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215© The Author(s) 2021G. Luciani, T. Moerenhout (eds.), When Can Oil Economies Be Deemed Sustainable?, The Political Economy of the Middle East, https://doi.org/10.1007/978-981-15-5728-6_9
CHAPTER 9
Fiscal Sustainability and Hydrocarbon Endowment Per Capita in the GCC
Monica Malik and Thirumalai Nagesh
1 IntroductIon
GCC economies remain highly dependent on the hydrocarbon sector in terms of the composition of GDP and as a source of government revenue and export base. However, variations persist across the region, with the economies of Bahrain and Dubai the most diversified and Kuwait the least. The key non-oil sectors across the GCC tend to be in the following areas—construction, real estate, tourism, retail, hospitality, aviation and petro-chemical and energy-intensive industries (such as aluminium). The policy focus again intensified towards economic diversification from end-2014 with the sharp fall in the oil price. New development plans have been announced to reach this objective, most notably in Saudi Arabia, with the National Transformation Plan and Vision 2030, both announced in 2016. These plans are a blueprint to diversify the Saudi economy (fiscally and in terms of composition of GDP) and highlight the government’s commit-ment to transform the economy away from oil.
M. Malik (*) • T. Nagesh The Hills Compound, Abu Dhabi, United Arab Emiratese-mail: [email protected]; [email protected]
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In this chapter, we focus on fiscal sustainability, given the importance of fiscal policy in the GCC. Most of the hydrocarbon earnings (via national-ized companies) accrue to the regional governments who then are the main conduit for this revenue to enter the domestic economy and the central factor dominating economic activity and domestic demand. As such, governments in the GCC play a much larger role in the economy than is generally the case for other emerging market countries and are often the key employers, especially for the national population. The role of government spending is especially vital for the macro-management of the GCC economies, given their limited control of monetary policy with their currencies being pegged to the USD. We highlight that the fiscal side is just one aspect of overall economic sustainability, albeit linked to other areas. Indeed, the diversification in the economic base will support the deepening non-oil revenue. However, fiscal reforms and consolidation at times of lower oil price cycles result in weaker domestic activity, including investment (public and indirectly private) and impeding diversification plans. In this chapter, we focus on fiscal reforms between 2014 and 2018, particularly on the UAE and Saudi Arabia as they have seen the greatest fiscal reforms during this period, though it also highlights fiscal strength and developments in other GCC countries.
Despite the renewed emphasis on shifting away from the hydrocarbon sector, the GCC countries that are currently the most resilient and best able to cope with the low oil price environment are those with large hydro-carbon reserves relative to their populations (hydrocarbon rich per capita). These countries tend to use less of their resources supporting the popula-tion, resulting in stronger fiscal fundamentals that bolster their economic sustainability despite high exposure to the hydrocarbon sector. We high-light in the chapter that the economic strength of these countries are reflected in a number of economic indicators, including low debt and high foreign currency reserves, which in turn feed into their stronger sovereign rating. This reflects their stronger saving rates when oil prices are higher, alongside lower budget breakeven oil prices. This does not mean that these economies should not look to diversify. Rather, it highlights that their fiscal strength results in less pressure on the economy during times of low prices and reform. Thus, fiscal sustainability at this stage is mostly unrelated to the degree of economic diversification. Fiscal diversification has largely been weak across the region, with hydrocarbon revenue remain-ing the main source of government income. That some countries have a relatively higher share of non-oil revenue in total revenue, in many cases,
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reflect weaker hydrocarbon endowment rather than a diversified revenue base (especially tax) or lower subsidy levels.
The underlying fiscal strength and sustainability of GCC economies is especially important at a time when the region has seen relatively limited success in widening the economic base (composition of GDP) much beyond pre-2014 levels. There have been some signs of greater fiscal reforms, especially in the UAE and Saudi Arabia. However, this has placed downward pressure on their economies, including the private sector—who are often proposed key drivers of economic diversification and raising employment opportunities for nationals. Thus, government-led initiatives will be central to boosting and deepening economic activity, alongside developing a framework to access private capital and expertise—local or international. Notably, a number of GCC countries are promoting labor nationalization programs, in varying degrees, to help create job opportu-nities for nationals, especially the youth. Reducing the share of govern-ment spending on wages will also be critical to boosting fiscal sustainability across the GCC, especially for the hydrocarbon poorer per capita coun-tries, alongside reforms to increase non-oil revenue.
The other area of policy adjustment and economic support has been on the oil front since 2017—the pullback in OPEC+ oil production has helped to reduce global inventories and has provided fundamental support to the oil price. The rise in global oil prices since mid-2017 reduces some of the fiscal (and external) pressure seen from end-2014, particularly in 1H2016. In turn, this has allowed an increase in government spending for 2018. GCC fiscal positions improved in 2018 despite the increase in gov-ernment spending, thanks to the higher oil revenue. However, the fall in oil price at the end of 2018 and the ongoing development in hydrocarbon technology that are likely to impact future supply and demand (including shale oil, renewable energy and electric vehicles) highlight the need for further reforms to strengthen and deepen fiscal sustainability in the GCC.
2 VarIatIons In Gcc Hydrocarbon EndowmEnts and EconomIc sustaInabIlIty
The size of hydrocarbon reserves per capita is a key factor for fiscal sustain-ability currently rather than just the size of the hydrocarbon reserves themselves or hydrocarbon revenue as a percentage of total government
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revenue. Based on per-capita hydrocarbon endowments, the GCC coun-tries can be broadly divided into two categories (Figs. 9.1 and 9.2):
• Hydrocarbon richer per capita: These countries have higher hydro-carbon reserves (and production) relative to their populations. They include Kuwait, Qatar and the UAE (Abu Dhabi led).
• Hydrocarbon poorer per capita: These countries have relatively smaller hydrocarbon reserves (and production) relative to their pop-ulations. They include Bahrain, Oman and Saudi Arabia. Within this group, Oman and Bahrain are in relatively weaker positions versus Saudi.
