COVID-19 impact: UAE may see V- and U-shaped recovery
UAE’s economy will probably see a combination of V- and U-shaped recovery following the impact of coronavirus pandemic, Abdullah Al Nuaimi, UAE’s Minister for Infrastructure Development, said on Thursday.
“My guess is it would be a combination of V- and U-shaped recovery. This pandemic is a worldwide issue and for the economy to get back (onto the track), the whole world has to recover. Now we have seen recovery in many countries. We also have seen similar things in UAE where more coronavirus cases are recovering and that is a good sign for us,” Al Nuaimi said.
As the coronavirus cases in the country are on the decline and some of the key sectors have also been opened to some extent, the UAE Central Bank on Wednesday said it expects economic recovery to begin in the second-half of this year.
“While recovery of economic activity is projected to commence in the second half of the year, recovery of economic sentiment will hinge on deploying policy support measures. The Targeted Economic Support Scheme (TESS) by CBUAE and the economic stimulus packages announced by both local and federal governments are likely to weigh in positively on the Purchasing Managers’ Index, real estate prices, employment and credit growth with a positive impact on the overall sentiment once the virus risks are under control,” the apex bank said in its first-quarter 2020 report released on Wednesday.
The Ministry of Infrastructure Development is managing over 100 projects worth around Dh20 billion which are in the development stage.
“Our projects have not been hampered while most projects in the world are affected by the pandemic. We have allocated Dh7 billion for the housing scheme in Ras Al Khaimah. So we have over Dh20 billion worth of projects together that are being managed by the ministry,” he said.
The minister, however, said there could be some delays but otherwise the projects are going fine.
“There are a couple of project that we should continue concentrating on. One of them is a housing scheme in Ras Al Khaimah. There are over 2,000 villas for nationals in the scheme and 1,000 of them are under construction. Another project is highway that is connecting north and west (of the country) and that project is almost at the end of duration,” he added.
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UAE hiring starts to pick up after sharp coronavirus fall
Hiring in the UAE has started to recover from a steep fall due to the coronavirus pandemic, according to data from Microsoft Corp’s professional networking site LinkedIn.
The number of people on LinkedIn saying they had secured a new job in the UAE fell sharply from early March but started to rise again from early May.
“We are seeing a cautious recovery. Hopefully the worst is behind us,” Ali Matar, LinkedIn’s head of Mena and emerging markets in Europe and Africa, told Reuters.
As a regional business and tourism hub where expatriates make up around 80 percent of the population, the UAE has been hit hard by restrictions to slow the virus’ spread.
Thousands appear to have lost jobs, had their pay cut, and returned, or intend to, to their home countries.
Hiring activities on LinkedIn, which counts around 4 million users in the UAE out of a professional working population of around 5 million, fell 40-44 percent year-on-year for the March to May period, Matar said.
Retail vacancies posted on the site during the period fell 63 percent year-on-year, with recreation and travel vacancies down 50 percent, media and communication down 30 percent and construction, which was already showing signs of weakness before the pandemic, down 15 percent.
Technology and software job postings have increased the most, by 66 percent, accelerating a trend in place before the pandemic, Matar said, while healthcare vacancies rose 28 percent.
The UAE’s non-oil private sector contracted for the fifth consecutive month in May, although at a slower pace than in April and March – which saw the biggest contraction on record.
“There is a recovery but it is going to take time,” Matar said.
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Companies can’t afford to sleep on cybersecurity
With an increasing number of businesses making the transition to go fully digital and online during the Covid-19 pandemic, security experts have cautioned that organisations should not treat cybersecurity protocols as a one off investment.
Maher Yamout, senior security researcher at Kaspersky, told Khaleej Times that as businesses scramble towards shifting their operations online, most of them fail to equip their employees with the cybersecurity training needed to protect themselves from cyber threats.
Kaspersky’s recent ‘How Covid-19 changed the way people work’ report, 73 percent of employees working from home have not yet received any specific cybersecurity awareness guidance or training designed to keep themselves secure from risks.
