Opening up of global economy is imperative for the UAE to gather momentum, Khalaf Al Habtoor says
If businesses open up in the Emirates by the end of May and the world economy restarts in the next two months, 'businesses would restart quickly'
A global economic recovery is a must for the UAE economy to bounce back from a coronavirus-inflicted slowdown and businesses suffering from lockdowns need to push on without waiting for a treatment or a vaccine to emerge, Dubai-billionaire businessman Khalaf Al Habtoor said.
“We have to continue working and we have to open. I am talking about the world; I am not talking about the UAE because the UAE without the world cannot react [to the pandemic economic challenge]”, Mr Al Habtoor told Bloomberg TV. “We have to go on … we can’t wait for a vaccine until the end of the year.”
Mr Al Habtoor, whose business interests span luxury hotels in the UAE and abroad, car dealerships, real estate, schools and publishing, cited the opening up of some western economies, like Germany and some Scandinavian countries, as an encouraging sign for the UAE.
If businesses open up in the UAE by the end of May and the world economy opens up in the next two months, with airports and harbours functioning again, “businesses would react very quickly”, he said.
The coronavirus pandemic has tipped the world into a recession, which the International Monetary Fund estimates will be the deepest since the 1930s Great Depression.
The global economy is forecast to shrink 3 per cent this year and a recovery is not expected until next year, according to the fund.
Economies around the world are struggling with mounting job losses as business activity slows. The number of people applying for unemployment benefits last week climbed to more than 30 million in the US despite the country pouring trillions of dollars into its economy to offset the impact of the outbreak.
The pandemic has infected more than 3.6 million people and killed over 257,000, according to the Johns Hopkins University, which is tracking the outbreak.
Economies in Asia, the Middle East, Europe and some states in the US are beginning a gradual reopening in a bid to revive business and boost employment.
The UAE, which shut its borders and restricted movement, allowed the reopening of malls and other businesses at a limited capacity of 30 per cent.
Hospitality, airlines and car dealerships, Mr Al Habtoor said, have faced the biggest headwinds during the crisis and operating hotels are incurring losses.
“We are bleeding … [but] you cannot throw everybody out,” he said, adding that unemployment is the biggest risk if the current crisis drags on.
His companies have so far not made any redundancies, but they may have to make some tough decisions in the future. “I have to be honest, we will have no choice,” he said.
Asked if Dubai should cap the number of hotels in the emirate to control oversupply in the market, Mr Al Habtoor said it is “too late” for such a move. Dubai, however, is “blessed” and once the borders open, the rooms will fill up gradually.
The hotels, however, will have to incentivise global travellers with “good packages” to come back to the emirate again, he added.
Despite the headwinds, Al Habtoor companies have not yet sought to restructure debt, the businessman said.
“We haven’t approached the banks for the time being because we have a lot of time until the end of the year and before that we will talk [with banks],” Mr Al Habtoor said. “The banks are ready to work with us, with everybody and [want to] keep a good relationship.”
Updated: May 6, 2020 05:22 PM