The per-capita hydrocarbon ratio is particularly important in the GCC, given the relationship between the state and citizens—that is, the social contract. In simple terms, in GCC economic frameworks, hydrocarbon revenue falls to the government (via the national oil and gas companies) and is then distributed and mobilized for the well-being of the population and country. This has also meant that there is a framework to support the citizens from cradle to grave in various ways, including covering education and healthcare, highly subsidized utility prices, land and cheap financing
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Fig. 9.1 GCC: Hydrocarbon endowment per capita (reserves) based on national population. (Source: BP [hydrocarbon reserves data], regional statistical agencies [population data 2016–18], authors’ calculations and methodology)
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to build housing. There are, however, variations across the region on the level of support provided by the government to nationals, including with the differences in the pace of reforms seen since 2015 also contributing to this. Moreover, the public sector has been a key employer of nationals and there has been a limited tax base. This social contract is seeing signs of change, especially with the fall in the oil price and the rise in the domestic population. Indeed, the region has seen a pullback in subsidies and the introduction of fees and some taxes since 2015. At the same time, strong population growth means that the younger generation of GCC nationals may not fully be able to rely on the state to provide them with jobs. Nevertheless, the social contract remains largely in place despite these adjustments.
The nature of the economies and impact of the social contract has resulted in hydrocarbon richer countries generally having to spend less of their hydrocarbon income to support their populations. This has also meant that these countries have seen larger fiscal surpluses and foreign currency reserve build-ups during periods of higher oil prices. Moreover, after the collapse of the oil price at end-2014, they have largely seen smaller deficits and thus, have required lesser fiscal adjustment to balance their budgets (Fig. 9.3).
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Fig. 9.2 GCC: Hydrocarbon endowment per capita (production) based on national population. (Source: BP [hydrocarbon output data], regional statistical agencies [population data 2016–18], authors’ calculations and methodology)
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3 Hydrocarbon EndowmEnt sEEn In VarIous FIscal and EconomIc IndIcators
The hydrocarbon endowment of the GCC countries is reflected in a num-ber of fiscal and economic indicators, including:
• Budget breakeven (BBE) oil price: This is the required oil price for a fiscal budget to be balanced. GCC budget breakeven oil prices have largely fallen since the peak in 2014 until 2017 as GCC governments reduced spending and introduced fiscal reforms. The hydrocarbon richer per capita countries have lower BBE oil prices, alongside lower external breakeven oil price (the oil price needed for the current account to be balanced). This lower BBE oil price again reflects that less of the hydrocarbon resources are spent on the national popula-tion and more of the income from resources are saved. After the 2014 shock, the UAE and Kuwait remain the most comfortable fis-cally and have seen an improvement in their budgetary performance with the rise in the oil price from the oil price trough; whereas Bahrain, Oman and Saudi Arabia lagged behind. It is feasible that the BBE price will again rise in the future if international oil prices
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Fig. 9.3 GCC: Hydrocarbon endowment per capita reflected in current account and fiscal balances. (Source: Regional statistical agencies, ADCB estimates [2019, 25])
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recover or stabilize, and governments look to support growth and sentiment (Table 9.1).
• Debt to GDP: The hydrocarbon poorer per capita countries gener-ally have higher government debt levels relative to GDP. The GCC countries largely entered this oil price crisis with low government debt levels (with the exception of Bahrain), as they used the strong oil prices from prior years to reduce their debt levels. Again in the case of the UAE the low overall debt position relative to GDP stems from Abu Dhabi, with Dubai seeing higher levels. However, the larger fiscal deficits in Bahrain, Oman and Saudi Arabia from 2015 with the correction in the oil price have resulted in greater funding requirements and a faster acceleration of government debt. This rise in the debt stock is resulting in more government spending being allocated to interest payments and debt servicing. For most GCC countries except Bahrain, interest payments still account for a small share of overall spending (Figs. 9.5 and 9.6).
• Foreign currency reserve position: The hydrocarbon richer per capita countries have been able to build up significant foreign cur-rency reserves, reflecting their larger fiscal surpluses during times of higher oil prices. Moreover, there has been less pressure to draw down these reserves to cover fiscal deficits. Income from these reserves, often invested by their sovereign wealth funds (SWF), pro-vides an additional source of income (investment) to the govern-ment and in a way is a form of revenue diversification. Saudi Arabia was looking to sell 5% of Aramco,1 in part to increase overseas invest-ment and thereby boost and diversify government income. The
1 Aramco listed its shares domestically on the Tadawul exchange on 11 December 2019, raising USD25.6 billion from a 1.5% stake sale. Subsequently, it also exercised its “greenshoe option” to sell an additional 450 million shares, taking the total stake sale to 1.725%.
Table 9.1 GCC: Fiscal budget breakeven oil price (USD per barrel)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Bahrain 76 81 99 112 116 119 116 118 107 103Oman 65 66 71 81 83 96 103 96 89 84Saudi 57 65 67 78 79 92 106 95 96 78UAE 44 66 70 74 77 76 83 65 60 65Qatar 29 27 33 38 43 50 54 50 53 57Kuwait 34 29 45 43 49 52 56 49 47 51
Source: IIF (2018, 3)
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FX reserves, % of 2018 GDP
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Fig. 9.4 GCC: Hydrocarbon endowment also reflected in regional FX reserve* positions. (*Includes reserves with SWFs and held at central banks. Source: Sovereign Wealth Fund Institute, Regional Central Banks, ADCB estimates [GDP])
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Fig. 9.5 GCC: Hydrocarbon poorer per capita countries have largely seen a faster rise in government debt. (Source: IMF, ADCB estimates)
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reduction of foreign currency reserves since 2015 is however most clearly visible in the Saudi Arabia Monetary Authority’s net foreign asset (NFA) position, which highlights the drawdown in reserves to help fund the fiscal deficit. For other GCC countries, a significant part of their foreign currency reserves are held by SWFs and thus there is limited visibility (Fig. 9.4).
• Sovereign ratings: foreign currency reserve positions and govern-ment debt levels are also reflected in the sovereign ratings of GCC countries. The hydrocarbon richer per capita countries have substan-tially higher sovereign ratings, underpinned by large foreign cur-rency reserves and low debt levels. Notably, despite the sharp correction in the oil price, Abu Dhabi and Kuwait have not seen any ratings downgrades by the three main ratings agencies since 2014. Moreover, their ratings remain among the strongest globally. On the other hand, Bahrain, Oman and Saudi Arabia have seen multiple downgrades over this same period. The ratings are reflected in the cost of borrowing and the risk premium, with hydrocarbon poorer per capita countries more susceptible to changes in global sentiment
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Fig. 9.6 GCC: gross government debt has risen sharply since 2014, limited fiscal space for some countries. (Source: IMF, ADCB estimates)
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and dependent on capital inflows (to cover fiscal and current account shortfalls and to support investment and diversification programs) (Table 9.2).
