DUBAI, United Arab Emirates — The United Arab Emirates has launched a series of programs to stimulate and diversify its economy, seeking to attract some $150 billion in new foreign investment in the coming decade.
Fifty new projects and initiatives will be announced in the coming weeks, Emirati officials said, to coincide with the country’s 50th anniversary, including new visas to attract residents and skilled workers.
“The UAE’s drive for the next 50 years is to become a global player across different industries,” Sarah Al Amiri, the UAE’s first Minister of State for Advanced Sciences, told CNBC’s Dan Murphy on Sunday. “The region is what we’ve been targeting for the past five decades; now we’re moving on to ensure that a lot of our sectors are competitive on a global level.”
The country aims to invest more heavily in advanced industry sectors and technology education. Newly introduced changes include visa schemes like the Green Visa, which is meant to expand self-residency status for skilled individuals and investors, and the Freelancers Visa, which will enable the self-employed to sponsor themselves. The country has already introduced the 10-year Golden Visa, granted selectively to the highly skilled and select residents and investors.
Visas are a core pillar of the UAE economy as nearly 90% of its population of 10 million are expatriates. Traditionally, without a job, an expat resident loses their visa; this was a reason behind nearly 10% of the country’s population leaving over the first year of the coronavirus pandemic.
The oil-rich desert sheikhdom has been working to bring in new capital and residents to help its economy rebound from the blows dealt to it by the pandemic, which led its economy to shrink 6.1% in 2020. Late last year it launched the remote worker visa, which allows individuals to live in the UAE for one year even if their employment is overseas, as long as they meet a certain earnings threshold.
Like many major announcements in the UAE, however, the news of the 50 initiatives was light on details, with no specifics yet as to when each of these programs will begin and exactly what they will entail.
Awaiting specifics
Employment law specialists who spoke to CNBC described the plans as a “significant and positive” step for business in the region.
“Historically, largely due to visa and work permit restrictions, it has been difficult for companies to operate more flexible, atypical working arrangements outside the traditional employment model,” Kiersten Lucas, a partner at Dubai-based firm Stephenson Harwood, told CNBC.
But companies are awaiting more specifics. “Businesses and individuals alike will keenly await further clarity from the authorities on how the new visas will operate in practice,” Laura Anderson, an associate at the same firm, said.
She added that many employers will want to know the extent to which the changes “give them increased flexibility to contract directly with individuals on a more traditional consultancy basis” without being bound by the current legal obligations surrounding a company’s relationship to their employees in the UAE.
Chris Payne, chief economist at UAE-based Peninsula Real Estate, described the move as strategic despite currently lacking in details.
“It’s a recognition in the UAE that expats are here for the long-term, they’re here to stay, and when you have though the economic cycle, when you have a downturn, people who lose their jobs leave the country,” Payne told CNBC’s “Capital Connection” on Monday. “And that immediately impacts other businesses, it impacts the real estate market quite obviously, and that’s why bit by bit that is being addressed.”
“It’s often afterwards that you get the real detail on it,” he said of Sunday’s announcements. “But the details will come … If we talk about the visa changes, they’re all extremely positive even as we wait for the details.”
Regional competition
This initiative also comes amid a growing rivalry with neighboring Saudi Arabia to be the region’s trade and business hub. The UAE — Dubai specifically — has long been seen as the commercial center of the region, buoyed by modern transport and logistics infrastructure and conveniently positioned at the crossroads of east and west.
In the last year, Saudi Arabia has launched liberalizing economic reforms in an effort to draw more human capital and investment. And in February it announced that its government would cease doing business with any international companies whose regional headquarters were not based within the kingdom by 2024. The move was widely perceived to be a direct shot at Dubai’s business primacy in the region.
“Competition is obviously a good thing in many cases, and the UAE are responding to that by moving themselves onto the next stage,” Payne said. “This has always been the UAE’s vision — that it’s not just a GCC hub, it’s a hub for South Asia, connecting into East Africa, and beyond South Asia, in East Asia as well. So if you look at some of these announcements regarding trade and investment, it’s saying well, we have competition within the GCC, but actually our vision goes beyond the GCC.”
“So absolutely it’s a response to what’s been going on in Saudi Arabia, but it’s a positive response; it’s saying ‘we can rise to the challenge’.”