Umm Al Quwain, one of the UAE's 7 emirates, issues royal decree increasing government salaries by 100 percent.
The UAE announced several changes to its visa guidelines in a number of categories, including for workers, students, and tourists. The government will allow people escaping or subject to political violence in their home countries to apply for a 1-year visa with the potential for extension, despite not being a signatory of the U.N. refugee convention.
The government of Abu Dhabi announced a $13.6 billion stimulus package aimed at supporting economic development over three years. Crown Prince Mohammed bin Zayed al-Nahyan instructed officials to draw up detailed plans for allocating the funds over the next 90 days. Abu Dhabi's economy has stagnated in recent years as a result of lower oil prices, as well as austerity measures taken by the government to curb the rise in deficits. The new stimulus package includes 10 initiatives designed to streamline bureaucratic regulations and facilitate the ease of doing business in the UAE.
The effects of the VAT are beginning to show in inflation. According to Abu Dhabi Commercial Bank, January UAE inflation data shows a marked strengthening with the introduction of 5% VAT. Headline inflation accelerated by 2.7% m-o-m in January (December: 0.7%) with the y-o-y rate rising to 4.8% rounded (December: 2.7%). The rise in prices was broad based, particularly in categories subject to VAT, including food and clothing.
by Karen E. Young Like the Bin Laden Group and Saudi Oger, Carillion has proved that the construction of megaprojects in the Gulf, however lucrative and central to state-led development plans, is full of pitfalls.
by Karen E. Young The Saudi, Bahraini, and Emirati efforts to isolate Qatar diplomatically and logistically from its Gulf Cooperation Council partners highlights structural weaknesses in many of the Gulf states, not just Qatar.
As a burgeoning global trend, economic nationalism is also surging in the Gulf states. What may be lost is the decade of efforts in economic integration and negotiations to make the GCC work as a common market, with complementary assets.
by Karen E. Young The beginning of the Trump administration points to, at the least, a heightened period of political and economic risk, which Gulf governments, financial institutions, and businesses will have to price, assess, and manage.
by Karen E. Young Trump’s pro-growth agenda will need partners, and the GCC states are also looking for investment partners in their diversification efforts and for placements for state-owned investment vehicles. It will be the politicization of these partnerships that will create the most risk.
by Diane Munro Abu Dhabi capped a year of unprecedented change at state oil company Abu Dhabi National Oil Company (ADNOC) with a landmark $2.2 billion share-swap with legacy partner BP. The unique model for a joint venture gives Abu Dhabi a 2 percent stake in BP in exchange for a 10 percent share in the country’s main onshore oil concession.
by Karen E. Young In the GCC, there is an effort to recalibrate the relationship between foreign workers and Gulf national economies, in both the reliance on foreign labor and the downward pressure it has on service sector salaries.
by Karen E. Young The new Trump administration will likely offer a more transactional view of U.S. foreign policy toward the Middle East, and specifically toward the Gulf states.
United Arab Emirates Cabinet approves bankruptcy law, expected to come into effect in 2017 pending presidential signature. The law is aimed at safeguarding the rights of creditors and debtors in insolvency situations, including measures that prioritize secured creditor rights, and enable companies to restructure without unanimous creditor approval.
by Karen E. Young The GCC states have drastically reduced fuel subsidies, however have yet benefit from deficit relief.
by Karen E. Young Oil and gas producing states in the region have started to sell off their assets in order to offset the declining energy prices.