Once upon a time not so long ago, Europeans and Asians alike thronged Dubai and shopped dined and vacationed as if there is no tomorrow. Saudi Arabia had initiated reforms and started opening huge Shopping Malls, allowed women to drive cars and built Multiplexes for its population to watch movies. Qatar was so busy and upbeat in its effort to host the FIFA 2022 that they were planning Huge Air-conditioned (climate controlled) Stadiums where a crowd of fifty thousand can watch a game at comfortable 25 degree when outside ambient temperature would be close to fifty degree.
Suddenly all these activities have come to screeching halt… no its not a war situation, it’s a WORLD WAR 3. This war is not started by a nation or a cult or tribe, its started by someone we can barely see even with a microscope. With 2 million plus people affected and around 120000 dead and counting this war is showing no signs to cool down. Every day there are celebrities who have become new casualties and some nations going in to lockdown, somewhere people are getting re-infected and millions of people facing challenge of survival without any means to earn a living.
Now let’s understand how Dubai, Abu Dhabi, Qatar, Oman, Saudi Kuwait and other GCC countries have managed their economic activities and well-being of their citizens and immigrants amidst this pandemic.
Dubai has been a most vibrant economy of all the GCC regions. With 2020 EXPO round the corner (which by the way is shifted now to 2021 – date unknown) Dubai was preparing for this mega event since last 4-5 years and huge constructions and development of Infrastructure was underway. Dubai has its pockets filled with stashes of Dollars and Euros and Rupees which flow from various developed and developing economies like US, EU and India. When this pandemic struck UAE the first casualty was of course the Travel and Tourism sector which practically is the life and breath of Dubai. With travel bans across almost all countries across the globe and all Emirates and Etihad planes grounded the inflow of people to Dubai suddenly halted, and so did the inflow of funds. This forced the Emirate to postpone the 2020 EXPO as situation getting back to normal was nowhere in sight. Then the real threat was sighted when actual testing began and it was found that huge number of imported COVOID infection was passing through the Dubai Airport and lot of it was coming inside the city too. Therefore the UAE Government now has enforced a strict curfew on all movements in Dubai from evening 5 PM to Morning 7 AM, most of offices have been instructed to follow practice of work from home (only 30% staff allowed to work from office) and Social distancing norms to be adhered to at all times. The restaurants are allowed to cater to parcel service only and no walk-in customers are allowed. The Red-Light areas are sealed and each building is searched and disinfected because that was supposed to be the initial hot-spot of infection. So overall situation in Dubai is that the offices are working with 30 percent strength, factories and project sites are working in one shift only, all unnecessary activities like Malls, Tourist spots and Markets etc are closed down and only the Lulus and Carrefours are open where people can buy necessities and groceries. Someone who is caught during curfew hours the fine is 10000 AED (equivalent to @ 3000 USD or 2.5 Lacs INR).
Although a low key city (as compared to Dubai), Abu Dhabi runs the show and calls the shots when the Emirate gets in to trouble. During the 2008 crisis it was Abu Dhabi which came in to rescue of UAE because of its strong position as Oil producer and Big pockets which can sustain economic ups and downs. But as they say these are unusual and exceptional times. With travel bans, lockdowns and closure of major factories and industries, the Oil consumption of the world has itself come down resulting in a major fall of Crude price from 50-60 USD per barrels to the present situation where its struggling to maintain even 25-30 USD per barrel. The cost of exploration of Oil for AbuDhabi is more than what Saudi incurs because Abu dhabi has lot of Offshore Oilfields which are costly to operate as compared to Saudi or Iraq or Kuwait where major Oil comes from Onshore wells. Therefore this fall in oil price is definitely hurting the Emirate. This crisis if not over in a couple of months and if it takes another year or two to resolve, then the new development projects of ADNOC which is holding company of Oil & Gas assets in the UAE may get adversely affected. Therefore Abu Dhabi is also in wait and watch situation but pulling on with its regular operations as of now. The factories, manufacturing units, Oil & Gas projects and other site activities are definitely going on in Abu Dhabi however offices are working with 30 percent strength, Restaurants are closed and all other norms are same as Dubai is following.