“As a result of these relaxed security measures, organisations are seeing an increase in security threats,” Yamout said. “In fact, 27 percent of employees have received phishing e-mails related to Covid-19 while working from home. Accidentally downloading malicious content from a phishing email could cause major losses to businesses data.”
Businesses, he said, have certainly faced a number of challenges during this unprecedented time. “It is important that while businesses encourage their employees to shift towards remote working that they also place a great deal of importance on cyber security to ensure that their corporate networks are protected. The increase in the number of users working on online resources and Virtual Private Networks (VPN) could cause a strain on networks causing IT departments to focus less on security. This gives cyber criminals the opportunity to exploit an insecure connection.”
He also added that businesses of all sizes, and individuals working from home, will continue to be a victim of such threats, at least till the pandemic pass.
Similarly, Sergii Marchenko, CIO at Securrency, a developer of institutional-grade blockchain-based financial and regulatory technology based in Abu Dhabi’s Hub71 tech ecosystem, said that the importance of cybersecurity to businesses cannot be overstated – whether that is during a period of financial growth, economic crisis, or in the current pandemic.
“The uptake in remote working triggered by the pandemic, which will likely continue for many individuals into both the medium and long-term, has particularly significant implications for business cybersecurity,” he said.
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Improving apps is a top business priority, experts say
Improving applications should be a top priority for businesses since they are a key element of the customer experience, experts said.
New research from Forrester and VMware, has revealed that 82 percent of global executives believe that customer experience is directly tied to revenue growth, and that 88 percent believe that customer experience can be improved by enhancing their application portfolios.
In addition, 78 percent of executives consider improving their applications a top business priority. However, many organisations have admitted to facing difficulties, with 48 percent saying that it has been more than a year since they made any improvements to their application portfolios, while 34 percent have either not started or are unsure whether work has begun. As a result, 46 percent admit they are only moderately effective, or worse, at delivering positive customer experiences.
“An organisation’s ability to adapt has most certainly been put to the test in 2020, and those that have found ways to use new apps to engage customers to maintain, if not boost, performance have become a differentiator,” said Rasheed Al Omari, principal business solutions strategist at VMware. “To move at the speed required, a digital foundation remains essential; to create, run, manage, connect and intrinsically protect those apps critical to adapting to 2020’s seismic business and employee shifts. The simpler it is to connect these dots, the more effectively businesses can drive relevant new services and customer experiences to adapt, survive and even thrive.”
When asked about the main reasons why application modernisation has not been prioritised, 76 percent of business executives pointed to a lack of funds, while 72 percent identified the difficulty of aligning strategy across multiple departments as a key reason. Also, 70 percent pointed to a resistance to change from IT teams. This stems from several IT-specific roadblocks such as too great of an existing investment in legacy applications, the difficulty of securing sensitive data, and a significant lack of staff expertise in cloud and edge computing.
Despite these challenges, the research also highlighted several improvements in the landscape, with 40 percent of executives noting that their enhanced portfolios identify increased revenue generation, while 37 percent said that they increased customer satisfaction, and 32 percent noted the acquisition of new customers.
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Dubai economy shows sign of recovery
The rate of decline in Dubai’s non-oil private sector economy slowed but endured a further downturn in May following the easing of some strict lockdown restrictions imposed since March combat the coronavirus pandemic, the latest purchasing managers’ survey revealed.
The IHS Markit Dubai Purchasing Managers’ Index increased to 46 in May from 41.7 in April but was still below the 50.0 mark that separates growth from contraction.
“While the Dubai PMI ticked up from the record low suffered in April, the latest survey data suggested economic conditions remain a long way from recovery in May,” said David Owen, economist at IHS Markit.
“Businesses highlighted that despite restrictions on economic activity being partly lifted, weak consumer demand and a slow market response stopped them from making headway into covering their losses,” said Owen.
“Subdued demand prompted further cuts to jobs, although the fall in employment did ease to the slowest rate seen during the pandemic. At the same time, the sentiment-led future output index signalled that firms remain unsure about the path to recovery. Activity is expected to improve in the year ahead, but it remains to be seen how long it will take for the Dubai economy to rebound following Covid-19,” said Owen.
