President Sheikh Mohamed has announced a Dh28 billion ($7.6bn) social support package to provide lower income Emirati families with subsidies to pay for essentials including fuel, food and utilities.
The President said the existing social support scheme for citizens would be restructured to raise annual financial assistance from Dh2.7bn to Dh5bn.
The total social support budget has been doubled from Dh14bn.
Led by the Ministry of Community Development, the programme offers aid for housing, food, fuel, electricity and water, in addition to temporary financial support for unemployed citizens over the age of 45.
The initiative sets out a series of allowances for Emiratis.
All of the measures are for Emirati households with a total household income of up to Dh25,000.
Hessa Buhumaid, Minister of Community Development, said further details of how the scheme will be implemented will be announced on Tuesday.
“The increase in these subsidies aims to tackle inflation," the minister told Dubai TV.
"Starting tomorrow, Tuesday, we will announce more details of the application and mechanisms for disbursing aid and social allowances to the various eligible groups," she added in a tweet.
Nationwide, inflation was up 3.3 per cent in Q1 2022 compared to the previous year, official figures show.
In Dubai, consumer inflation rose to 4.6 per cent in April year-on-year, Emirates NBD said, the highest rise since 2015. Food prices were 8.6 per cent higher year-on-year, the bank said, while fuel and average rents rose significantly.
Fuel subsidies
The scheme aims to mitigate the impact of rising fuel costs, providing an 85 per cent discount on fuel prices above Dh2.10 per litre.
The head of the family will receive this monthly subsidy on up to 300 litres, while a working wife receives an additional 200 litres. The head of the family will be granted 400 litres if the wife does not have employment.
Officials have yet to state whether this will be done by presenting a card at a petrol station, for example.
Electricity and water
Eligible Emiratis will be granted a 50 per cent subsidy for electricity consumption of less than 4,000 kilowatts, and a 50 per cent monthly water subsidy for water consumption below 26,000 gallons.
Food supplement allowance
The government will bear 75 per cent of food price inflation for lower income Emiratis “to meet their living requirements and provide them with a decent life,” state news agency Wam reported.
How the discount scheme will work was not stated.
University education
Among the new allocations included in the social support programme for the family is the “University Education Allowance” for outstanding students.
This is designed to encourage children to enrol in university education, with the value of the allowance at Dh3,200 per month.
Unemployed citizens over the age of 45
A fixed subsidy is granted, ranging from Dh2,000 to Dh5,000 per month, according to age, for unemployed citizens, in addition to other allowances in the event that the unemployed person is the head of a citizen family.
Job seekers
This allowance extends for a period of six months, and amounts to Dh5,000 dirhams per month for each beneficiary, regardless of age. The allowance offers financial assistance while looking for employment.
Accommodation
The programme includes a provision for housing, ranging between Dh1,500 dirhams and Dh2,500 per month, to pay for private accommodation until a family obtains government housing. Applicants who live with parents or any other family are entitled to 60 per cent of these amounts.
The support does not apply to those who have any other form of government housing benefit, or who own a house registered in their name.
The benefit stops when the applicant secures government housing.
Family allowances increased
The father of the family will now receive an allowance starting at Dh5,000 per month. This amount will increase at a rate of Dh2,000 per month for every 10 years of work experience, to a maximum of Dh13,000 per month.
This allowance is granted from the age of 30 and above, with the calculation of work years beginning from age of 21.
The wife’s allowance will be lifted to Dh3,500 per month.
Allowances for children will rise to Dh2,400 a month for the first child, Dh1,600 a month for the second and third child, and Dh800 for every subsequent child – up to the age of 21.
This allowance applies to all citizens, those in work, the unemployed and those seeking work.
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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.”
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Stage three:
1. Stefan Bissegger (SUI) EF Education-EasyPost, in 9-43
2. Filippo Ganna (ITA) Ineos Grenadiers, at 7s
3. Tom Dumoulin (NED) Jumbo-Visma, at 14s
4. Tadej Pogacar (SLO) UAE-Team Emirates, at 18s
5. Joao Almeida (POR) UAE-Team Emirates, at 22s
6. Mikkel Bjerg (DEN) UAE-Team Emirates, at 24s
General Classification:
1. Stefan Bissegger (SUI) EF Education-EasyPost, in 9-13-02
2. Filippo Ganna (ITA) Ineos Grenadiers, at 7s
3. Jasper Philipsen (BEL) Alpecin Fenix, at 12s
4. Tom Dumoulin (NED) Jumbo-Visma, at 14s
5. Tadej Pogacar (SLO) UAE-Team Emirates, at 18s
6. Joao Almeida (POR) UAE-Team Emirates, at 22s
