Government moves to help SMEs with new legislation

DUBAI // The Federal Government has increased plans to support small businesses after the financial crisis with new legislation expected to be submitted for Cabinet approval in six months. The Ministry of Economy is close to sending out draft legislation, aimed at fostering small and medium-sized enterprises (SMEs), for consultation among other government departments and the business community.
"The ministry has prepared a comprehensive proposal to develop the role of SMEs in the UAE that will be shared with concerned parties," said Sultan al Mansouri, the Minister of Economy. The proposal includes an analysis of the current status of SMEs and the challenges faced by the sector, including how to arrange financing for projects that have come under increasing pressure this year as banks reduced lending.
"There are many challenges facing SMEs in the UAE, including lack of training, financing, high operation cost, labour considerations, the absence of marketing networks to promote national products, and procedural obstacles," Mr al Mansouri said. "The ministry is working on tackling these challenges by developing SME projects all over the UAE. We will also work to facilitate procedures of registrations and financing, and to provide training programmes."
The Government has already started discussions with banks with the aim of creating special facilities to support SME projects. The sector employs about 85 per cent of the UAE workforce and contributes about 46 per cent to the country's GDP of Dh535.6 billion (US$145.82bn), according to the Ministry of Economy. Some 98 per cent of businesses registered in Dubai are classified as SMEs, figures from the Dubai Chamber of Commerce and Industry show.
But many small firms have struggled to stay afloat since the economy started to contract in the fourth quarter of last year, hurting consumer demand and investments. Small businesses rely heavily on bank financing and have complained that banks are reluctant to lend to them especially if they have any exposure to the construction sector, which is beset with payment problems. The ministry is also drawing on support initiatives that have already been used in 28 other countries.
The Mohammed Bin Rashid Establishment for SME Development, an arm of the Dubai Government, last week published official definitions of what constitutes micro, small and medium-sized businesses. The designations are based on staff numbers, annual turnover and industry classification. But the ministry said it also planned to introduce its own definition of SMEs to be used on the federal level. "The new SME definition will be sent to concerned parties in the UAE before January 15 to study it and check its suitability for the needs of each emirate," Mr al Mansouri said.
skhan@thenational.ae

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The story of Edge

Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, established Edge in 2019.

It brought together 25 state-owned and independent companies specialising in weapons systems, cyber protection and electronic warfare.

Edge has an annual revenue of $5 billion and employs more than 12,000 people.

Some of the companies include Nimr, a maker of armoured vehicles, Caracal, which manufactures guns and ammunitions company, Lahab

A State of Passion

Directors: Carol Mansour and Muna Khalidi

Stars: Dr Ghassan Abu-Sittah

Rating: 4/5

The 12

England

Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, Tottenham Hotspur

Italy
AC Milan, Inter Milan, Juventus

Spain
Atletico Madrid, Barcelona, Real Madrid

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Dr Afridi's warning signs of digital addiction

Spending an excessive amount of time on the phone.

Neglecting personal, social, or academic responsibilities.

Losing interest in other activities or hobbies that were once enjoyed.

Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.

Experiencing sleep disturbances or changes in sleep patterns.

What are the guidelines?

Under 18 months: Avoid screen time altogether, except for video chatting with family.

Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.

Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.

Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.

Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.

Source: American Paediatric Association