sectors most directly affected by the pandemic, as well as support SMEs. The funds will find their way to “beneficiaries through effective schemes and plans”, the statement added.
The sectors hardest hit by the virus outbreak include tourism, aviation, petrochemicals, retail and real estate. But there have been a few that have gained in prominence as well – those such as “technology, internet services, digital entertainment, e-commerce and food business”.
Market sources say that the government is handpicking the high priority sectors where it needs to commit significant investments for the future. “If real estate and infrastructure was the solution to emerge from the 2008 financial crisis, this time it’s investing in the digital economy and its infrastructure,” said a banker.
“Clearly, what the UAE committed into its digital and telecom networks has paid off during the pandemic lockdown. The future is about building on that.”