• GDP per capita and unemployment: Reflecting the fact that fewer resources in relative terms have to be used to support their populations, the hydrocarbon richer per capita countries also tend to have higher GDP per capita and spending power. Moreover, unemployment levels for nationals tend to be lower, though regional data on this front is limited. The hydrocarbon richer countries also tend to have a larger share of expatriates in their populations, given their relatively smaller national populations relative to economy size and the ability of the public sector to employ nationals.
Table 9.2 GCC: Sovereign rating changes by the main rating agencies since 2015–2018
Fitch Moody’s S&P
Mid- 2014
Current Change Mid- 2014
Current Change Mid- 2014
Current Change
Bahrain BBB BB- 4 notches down
Baa2 B2 6 notches down
BBB B+ 5 notches down
Kuwait AA AA No change
Aa2 Aa2 No change
AA AA No change
Oman -NA- BB+ 2 notches downa
A1 Ba1 6 notches down
A BB 6 notches down
Qatar AAb AA− 1 notch down
Aa2 Aa3 1 notch down
AA AA− 1 notch down
Saudi Arabia
AA A+ 2 notches down
Aa3 A1 2 notches down
AA− A− 3 notches down
UAE -NA- -NA- -NA- Aa2 Aa2 No change
-NA- -NA- -NA-
Abu Dhabi
AA AA No change
Aa2 Aa2 No change
AA AA No change
Source: Bloomberga2 notches down from 3 Jan 2017bRatings started from 3 June 2015
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There are, naturally, variations within the GCC based on government policy and effectiveness. During times of high oil prices, Kuwait saw sub-stantially larger fiscal surpluses as a percentage of GDP (2005–2008), as the government made limited progress in its investment plans, partly due to the difficult relationship between the cabinet and the National Assembly. Meanwhile, in the case of Qatar, government debt was higher at end-1990, reaching 74.4% of GDP in 1999, given borrowing to develop the gas industry. However, the rise in gas income resulted in a sharp reduction in government debt to 8.9% of GDP in 2007, and FX reserves rose. As noted earlier, GCC countries used strong oil revenues in 2002–2014 to reduce debt levels, though aggregate government debt have risen from 2014 to well above the 2002 peak in absolute terms, largely driven by the hydro-carbon per capita poorer countries. Notable, Saudi Arabia started issuing external debt from end-2016, earlier all of the government debt was SAR denominated.
4 FIscal rEForm momEntum
The period between 2003 and 2014 generally saw strongly expansionary government spending from the GCC countries. This pickup in govern-ment was supported by the strengthening in the oil price from around 2002, though the pace of spending increase also varied between the GCC countries. For example, Saudi Arabia initially took a more cautious approach, whilst focusing on reducing government debt levels. Notably, this debt repayment also supported liquidity in the banking sector (with all government debts being domestic at this point, including those held by banks and pension organizations), indirectly providing a boost to eco-nomic activity. Much of the initial increases in spending during this period was led by UAE (Dubai) and Qatar (including the development of the gas sector) and partly debt led, though with the broader pace rising across the GCC from around 2003.
The increase in government spending until 2011 was both on the cur-rent and the capital fronts, though overall the capital expenditure had limited impact in broadening the economic base. In many cases, a signifi-cant part of the investment was to upgrade infrastructure, compensating for weak periods of investment in the 1980s and 1990s with low and vola-tile oil prices, and for the rise in population. However, we also note that, in many cases, higher investment spending was implemented by govern-ment related entities (GREs), and thus not reflected in the governments’
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budgets. From 2012, there was a shift across the GCC toward current expenditure, likely impacted by the MENA Arab Spring developments. The overall rise in government spending was reflected in the rise in the BBE oil price of the GCC countries from 2004 to a peak in 2014, and supported by the overall rise in the oil price (ex-2009). GCC countries largely saw fiscal surpluses over this period (ex-2009), with the exception of Bahrain, which saw a sustained deficit since 2009. However, with the sharp correction in the oil price from end-2014, the focus of fiscal policy shifted towards retrenchment and reform (Figs. 9.7 and 9.8).
Since end-2014, the pace of fiscal reform in the GCC has gathered momentum. This is especially important, given (1) the large youth popu-lation and national population growth rates and (2) medium- to long- term structural challenges to the oil price, including from new technology (shale, renewable energy sources). GCC economies will have to create jobs to cater for the entry of nationals into the work force (please see our labor market and reform chapter), with educational reforms also vital for supporting the needs of the private sector and economic development. Without this job creation, greater pressure will fall on the governments to support the national populations, through jobs creation or by a support framework.
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Fig. 9.7 GCC: Government spending growth was strong between 2003 and 2014. (Source: Reuters (oil price), spending growth calculated from regional sta-tistical agencies and IMF GDP data)
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The fiscal reforms have been much wider than seen in previous oil price downturns, indicating that areas that were previously seen as sensitive are open to change and reform. For example, subsidies have been reduced, which was not the case in the 1980s and 1990s, when the main fiscal adjustment was through the retrenchment of spending. A significant development for the GCC was the introduction of VAT in Saudi Arabia and the UAE on 1 January 2018 and in Bahrain in January 2019. This was a vital initial step in developing tax revenue in the region, which has a weak tax base.
5 PHasEs In Gcc FIscal rEForm
The pace and focus of fiscal consolidation across the GCC has varied over the past few years. For the main fiscal reform measures introduced, please see Appendix A.
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Fig. 9.8 GCC: Drivers of total GCC spending growth, by capital and current expenditure. (Source: Calculated from regional statistical agencies and IMF GDP data)
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5.1 Phase 1: Expenditure Cutbacks and Subsidy Reforms in 2015 and 2016
The initial response by governments was to substantially cut back govern-ment expenditure, especially on the capital front. It is generally harder to retrench current expenditure in the GCC, given the dominance of public sector wages. Weighted GCC government expenditure fell by c.11.4% in 2015 and by a further 11.1% in 2016. In 2015, Kuwait, Saudi Arabia and the UAE saw a double-digit contraction in government spending. Between 2014 and 2018, Qatar and Kuwait saw a significant pullback in govern-ment spending. The UAE drop was the least among the hydrocarbon richer per capita countries, as Dubai adopted an expansionary fiscal posi-tion, whereas Abu Dhabi actually was particularly proactive in cutting gov-ernment spending. The hydrocarbon richer per capita countries are generally in a stronger position to reduce government spending as a lower amount of total expenditure goes on public sector wages, reflecting the difficulties in cutting this key component of current expenditure. Nevertheless, Saudi Arabia and Oman also saw a significant retrenchment in total expenditure during this period, with only Bahrain seeing limited pullback in expenditure during this period (Figs. 9.9 and 9.10).
