We’re now in Phase 2 of Covid-19 in Dubai. The urgency of complete lockdowns has abated. Things are opening up. Yet, the spectre of the virus continues to haunt us. And while some restrictions are easing, many industries haven’t even yet started down the road to recovery.
And that leads to economic uncertainty – not just here but all over the world. After all, Covid-19 is expected to cause a recession of the sort the globe hasn’t seen since World War II. What does that mean for us, here in Dubai?
I have skin in the game. I’ve thought about multiple outcomes —from the vantage point of a long-term expat, and also as a business owner who has more than one operating concern here. And after weighing the evidence, and taking into account the city’s track record, I’ve come to a rather simple conclusion:
Dubai is, by virtue of its many merits, one of the world’s most ideally-situated places to ride out the Covid-19 crisis.
I like facts. I value evidence. I’m not in the habit of sweeping hyperbole. So allow me to substantiate my claim.
When I say Dubai is ideally-situated, I start with geography. Our city sits on the nexus of routes linking East and West. The traffic between Europe and Asia was running down the Gulf and using Dubai as a pit-stop long before the city’s modern reincarnation. Since the 1900s, Dubai has hands-down been the busiest entrepot in the region. Global traffic needs a hub in this geographical region. And at present, there’s no real contender except for Dubai. The fact is – the world needs a Dubai. The minute flights start in earnest, they’ll route through Dubai. Ditto for trade - in everything from luxury goods to necessary commodities.
Then, let’s take a look at Dubai’s history of bouncing back from challenges. Consider the Great Recession of 2008. Lessons were learnt, and mechanisms were put into place. Through dint of restructuring and ambitious fiscal policy, the ship of commerce was righted and continued to sail on. Or look further back – when the creek was dredged against popular opinion to allow larger vessels to ply their trade. Or when Jebel Ali Port was built far out in what was then just desert – with a vision that the world’s ships would one day come calling.
But why even consider history when the past few monthsare such an excellent example? In the face of Covid-19, Dubai moved fast, and with purpose. Lockdowns were stern, but a move permit system – implemented rapidly – was responsive and adroit. And there were daily adjustments to guidelines and regulations to help us all live our lives as much as possible while clamping down on viral spread. The result: a rate of infection that was brought under control, leading to the possibility of economic activity resuming.
Dubai’s Covid-19 management was world-class, and first-world. The city has comprehensively outperformed many of its counterparts in the developed world. The point is — Dubai has time and again shown a mix of ambition and resilience that turns challenges into brand new starts. It’s helped by its manageable size and the forward role that government plays in setting policy and agenda – allowing for rapid co-ordinated responses.
It’s this rapid co-ordinated government response that will help us navigate our current challenges. And we’ll see it through a programme of government spending and expansionary fiscal policies, where public sector entities and quasi-government concerns act as primary buyers. New demand will percolate through the economy, easing cash flow and creating new economy activity. A rising tide, they say, lifts all boats.
It’s been done before. As far back as 1933, US PresidentFranklin D. Roosevelt launched his “New Deal” – a comprehensive programme of public works and reform to lift his country out of the Great Depression. Much later, in the Great Recession of 2008/09, the UAE government stepped in to stir the waters of economic activity.
Now, expect to see another New Deal – but one where infrastructure spend takes a back seat to spending on digital projects. Where money goes to innovation, instead of new roads. Or to mega events that gather the world – such as Expo 2021. Dubai’s physical infrastructure is already superb. The time now is to consider supercharge investment in creativity, innovation, digital assets, entrepreneurial hubs and world-class intellectual property.
I’m not saying there aren’t still challenges. Covid-19 isn’t over. Consumer confidence has taken a beating. And as with all hub cities, circumstances that impact the world have an outsized influence on us here, given that sectors such as trade, tourism, hospitality and events are often quite correlated.
But I would trust Dubai, more than any place else in the world, to find cogent, ambitious and perhaps unexpected answers to these challenges. During uncertain times, there’s no place I’d rather be.
Prajit Arora is the Managing Director at Sentinel Business Centres.