GCC economies react to Covid-19

15 March 2020
UAE and Saudi launch stimulus packages as coronavirus spread continues

GCC governments have closed public establishments, launched stimulus packages and extended travel bans amid efforts to contain the spread of Covid-19, the illness caused by the current coronavirus pandemic.

These measures come as the number of Covid-19 cases passes 14,124 in the Middle East.

Iran, the regional epicentre of Covid-19, has 11,364 cases with 514 deaths due to the illness, according to data from the World Health Organisation (WHO).

Financial support

Sheikh Hamdan bin Mohammed bin Rashid al-Maktoum, Crown Prince of Dubai and chairman of the Executive Council of Dubai, announced a AED1.5bn ($409m) stimulus package on 12 March for the emirate.

The three-month package features 15 initiatives for the retail, trade, tourism and energy sectors, including a 10 per cent discount on utilities bills and waivers on the down payment for trade licence instalments.

On 14 March, the UAE Central Bank announced AED100bn ($27bn) in credit and capital to support the economy.

The bank aims to provide temporary exemption from principal payments and interest on existing loans to private sector companies and individuals impacted by the Covid-19 outbreak.

Small and medium-enterprises (SMEs) and real estate, two of the most vulnerable industries in terms of Covid-19’s immediate impact, are given special consideration in the central bank’s plan.

Saudi Arabia has provided similar economic support, pledging a SR50bn ($13bn) package to help SMEs, e-commerce companies and entities affected by closures in Mecca and Medina.

The Saudi Arabian Monetary Authority (Sama) said the private sector support package would facilitate payments for companies affected by the precautionary measures adopted in the holy cities, which include the closure of the Grand Mosque.

Travel bans

Flight suspensions have been extended in the GCC, and in the UAE, visas will be halted for foreigners from 17 March.

The Federal Authority for Identity and Citizenship said no foreigners, except diplomatic passport holders, would be granted any kind of visa until “a mechanism for medical examination has been established in the countries of departure,” state news agency Wam reported.

On 14 March, the UAE’s General Civil Aviation Authority said it would suspend all flights to and from Lebanon, Turkey, Syria and Iraq from 17 March until further notice.

The UAE has also suspended all flights to and from Italy, except Rome, for an indefinite period.

In Saudi Arabia, the Ministry of Interior has suspended all international flights to contain the spread of Covid-19.

The kingdom’s flight suspension order extends for a period of two weeks from 15 March, during which an “exceptional official holiday” will be declared for citizens and expatriates who are impacted by the flight suspension.

Elsewhere, the Kuwait Council also ruled to indefinitely close down Kuwait International Airport from 13 March, resulting in the cancellation of commercial flights by Jazeera Airways and Kuwait Airways.

Qatar will stop issuing visas on arrival to citizens of Italy, France, Germany and Spain, as well as travellers from these countries.

Entry to Qatar has also been suspended for Sudanese citizens, including holders of Qatari residency permits.

Socio-economic impact

The rapid spread of the Covid-19 illness has deeply impacted daily life in the GCC.

The UAE has closed major tourism and cultural destinations, including the Louvre Abu Dhabi museum, the Ferrari World theme park and Al-Ain Zoo to curb the spread of Covid-19.

In Abu Dhabi, the Department of Economic Development issued two separate circulars to owners of entertainment halls, including movie theatres, and videogame centres and lounges, to suspend their operations.

Violators will be fined AED3,000-10,000 for non-compliance with the department’s orders.

Dubai has cancelled all events planned for March, with hotels asked to stop hosting wedding celebrations.

Some employees at federal and local government departments in the UAE are working from home as authorities pursue self-isolation to contain the coronavirus' spread. 

The most notable event suspension has emerged from Bahrain, which postponed the 2020 Formula 1 Gulf Air Bahrain Grand Prix event.

Bahrain International Circuit previously planned to host the event on 20-22 March without spectators, but said on 13 March that delaying the race was “the right thing to do”.

F1 events in Australia and Vietnam have also been suspended.

In Saudi Arabia, which has indefinitely suspended its 2020 census project, the sports ministry has cancelled all sports activities and closed private sports halls and centres around the country.

Family entertainment zones inside shopping malls have also been closed, and the health ministry has urged people to stay indoors and avoid public gatherings.

Saudi Arabia’s Ministry of Islamic Affairs has instructed worshippers to perform Friday prayers in local mosques instead of visiting larger facilities to avoid overcrowding.

The Kuwaiti Ministry of Awqaf and Islamic Affairs issued a circular to imams on 10 March asking them to shorten prayers and limit Friday prayers to 10 minutes.

Oman has followed the UAE, Saudi Arabia, Bahrain and Kuwait in temporarily closing schools and universities in the country.

Global spread

More than 156,396 cases of Covid-19 have been recorded around the world.

China, which has started to ‘flatten the curve’ of the coronavirus’ spread, has 80,995 cases, while Italy, the epicentre of Europe’s Covid-19 cases, has 21,157 patients.

The WHO characterised Covid-19 as a pandemic on 11 March, and US President Donald Trump declared a national emergency on 13 March to allocated $50bn from federal resources to combat the spread of Covid-19 in the US.

The US has around 2,816 cases of Covid-19 and has recorded 58 deaths.

The wives of Canadian Prime Minister Justin Trudeau and Spanish Prime Minister Pedro Sanchez are among the political figures who have tested positive for Covid-19.

President Trump has reportedly tested negative for the virus.  

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