Media ININ Economy We Trust
03-03-2019 Media in\ Dubai
The Dubai Government’s Department of Finance (DED) has launched a second package of initiatives to stimulate economic growth aimed at enriching the emirate’s economic stimulus package as part of the Government’s response to the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. In Dubai to facilitate business procedures and reduce the cost by harnessing all the possibilities to facilitate the exercise of economic activities without complications or obstacles.
The new initiatives package includes five initiatives to support small and medium enterprises and public-private partnerships, said the Director General of Finance Department Abdulrahman Saleh Al Saleh, who stressed the keenness of the Government of Dubai to follow the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum. Which aims to reduce the cost of doing business and support listed companies in the emirate and attract new investments to accelerate the wheels of development and improve the pace of economic performance in the emirate.
The first initiative is to pay the dues of small and medium enterprises that supply services and goods to government agencies within 30 days instead of 90 days, provided that the repayment period does not exceed 10 days for members of the Mohammed bin Rashid Establishment for the Development of Small and Medium Enterprises. To get its dues within 30 days, taking care to complete the first stimulus package provided to these establishments, which most of the supply of goods and services to the government bodies the nature of repetition and stereotyping and urgency.
The initiative is expected to provide an additional liquidity of AED 1.6 billion per annum when paying the dues, helping to solve the liquidity problems facing these facilities as well as ensuring uniform procurement procedures and transparency.
The second initiative, which aims to provide greater liquidity for small and medium enterprises while ensuring greater participation of these enterprises in government procurement, reduces the value of primary insurance for small and medium enterprises to between 1 and 3 per cent instead of 2 and 5 per cent in order to motivate them to continue to supply For government agencies. Under this initiative, the minimum primary insurance was reduced from 40 million dirhams to 20 million. This includes 80 percent of small and medium enterprises, while the maximum limit was reduced from 100 million dirhams to 60 million, which includes 20 percent of the establishments.
The third economic stimulus initiative on final insurance for SME performance in government projects includes the reduction of the final insurance rate known as “performance assurance” for SMEs from 10% to 5% for all procurement.
Under this initiative, the Government of Dubai intends to prepare a classification of enterprises entitled to a reduction of performance insurance to 5 per cent, as well as to link the mechanism of refunding part of the final insurance to the proportion of supplies from enterprises while increasing the contribution of SMEs to GDP.
It is expected that this initiative will increase the value of the final insurance of classified enterprises which account for 70 percent of the total assets to 100 million dirhams over a shorter period of time. The reduction of the final insurance rate will enhance the entrepreneurial business environment, Financing system and enabling it to inject more investments.
The focus of the fourth initiative of economic stimulus initiatives is to allocate 5 percent of the government capital projects to small and medium enterprises.
This initiative, dedicated to members of the Mohammed bin Rashid Establishment for SME Development, aims to encourage these enterprises to develop their businesses, enter into contracts for major projects with government agencies, and form alliances to compete for government projects. The allocation of 5% of government capital projects to small and medium enterprises The company has access to projects worth approximately AED 400 million.
The fifth of the economic stimulus initiatives is the allocation of projects worth one billion dirhams to the government partnership with the private sector in order to attract investments of this sector and improve the quality of service and reduce the burden on the public budget.
This initiative, which is expected to attract one billion dirhams, ensures the optimal utilization of the elements of Law No. 22 of 2015 on public-private partnership as well as the implementation of projects planned by government agencies in a timely manner in line with the Dubai 2021 Plan.
The Director General of the Department of Finance emphasized the ability of these initiatives to contribute to the promotion of economic growth and the creation of more jobs in the long term. He also pointed to their importance in raising the efficiency of government services and the scope of geographical coverage, as well as reducing risks and redistributing them fairly between the government and the private sector.