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Fig. 9.9 GCC: Government sharply pulled back spending in 2015 and 2016 in response to the lower oil price. (Source: Calculated from regional statistical agen-cies and IMF data)
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Alongside a direct pullback in government spending, GCC govern-ments also adopted wider measures to strengthen their fiscal positions. First, a number of countries have also focused on streamlining govern-ment related entities (GRE), so as to reduce costs and potentially increase returns for the government. This has included job cuts alongside mergers amongst entities in similar economic areas. The objective is to boost effi-ciencies and extract cost synergies. This trend was most visible in Abu Dhabi, where mergers were seen in a number of areas including amongst banks and companies in the hydrocarbon sector. In Abu Dhabi, there have also been signs that GREs have had to become more reliant on raising their own funding or unlocking value of their assets to meet spending and development plans, thereby reducing the support required from the cen-tral government. A later example of this is the part privatization of ADNOC distribution in December 2017. In Qatar, the rationalization included reducing the GRE workforce, with Qatargas and RasGas also merging. The new entity, called Qatargas, started operations on 1 January 2018. There were wider adjustments, with a number of the major GCC corporates having some form or degree of government ownership, includ-ing national oil companies, national utilities companies, telecoms opera-tors, chemicals or real estate firms.
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Fig. 9.10 GCC: Change in government spending from 2014 to 2018. (Source: Calculated from regional statistical agencies and IMF data)
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Second, there were also increases in a number of government fees and the introduction of new ones. Importantly, progress was made on subsidy reforms—which is vital to improving fiscal sustainability, especially as the marginal ability to reduce spending moderate after the first few years. Subsidy reforms have mostly centered on rising fuel and utility prices, with the UAE kicking off the process in 2015 after some earlier price adjust-ments in the UAE and Qatar. Notably, these reforms have impacted nationals as well as expatriates, alongside corporates. UAE and Saudi Arabia have made some significant reductions in their subsidy framework, whilst Kuwait has seen limited reforms with ongoing opposition from the National Assembly. See Moerenhout in this volume for a detailed over-view of energy subsidy reforms.
Third, there were moderate labor sector reforms. In a significant move, Saudi Arabia moved to reduce public sector wages and benefits in October 2016. This was notable, as reducing public sector wages had been/is seen as socially sensitive, especially, given the greater proportion of nationals working in the public sector versus the private. However, these were fairly short-lived.
5.2 Phase 2: Reduction in Pace of Reform in 2017; Stabilization in Spending
The pace of fiscal reform moderated markedly in 2017, which partly high-lights reform fatigue and the difficulty of sustaining a multi-year reform program, in our view (Fig. 9.11). The weakening in economic momentum as a result of fiscal adjustments limited the ability of the economy to absorb new measures. This is particularly magnified in the GCC by the dominant role of the government in driving economic activity. Notably, a critical fac-tor supporting the more gradual pace of fiscal adjustment in 2017 was a rise in the oil price, especially in 2H2017. Central to this was the change in OPEC’s oil policy from one of increasing oil production to increase market share (2015 and 2016) to one of cutting output to help reduce the global oversupply and push up the price. The non-OPEC countries involved in this deal included Oman and Bahrain, alongside large global producers, such as Russia. Compliance was strong in 2017, in a large part due to greater-than-required production cuts from Saudi Arabia.
Most of the narrowing in GCC deficits in 2017 was largely due to higher oil revenue, albeit overall spending was also restrained and the pace of fiscal reform slowed. Weighted GCC fiscal spending was virtually flat in
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2017, rising by a modest 0.9%. This spending growth calculation is based on delayed payments from previous years made by Saudi Arabia govern-ment contractors in end-2016 (around SAR80 billion) being included in the 2016 fiscal accounts, alongside for “surplus projects” (SAR25 billion) (Kingdom of Saudi Arabia 2016a, 14).
There were some limited new fiscal reforms, including the introduction of an excise tax on harmful goods (cigarettes, sugary and energy drinks) in Saudi Arabia (June) UAE (October) and Bahrain (December). Kuwait and Oman also reduced water and electricity subsidies in 2017, aimed at certain sectors (Appendix A). Saudi Arabia did not progress with further subsidy reforms that were planned for the year under its Fiscal Balance Program 2020 (Kingdom of Saudi Arabia 2016b, 38). These included linking electricity 100% to reference prices and raising gasoline and diesel prices. Both were initially planned for mid-2017. Overall, there were lim-ited major fiscal reforms in 2017.
There were however also some reversals of earlier reforms. In Saudi Arabia, public sector wages and benefits introduced in October 2016 were reversed (April 2017). A decree reinstated all allowances, financial benefits and bonuses to public employees and military staff. Moreover, a two- month salary bonus for forces fighting on the frontline in Yemen was announced. Moreover, in December 2017, the government pushed out its balanced budget target to 2023 from the 2020 date initially set in the Fiscal Balance Program 2020 (Kingdom of Saudi Arabia 2017, 5). This
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Phase1 -2015-2016- Deep cutbacks in government spending, particualrly capital- Subsidy refroms -fuel and utility prices raisedImpact -Marked softening in domestic demand
Oil policy focusing on maintianing market shareOil policy focusing on market rebalancing -namely reducing global inventories to support the oil price, but suppling market at times of stress
Phase 3 –2018-2019- Variation in deepening non-oil revenue -VAT (UAE, Saudi and Bahrain), excise tax- Some limited further subsidy reforms- Increase in govt. expenditureImpact -Further moderate pick-up in domestic demand, though still weak
Brent crude, USD p/bPhase 2 -2017 - Stabilisation in government expenditure- Tentative increase in government revenues (excise tax)Impact -Some breathing space to absorb earlier fiscal consolidation and relief pickup in non-oil activity; Limited growth support
Fig. 9.11 GCC: Phases of fiscal reforms relative to oil price developments and policy. (Source: Reuters (oil price), authors’ assumptions)
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allows more time to introduce reforms as well as to generate greater gov-ernment expenditure. Subsidy price reforms (including fuel, gas for indus-try and utility prices) will be stretched over a longer period, with adjustments occurring until 2025 to reach international levels.