Falls in both output and new orders softened in the latest survey data, leading to the slowest drop in employment for three months. Nonetheless, a weak demand environment meant that overall conditions remained subdued, while business confidence ticked up only gradually from April’s record low,” said the survey report.
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Coronavirus impact: UAE banks plan 10-15pc cut in workforce
In the UAE, hospitality, real estate, retail and professional services sector have mostly seen layoffs in the last few months since the outbreak of coronavirus.
“Financial services sector has started to make changes in headcount since last few weeks and we are anticipating 10-15 percent reduction in workforce. Once the head count correction is complete in financial services and energy sector, we may see more cuts in reward & benefits as well in these,” according to Vijay Gandhi, regional director, Korn Ferry.
International Labour Organisation has said that more than four out of five people (81 percent) in the global workforce of 3.3 billion are affected by full or partial workplace closures. It said large reductions are foreseen in the Arab states which is 8.1 percent or equivalent to 5 million full-time workers.
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Fighting coronavirus: hiring in UAE could pick up after september, say consultants
Majority of companies in the UAE will be adopting wait-and-watch approach for new recruitment, however the activity could pick up after the summer, say consultants.
“As organisations will look to hire post-summer from September, the flexible transfers do help but in vast majority of the cases, entities are going to ‘wait and watch’ before normal hiring activity starts,” according to Vijay Gandhi, regional director, Korn Ferry.
He noted that more jobs have been advertised and recruitment activity is picking up. However, the decision to hire is taking longer and job creation is taking 4-6 weeks from interview selection compared to 4-6 days in the past due to changes in work culture due to coronavirus Covid-19.
The new normalcy is returning in the country with economy opening up and firms going back to work 100 percent. However, the full impact of jobs will be visible during the summer, depending on the recovery to the new normal.
“We are seeing hiring activity in both routine jobs – such as drivers, logistics co-ordinators etc. – and professional roles – such as procurement, operations, learning and development etc. – in healthcare and e-commerce sectors,” he added.
Recruitment consultants say that employers should keep an eye for good talent and have the talent acquisition team actively looking for good profiles.
Akram Assaf, Chief Technology Officer, Bayt.com, has said that a large number of firms would be hit by coronavirus but he singled out Internet/e-commerce, distribution/logistics and software development which has good potential to grow.
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Coronavirus frustrates Saudi women’s push for financial independence
Abeer Al Howayan despaired of ever working after spending eight years trying to find a job that would put her chemistry degree to use in the Saudi Arabian town of Al Ula.
She eventually abandoned her scientific ambitions and turned to selling homemade cakes, before she was chosen last year for a government training programme to support a $20 billion flagship tourism project in the kingdom’s northwestern region.
The 31-year-old learned how to make artisanal soap from French experts flown in by Saudi authorities, and in late December started selling her creations at a booth near the rock-hewn tombs of Madain Saleh, site of an ancient civilisation.
She also started offering her wares online.
Then, coronavirus struck. Even after all her compromises, Al Howayan’s future is uncertain once again.
The pandemic has hammered Saudi Arabia’s nascent non-religious tourism industry – among the few new sectors to have emerged under Crown Prince Mohammed bin Salman’s drive to diversify the economy from oil and create millions of jobs.
“It is very tough, but I keep telling myself things will get better after corona. One has to remain optimistic,” Al Howayan, whose online business has also slowed, told Reuters.
Women in the United States and Europe have taken an outsized hit from the wave of unemployment caused by the coronavirus, but for women in Saudi Arabia the downturn is particularly damaging because it struck just as their efforts to enter the workforce and gain greater financial independence were gaining traction.
Al Howayan is among nearly one million unemployed Saudis – 12 percent of the working-age population – pinning their hopes on the Crown Prince’s vision to modernise the conservative and patriarchal country with ambitious projects.
Women make up about 83 percent of the jobless, according to the Saudi statistics office. And it’s an educated group; 70 percent of those women have high school diplomas or university degrees.