A view of Downtown Dubai and Business Bay. Dubai has unveiled various support measures for SMEs and businesses amid the Covid-19 pandemic last year. Chris Whiteoak/ The National.
A view of Downtown Dubai and Business Bay. Dubai has unveiled various support measures for SMEs and businesses amid the Covid-19 pandemic last year. Chris Whiteoak/ The National.
A view of Downtown Dubai and Business Bay. Dubai has unveiled various support measures for SMEs and businesses amid the Covid-19 pandemic last year. Chris Whiteoak/ The National.
A view of Downtown Dubai and Business Bay. Dubai has unveiled various support measures for SMEs and businesses amid the Covid-19 pandemic last year. Chris Whiteoak/ The National.

Dubai supports SMEs with procurement contracts worth Dh896m in 2020


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Dubai SME, a government agency tasked with developing the small and medium enterprise sector, supported its members with government procurement contracts worth Dh896 million in 2020. 
The contracts came from 61 local and federal government entities and other establishments as part of the Government Procurement Programme (GPP) that helped start-ups and SMEs in Dubai to enhance their competitiveness and sustain growth during the Covid-19 pandemic, the agency said in a statement on Saturday.

"The Government Procurement Programme reflects the continuity and firm commitment from the public and private sectors in the country to supporting SMEs," Sami Al Qamzi, Director General of Dubai Economy, said.

"In spite of Covid-19, a total of 61 governmental, semi-governmental, and private entities co-operated with Dubai SME members in 2020."

Dubai, the commercial and trading hub of the Middle East, has unveiled various support measures for SMEs and businesses amid the Covid-19 pandemic last year. The emirate has also launched stimulus measures worth Dh1.7 billion to off set the impact of the pandemic.

The GPP has so far supported Dubai SME members with Dh7.5bn worth of contracts since its inception in 2002, according to Dubai SME.

Out of all contracts won by Dubai SME members under GPP in 2020, 47 per cent were from Dubai government entities while 22 per cent came from semi-governmental entities, 21 per cent from the private sector and 10 per cent from federal government entities.

The commercial sector accounted for 83 per cent of the purchases, while 12 per cent came from the professional sector, 4 per cent from the industrial sector and 1 per cent from the tourism sector.

Abdul Al Janahi, chief executive of Dubai SME, called for improved co-ordination and response from government agencies and institutions that have yet to achieve the SME procurement target percentage. He also noted the importance of giving priority to tenders submitted by Emirati entrepreneurs and projects in line with government directives.

Dubai government entities awarded Dh427.5m worth of contracts to Dubai SME members in 2020 with the RTA topping the list.

Among federal government entities, the Ministry of Education led the procurement with contracts valued at Dh45m.

Emirates Group topped the list of semi-governmental entities with purchases and contracts valued at Dh79m.

Union Coop topped the list of private sector entities supporting the GPP with purchases and contracts valued at Dh136.5m, followed by Emaar and Etihad Airways.

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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.”

if you go

Getting there

Etihad (Etihad.com), Emirates (emirates.com) and Air France (www.airfrance.com) fly to Paris’ Charles de Gaulle Airport, from Abu Dhabi and Dubai respectively. Return flights cost from around Dh3,785. It takes about 40 minutes to get from Paris to Compiègne by train, with return tickets costing €19. The Glade of the Armistice is 6.6km east of the railway station.

Staying there

On a handsome, tree-lined street near the Chateau’s park, La Parenthèse du Rond Royal (laparenthesedurondroyal.com) offers spacious b&b accommodation with thoughtful design touches. Lots of natural woods, old fashioned travelling trunks as decoration and multi-nozzle showers are part of the look, while there are free bikes for those who want to cycle to the glade. Prices start at €120 a night.

More information: musee-armistice-14-18.fr ; compiegne-tourisme.fr; uk.france.fr