5.3 Phase 3: Shift to Expansionary Fiscal Stance from 2018; Introduction of VAT
After years of fiscal reforms that have placed downward pressure on eco-nomic activity, GCC governments’ priorities started showing some signs of shifting to supporting growth from 2018 on. The fiscal budgets for 2018 indicated a clear shift towards expansionary spending stances to sup-port economic activity. The stronger oil price outlook for 2018 supported the higher government spending, requiring a weaker magnitude of overall fiscal adjustment (expenditure and reforms combined). We estimate that aggregate government spending rose to 7.2% in 2018, though again there were variations is the rise in expenditure across the region. Saudi Arabia particularly saw a significant increase, with total spending rising by 10.8% in 2018. Most of the marked fiscal improvement in 2018 in the GCC fiscal positions was largely due to higher hydrocarbon revenues and GCC fiscal positions strengthened despite the pickup in government spending.
Most of the fiscal reforms across the GCC focus on deepening non-oil revenue (Figs. 9.12 and 9.13), while raising government expenditure to support economic activity and meet wider medium-term economic goals, including diversification. Nevertheless, the reform measures were more generally periodic with differences between countries. The most signifi-cant and coordinated policy was between Saudi Arabia and the UAE with the introduction of VAT. Moreover, Saudi Arabia and Bahrain also imple-mented another round of energy subsidy reforms. There have been some relatively small moves to boost non-oil revenue, including raising the cost of government fees and introducing new ones. As noted earlier, some GCC countries (Bahrain, Saudi Arabia and UAE) have introduced an excise tax on harmful goods, such as tobacco and sugary drinks. There have only been limited attempts at tax reform across the region, with only Oman making some progress. Oman raised the corporate tax rate from 12% to 15% for all companies in February 2017, eliminating the exemp-tion on the first OMR 30,000 of taxable profits that was previously in place. Oman also sold 10% stake on the Khazzan gas field at the end of 2018 to Malaysia’s Petronas, as a way to raise revenue.
M. MALIK AND T. NAGESH
233
%, of non-oil GDP (2015)
0
10
20
30
40
50
60
GC
C
Alg
eria
Ang
ola
Mex
ico
Kaz
akhs
tan
Nig
eria
Oil Revenue Non-oil Tax Revenue Non-oil Non-tax Revenue
Fig. 9.12 Global: GCC countries more reliant on hydrocarbon revenues than other commodity producers. (Source: IMF [2016, 9])
%, hydrocarbons as a % of total government revenue
0
20
40
60
80
100
Kuw
ait
Oman
Saudi
Bahrain
Qatar
UAE
2012-14 2015-17
Fig. 9.13 GCC: Hydrocarbon earnings still dominate revenues; Kuwait and Bahrain see smallest reduction. (Source: Calculated from regional statistical agen-cies and IMF data)
9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…
234
5.4 VAT Introduction, the Main Reform in Phase 3
The introduction of VAT is a highly positive development toward deepen-ing and diversifying government revenues and deepening taxable income. The weak tax across the GCC has been a central factor for hydrocarbon revenue’s dominance of total revenue despite the recent moves to reduce subsidies and broaden and increase government fees. The GCC states depend on hydrocarbon revenues more than other high commodity- exporting economies, with hydrocarbon revenues still accounting for between 50–85% of total revenues despite the fall in the oil price. We believe that the 5% standard VAT rate has been set to balance raising gov-ernment revenue with limiting downside pressure on economic activity (by dampening domestic demand). The 5% rate is low on a global basis. The average VAT rate globally is c.15%, with most countries having seen a rise in their VAT rates over time.
The UAE raised AED27 billion in revenue from VAT in 2018—equiva-lent to around 1.8% of GDP. ADCB estimated that Saudi Arabia should have raised c.1.5–1.6% of GDP in the first year of its VAT introduction (ADCB 2017, 1). ADCB noted that the UAE and Saudi Arabia will likely see the greatest proportional revenue generation in the GCC. In the case of the UAE, this reflects the larger share of private consumption in the economy. Meanwhile, Saudi Arabia has implemented a broad VAT base aimed at maximizing revenue from the new tax, including in areas such as private education and healthcare. Revenue raised by VAT is expected to increase from the second year as private consumption normalizes.
Whilst the introduction of VAT in the GCC was meant to be coordi-nated to avoid competitive distortions across the region, there are indica-tions that other GCC countries could see delays. Under the Unified VAT Agreement, which outlines a common framework, other GCC countries have 12 months to introduce the tax once the first two have done so. Indeed, by the time of publishing, only Bahrain had introduced VAT in January 2019 linked to its Fiscal Balance Program, which was announced in October 2018 and aims to balance the fiscal budget by 2022. The fiscal program is vital for the GCC five-year support package for Bahrain. However, indications suggest the VAT base is likely to have been narrower than those in UAE and Saudi Arabia, with more areas being zero-rated. For example, oil products would be exempt from VAT in Bahrain.
In Kuwait, the National Assembly’s budget committee announced in May 2018 that the government will postpone the implementation of VAT until 2021. Finance minister Nayef al-Hajraf noted in an interview that
M. MALIK AND T. NAGESH
235
the government is facing opposition from parliament to VAT (Bloomberg 2018). Qatar has as yet given no indication as to when it plans to imple-ment the indirect tax despite having made solid progress with the frame-work in 2017. Meanwhile, Oman has announced that it will postpone introduction until 2021, as outlined in the July 2019 Government of Oman bond prospectus (Reuters 2019). Earlier indications suggested that Oman will likely introduce a narrow VAT base that will exclude areas such as food, included in Saudi Arabia and the UAE (ADCB 2018, 9).
5.5 Measures to Support Growth
However, Saudi Arabia and UAE both introduced measures in 2018 to bolster economic activity, which had been impacted by the fiscal policy. In the UAE, a number of wider factors were also acting as headwinds to the non-oil sectors, including the indirect impact of fiscal reforms in other countries contributing to weak external demand. We believe that the direct support in Saudi Arabia was much greater in 2019, with the mea-sures introduced largely cancelling the fiscal reforms (VAT, subsidy reduc-tions, rise in expatriate fees, etc.). On an individual household basis, we believe that some will not be fully insulated from the impact of fiscal reforms, particularly those working in the private sector and expatriates. In the case of the UAE, the support measures were wider based (i.e. rather than fiscal based), including changes to investment regulation. Thus, we believe that the UAE likely saw fiscal consolidation in 2018 with the intro-duction of VAT, while in the case of Saudi Arabia it was largely offset by the higher government spending.