Till now Kuwait was a dark horse amongst all GCC Nations. The reason being that even when projects and economic activities in UAE, Qatar or KSA were subdued due to some cyclical variations, Kuwait has been accelerating with full throttle all along last 5 years. The KNPC and KOC always had its hands full of new projects and the Oil & Gas production numbers have never been better. Continuing with the same reputation, even now Kuwait has been continuing the ongoing works and projects but now due to COVOID pandemic they have put some restrictions on normal course of business. Although the work from home norms are in place and unnecessary commercial activities have been stopped but as we understand there is possibility that Kuwait may go for a complete lockdown if the situation doesn’t resolve soon. Passes have been given to those who need to travel and there is a huge fine of 1000 KD on those who don’t follow curfew hours and are caught without papers.
Similar to Dubai which was preparing for EXPO event (earlier scheduled in 2020 and now shifted to 2021), Qatar has been preparing for the FIFA 2022 event for the past 5 years. Huge Stadiums, Metro, Hotels, Malls, Power Distribution infrastructure everything is almost in place and the final count has started. Recent political events has quarantined Qatar from other GCC nations with UAE and KSA severing all ties with the country whereas Oman maintaining a neutral status towards both camps. Now the status is that Qatar is following the same approach to COVOID as other GCC Nations. All people who are working on sites or Projects have been issued soecial permissions to travel, each car is allowed 2 passengers only, fines are imposed on those who travel without permission documents, and after all this the work is going on. Offices are operating with employees attending office alternate days schools and colleges closed and all other commercial activities are closed. However the difference between UAE and Qatar is that being a very small country with comparatively less citizen plus emigrant population and Qatar can easily control any situation efficiently. However this is the first time for all countries to face a pandemic like this and therefore everyone is treading cautiously.
KSA (SAUDI ARABIA)
Saudi Arabia is the Big Brother of all GCC Nations, not just because it has the holiest of all Islamic places of worship but also due to its huge Geography, huge oil production capacity and yes its huge population too. Saudi Arabia was the first one to get affected by the pandemic and that is because Muslims all over the world visit the shrines at Mecca and Madina all year round. So when the pandemic started they had to close down the Mecca and Madina to bring the situation in control. Very stringent measures were taken to flatten the curve and that has given some results. The Mecca and Madina are cities with Residential and Commercial activities only and the Industries and Oil & Gas Plants lie in regions of Yanbu, Dammam and Jubail. So even if the Holy cities were affected, the Eastern region of Dammam and Jubail which are the Industrial and Oil and Gas Hubs are still not much affected by the pandemic. The number of cases and deaths in Jubail and Dammam are very few and the activities are ongoing with of course some riders like social distancing and office staff working from home. Since the Saudi Arabia is a big nation with huge distances between its Industrial townships and the religious places of worship, this pandemic may not cause much of harm to its Industrial and Oil & Gas Economy as per the numbers published till now.
OMAN and BAHRAIN
These are the two smallest brothers in the GCC Group in terms of their economy, Oil Production and population too. Oman is bigger in size than UAE or Qatar but doesn’t have much say in GCC politics because the size of its economy is relatively smaller. Bahrain is again a small tail-like extension of a big giant called Saudi Arabia. As per latest reports Oman has in the meantime managed to increase its Oil production marginally and doing well even in this time of crisis. This has come despite the restrictions, Social distancing and partial lockdown situation prevailing in the country. Bahrain has always depended on Saudi for its survival. Many of the Saudi residents often travel the 21 km bride from Saudi to Bahrain on weekends to do all those things which are prohibited in the Kingdom to return back before Sunday which is their first work day of the week. Now with the pandemic on, the focus of most of the people is not how to spend on exotic weekend anymore. Therefore no wonder that Bahrain economy will start feeling the jitters very soon and may see new lows. All Hotels and Restaurants who depended on Tourists from Saudi and other places has already seen a huge fall. However there are some ongoing projects awarded by BAPCO the Oil & Gas Company which are going on and may help the economy to sustain some of its decent numbers.
Please note that above is a descriptive blog which is written on 16th April 2020 and writer has put in information gathered from various sources combined with his own experiences. This should be treated as his personal opinion only. The writer further urges all readers to verify any information given above from other official sources and not to base their important decisions solely on this article.