Dubai to expedite government payments to SMEs, cut insurance costs to fuel growth in economy

Dubai plans to expedite government payments to small and medium-sized companies in an effort to revive economic growth in the Middle East’s trade and business hub.

The government will pay SMEs within 30 days instead of 90 days, according to the state-run WAM news agency. The measure is expected to result in 1.6 billion dirhams ($435 million) of additional liquidity to the companies, the news agency said without elaborating.

The plan also includes a reduction in insurance costs for SMEs that will not affect their eligibility for government tenders.

One of the most diversified economies in the Middle East, Dubai is grappling with the impact of low hydrocarbon prices on its oil-rich neighbors as well as the introduction of new fees and taxes in the Gulf. Property prices have declined and the emirate’s main stock index dropped 25 percent in 2018.

Authorities last year announced a raft of measures to reduce the cost of doing business in the emirate, which is part of seven sheikhdoms that make up the United Arab Emirates. The federal government has loosened restrictions on visas to attract more tourists and investors.

The measures announced Sunday include plans to allocate 1 billion dirhams worth of projects to joint ventures between public and private sectors, WAM reported.