In the case of Saudi Arabia, a public sector support package was announced in early January, just days after the introduction of VAT and the reduction in electricity and fuel tariffs. The one-year package was aimed at reducing the burden of the fiscal reforms implemented, with a number of corporates following the government by temporarily boosting wages for some nationals including Aramco and SABIC. The support package included a cost of living allowance and bonus for civil servants and military personnel (see later for more details). Thus the overall effect of the government’s fiscal reforms measures in 2018 was muted by the measures that it introduced to shield the national population from the introduction of VAT and lower subsidies. Alongside the handout package, Saudi Arabia also introduced a Citizens Account Program—transfers to support low- and middle-income families—introduced in end December
9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…
236
2017. The program eventually developed into a comprehensive social security platform. Notably, the public sector handout package was extended for a further year and will also be paid in 2019. The preliminary data for 2018 indicated that the government’s current expenditure (which includes wages) rose by a significant 14.3% in 2018, up SAR103.2 billion. Investment spending contracted by SAR2.6 billion in 2018, down −1.2% (Fig. 9.14).
In the case of the UAE, a number of economic support packages were announced in mid-2018—on both a country-wide and emirate levels—with additional details being announced subsequently. The support pack-ages look to (1) reduce short-term pressure on corporates; (2) boost the competitiveness of the economy; (3) structurally strengthen the business environment and raise investment levels (domestic and international); and (5) support human capital development and accumulation, amongst oth-ers. On a country-wide basis, there have been announcements related to changes to residency and investment laws, including lengthening resi-dency visas for up to 10 years for professionals in key sectors and for for-eign investors establishing businesses in the country. Moreover, companies will be allowed to own 100% of their business outside free trade zones (the current limit is 49%) in certain sectors. The various packages also had a number of measures on the fiscal side, inclusive of reductions in fees for government services (Abu Dhabi and Dubai), alongside the outlook for higher spending in areas, such as housing, roads, infrastructure and
PP contribution to GCC real non-oil GDP growth
012345678
2012
2013
2014
2015
2016
2017
2018
e
2019
f
Bahrain Oman KuwaitQatar UAE SaudiGCC weighted growth
Fig. 9.14 GCC: Gradual recovery in real non-oil GDP growth from 2017 with modest pickup in government spending and more limited fiscal reforms. (Source: Calculated from regional central banks, statistical agencies and IMF data, ADCB estimates (2019, 4))
M. MALIK AND T. NAGESH
237
healthcare. For more details of the measures introduced to support eco-nomic activity, please see Appendix B. There have been more announce-ments related to these measures in 2019, either providing more details or broadening the measures.
Fiscal developments in 2019 so far indicate an overall continuation in the 2018 fiscal stance, that is, one of expansionary spending stance, mea-sures to support growth, with limited fiscal reforms in 2019, as govern-ments continue to look to support their respective countries’ growth outlook over further fiscal consolidation. A number of countries announced expansionary budget, with the UAE and Saudi budgets pointing to the greatest planned increase in spending. Data showed that total government spending in Saudi expanded by 8.5% in 1Q2019. Fiscal reforms in 2019 have remained patchy and relatively limited—such as the introduction of an excise tax in Qatar and Oman, rise in water prices in Oman and higher expat levies (individuals and corporates) in Saudi Arabia. However, the Saudi government announced a relief scheme for some companies to ease the impact of rising labor costs in February 2019. Saudi Arabia also announced new retail fuel prices for 2Q2019 (effective 14 April), with Aramco announcing that retail fuel prices will be set on a quarterly basis, subject to crude oil export prices. The only key exception where we expect to see rising fiscal consolidation and reforms is Bahrain, linked to its medium-term fiscal adjustment program. Meanwhile, OPEC+ countries again decided to cut output from January 2019 to support the oil price, with the production targets extended from July 2019. Nevertheless, the ability to loosen fiscal policy remains limited with the current oil price, though with the variations linked to the hydrocarbon endowment and the BBE oil price.
6 GrEatEst adjustmEnt by country
Alongside the variations in the timeline of reforms, there has been varying progress in the pace of reform across the GCC as well. The UAE and to a lesser degree Saudi Arabia have been the most proactive in introducing fiscal reforms. This reflects that other economic, social and political factors are important for the ability of regional governments to progress with fis-cal reforms. However, we believe that hydrocarbon endowment will likely play a strong role, especially in terms of implementing a multi-year reform program. Factors likely contributing include the variations in GDP per
9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…
238
capita amongst the national population across the region and their ability to absorb fiscal adjustments, especially on a cumulative basis.
The UAE has frontloaded much of the fiscal adjustment and cutback in spending. The pace of subsidy reform in Abu Dhabi and the broadening and raising of government fees have occurred at a steady and staggered pace since early 2015 and early 2018 (with the introduction of VAT). The UAE, with its high hydrocarbon endowment per capita and greater pace of fiscal reform, has one of the strongest fiscal positions among GCC countries, in our view. Moreover, it benefits from the more diversified nature of Dubai’s economy, which however was not immune to the fall in the oil price, given the softening in regional demand.
In Saudi Arabia, the pace of reform has been patchier despite announc-ing a very ambitious fiscal reform program in 2016 for a balanced budget by 2020, though this target was then extended to 2023. There have been two main phases of subsidy reforms in Saudi Arabia—(1) end-2015 and January 2016 and (2) January 2018. The impact of the second round of subsidy reforms on Saudi citizens and the introduction of VAT was damp-ened shortly after, with the introduction of an allowance package for pub-lic sector employees. Moreover, the reduction in public sector benefits in Saudi Arabia was short-lived and was reversed. Overall, this still reflects the sensitivity and cautiousness in implementing fiscal reforms that touch Saudi households (Table 9.3).
The other four GCC countries have seen a more moderate pace of fiscal reform, in our focus time period. There have been no major reforms in Qatar since 2017—following the regional developments, the govern-ment’s focus is on stabilizing and supporting the economy. In Kuwait, there has been substantial populist opposition to fiscal reform, led by the National Assembly. This is the most independent legislature in the GCC and a central stumbling block for the government to make progress with its fiscal reforms. For Bahrain, wider GCC support was vital for the invest-ment program, given the limited fiscal reforms. However, going forward, the pace of fiscal reforms in Bahrain is expected to strengthen for contin-ued GCC support. GCC countries (Kuwait, Saudi Arabia and UAE) pledged USD10 billion in aid to Bahrain in October 2018, significantly reducing short-term funding pressures. The GCC support package will be spread over five years and will be linked to Bahrain’s Fiscal Balance Program, which was announced straight after the aid package and aims to balance the budget by 2022. As noted earlier, VAT was already introduced
M. MALIK AND T. NAGESH
239
in 2019 and the 2019 draft budget sees a 12% drop in government spend-ing in 2019.
The hydrocarbon poorer per capita countries tend to spend more on wages and salaries as a total share of spending, whilst debt servicing costs have also been increasing with rising debt levels. Moreover, with higher GDP per capita in the hydrocarbon richer per capita countries, their popu-lations can more easily absorb fiscal reforms, though it is also of course a function of other factors, including a change in the social contract. The larger expatriate populations relative to domestic populations in the hydrocarbon richer per capita counties also support greater fiscal reforms. On the other hand, the nationals of the relatively hydrocarbon poorer per capita countries are more impacted by the subsidy reforms, resulting in some cases in greater pushback. Moreover, the need for fiscal reform tends to be greater in these countries, though this can be a positive point in ultimately supporting fiscal reforms going forward.
7 conclusIon
GCC fiscal reforms have been much wider than seen in previous oil price downturns, with areas that were previously seen as too sensitive to tackle are open to reform and change. GCC countries have implemented a num-ber of reforms since 2014, alongside a deep pullback in government spending—the main earlier method of adjusting to lower oil price. The reduction in subsidies and the introduction of taxes, including for the
Table 9.3 Components of allowance package, announced on 6 January 2018
Monthly cost of living allowance for one year
• Military and Civil servants SAR1000 • Retirement Pension and Social-benefit Recipients SAR500Social Security Benefit payment SAR500Student allowance 10% increaseVAT covered by government for first home purchase for nationals Up to
SAR850,000VAT covered for private healthcare and education services for nationals
–
Payment to military personnel serving in Southern border SAR5000Annual Bonus for Military and Civil servants who worked in 2017 –
Source: Various media sources, cited in ADCB (2018, 2)
9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…
240
national population, has been significant developments in our view. Despite this, oil income continues to be the main revenue source for GCC government and the need for further reforms to deepen tax revenue remains. Thus, while GCC economies continue to be reliant on hydrocar-bon revenue and the social contracts remain, we continue to see hydrocar-bon richer per capita countries as being the most sustainable in fiscal terms and in the strongest position to withstand a low oil price backdrop. These governments can better support their national populations.
However, the reforms program has not been uniform, either on a coun-try basis or in a steady implementation of the adjustment period. On a country basis, the UAE and Saudi Arabia have seen the greatest pace of fiscal reforms out of all the GCC countries since 2015—one hydrocarbon richer per capita and one hydrocarbon poorer per capita. This indicates that other economic, social and political factors are important for the abil-ity of regional governments to progress with fiscal reforms beyond the hydrocarbon endowment per capita of countries. However, we believe that hydrocarbon endowment will likely play a strong role, especially in terms of implementing a multi-year reform program. Factors likely con-tributing include the variations in GDP per capita amongst the national population across the region and their ability to absorb fiscal adjustments, especially on a cumulative basis. Indeed, Saudi Arabia implemented a number of measures to limit the impact of reforms, particularly following the introduction of VAT and subsidy reforms in early 2018. In the case of the UAE, fuel prices have been liberalized and utility prices are likely close to market rates. Most of the UAE’s fiscal reforms have had to be absorbed by the economy, with limited measures to dampen the impact of reforms. However, the UAE has generally had to raise prices by a lower magnitude than Saudi Arabia, as they were not so low in absolute terms to start with.
The GCC developments highlight the difficulties in implementing a multi-year fiscal reform program during times of low oil prices, whilst also looking to widen the economic base. This is especially the case when the government has largely remained the main driver of economic activity and domestic demand, either directly through government spending and pol-icy or via government-related entities. The narrow economic (diversifica-tion) and private sector base highlights the difficulty in implementing a multi-year fiscal adjustment and austerity program. The fiscal consolida-tion had led to a sharp slowdown in economic activity, which in turn limits the ability of the economy to absorb new fiscal reforms. In many other regions and countries, fiscal policy is often counter-cyclical to the wider
M. MALIK AND T. NAGESH
241
economy, whilst, in the GCC, the impact of consolidation is magnified by corporate entities are closely linked to governments and their spending plans. Moreover, with the largely ongoing social contract and the difficul-ties in the government to increase employment numbers, labor policies are placing additional pressures on the private sectors at times when they are expected to drive growth and support the diversification of the economy.
It remains vital for GCC countries to continue with their fiscal reform programs, to reduce the reliance on the oil sector. Two factors will be central to boosting fiscal sustainability across the region, in our view: (1) the deepening of the tax base and (2) lowering the wage composition of government spending. Hydrocarbon earnings still dominate government revenue and are the main factors driving the overall fiscal position (magni-tude of surplus or deficit). GCC tax levels remain low (corporate income tax, individual income tax and VAT) on a MENA and global basis. For some countries, further subsidy reforms are also required. A number of factors will be important for developing the tax base, including reducing the role of the public sector, improving the business climate and a frame-work for supporting private sector growth. We focus on the issue of labor in our next chapter.
The need to progress with the fiscal reforms is vital, given the ongoing challenges to the oil sector is expected to face, including from improving technology, which will have supply and demand implications. Having a medium- to longer-term fiscal reform program, which progresses at a steady and gradual pace, could help with the implementation. At the same time, wider economic objectives could also be included to improve the sustainability of a fiscal reform framework and raise the capacity of the economies. Focus should also be on targeted measures, spending and investment to support key sectors for diversification, which will be vital in deepening the economy and absorbing further fiscal reforms. Indeed, the earlier period of high government spending growth from the early-2000s did not result in any meaningful economic diversification of the economy and the rise in government spending from 2008 has tended to be on the current side (rather than capital). Measures to attract FDI and strengthen the business environment will also be important. The gradual pace of reform should continue during times of higher oil prices and government spending should be very much targeted towards boosting investment rather than on increasing handouts, though developing an effective social protection framework to support the most vulnerable is important. Greater diversification and further developing the private sector will also be neces-sary for increasing the employment opportunities for nationals.
9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…
242
aPP
En
dIx
a: K
Ey
FIsc
al r
EFo
rm
s b
y G
cc
co
un
tr
IEs
Tab
le 9
.4
GC
C: S
umm
ary
of fi
scal
ref
orm
mea
sure
s un
til m
id-2
019
Bah
rain
Apr
-10
Gas
pri
ce fo
r ne
w in
dust
rial
cus
tom
ers
incr
ease
d fr
om U
SD1.
3 to
USD
2.5.
Jan-
12G
as p
rice
for
exis
ting
indu
stri
al c
usto
mer
s in
crea
sed
50%
from
USD
1.5
to U
SD2.
25 p
er M
MB
tu; p
rice
for
new
indu
stri
al
cust
omer
s re
mai
ns a
t U
SD2.
5 pe
r M
MB
tu.
Oct
-13
Ele
ctri
city
and
wat
er t
ariff
str
uctu
re a
djus
ted
for
non-
dom
estic
use
rs, i
ncre
asin
g ta
riff
s fo
r hi
gher
con
sum
ptio
n.A
pr-1
5G
as p
rice
incr
ease
d fo
r in
dust
rial
use
rs t
o U
SD0.
25 p
er M
MB
tu; p
lan
for
pric
e to
rea
ch U
SD4
per
MM
Btu
by
Apr
il 20
21.
Oct
-15
Bah
rain
rem
oved
gov
ernm
ent
subs
idie
s on
mea
t, w
ith t
he p
rice
of b
eef a
nd c
hick
en m
ore
than
dou
blin
g.Ja
n-16
Gas
olin
e pr
ices
incr
ease
d: 6
0% fo
r su
per,
56.3
% fo
r re
gula
r.M
ar-1
6Pr
ices
of w
ater
and
ele
ctri
city
incr
ease
d fo
r ex
patr
iate
s, b
ut s
ubsi
dize
d ra
tes
cont
inui
ng fo
r na
tiona
ls. M
ove
as in
itial
sta
ge o
f fo
ur-y
ear
refo
rm p
rogr
am. W
ill c
ontin
ue t
o in
crea
se e
ffec
tive
from
Mar
ch e
very
yea
r til
l 201
9D
ec-1
7B
ahra
in in
trod
uces
an
exci
se t
ax o
n ha
rmfu
l pro
duct
s on
20
Dec
embe
r. T
obac
co a
nd e
nerg
y dr
inks
tax
ed a
t 10
0% a
nd
carb
onat
ed d
rink
s (e
x-sp
arkl
ing
wat
er)
at 5
0%.
Jan-
18G
asol
ine
pric
es w
ere
rais
ed: 2
5% fo
r su
per
and
12%
for
regu
lar.
Jan-
2019
VA
T in
trod
uced
at
5%.
Kuw
ait
Jan-
15K
uwai
t do
uble
s pr
ice
of d
iese
l; ke
rose
ne p
rice
s ra
ised
—bu
t bo
th t
hese
mov
es w
ere
subs
eque
ntly
rev
erse
d.A
pr-1
6A
ppro
ves
pric
e in
crea
ses
to e
lect
rici
ty a
nd w
ater
cha
rges
for
expa
tria
tes,
but
app
licat
ion
will
not
tak
e ef
fect
bef
ore
Sept
201
7.Ju
n-16
Rai
sed
the
fees
for
issu
ing
and
rene
win
g w
ork
perm
its. T
he fe
e fo
r is
suin
g an
initi
al w
ork
perm
it w
as r
aise
d to
KW
D50
(fr
om
KW
D2)
, whi
lst
the
fee
for
rene
win
g a
perm
it w
as in
crea
sed
to K
WD
10 (
from
KW
D2)
. The
cos
t fo
r tr
ansf
erri
ng a
wor
k pe
rmit
(res
iden
ce o
r ch
angi
ng e
mpl
oyer
) w
as r
aise
d to
KW
D50
(fr
om K
WD
10).
The
dec
isio
n be
cam
e ef
fect
ive
from
Jun
e 1.
M
oreo
ver,
the
Kuw
aiti
gove
rnm
ent
agre
ed in
Oct
ober
to
part
ly c
ompe
nsat
e ci
tizen
s fo
r ra
isin
g pe
trol
in S
epte
mbe
r. N
atio
nals
ho
ldin
g dr
iver
’s li
cens
es w
ould
be
com
pens
ated
with
c.7
5 lit
ers
(20
gallo
ns)
a m
onth
of f
ree
petr
ol.
Sept
-16
Gas
olin
e pr
ices
incr
ease
d on
1 S
epte
mbe
r 20
16 b
y be
twee
n 40
% a
nd 7
3% d
epen
ding
on
the
grad
e of
pet
rol.
A g
over
nmen
t co
mm
ittee
will
rev
ise
the
new
pet
rol p
rice
s ev
ery
thre
e m
onth
s w
ith r
egar
d to
inte
rnat
iona
l oil
pric
es. D
espi
te t
he S
epte
mbe
r in
crea
ses,
gas
olin
e pr
ices
rem
ain
belo
w t
he li
bera
lized
mar
ket
pric
e an
d m
ost
othe
r G
CC
cou
ntri
es. M
oreo
ver,
the
gove
rnm
ent
agre
ed fr
om N
ovem
ber
2016
to
com
pens
ate
citiz
ens
by p
rovi
ding
75
liter
s pe
r K
uwai
ti dr
iver
per
mon
th. S
tudi
es
show
tha
t av
erag
e m
onth
ly c
onsu
mpt
ion
was
c. 2
20–2
40 li
ters
per
mon
th.
M. MALIK AND T. NAGESH
243
May
-17
Kuw
ait
rais
ed e
lect
rici
ty a
nd w
ater
rat
es fo
r th
e co
mm
erci
al s
ecto
r. T
he n
ew r
ates
are
5 fi
ls (
c. U
SD0.
016)
per
kW
h of
el
ectr
icity
, up
from
2 fi
ls e
arlie
r. W
ater
cha
rges
incr
ease
d to
KD
2 (U
SD6.
63)
per
1000
impe
rial
gal
lons
of w
ater
, fro
m
KW
D0.
8 ea
rlie
r.A
ug-1
7K
uwai
t ra
ised
ele
ctri
city
and
wat
er r
ates
for
the
“inv
estm
ent
sect
or”
on 2
2 A
ugus
t. T
he n
ew r
ates
are
5 fi
ls (
c.U
SD0.
016)
per
kW
h of
ele
ctri
city
and
KD
2 (U
SD6.
63)
per
1000
impe
rial
gal
lons
of w
ater
. Thi
s ca
tego
ry in
clud
es r
eal e
stat
e pr
oper
ties
and
thus
will
impa
ct t
he m
ajor
ity o
f exp
atri
ates
, who
ren
t pr
oper
ties.
The
incr
ease
is le
ss t
han
the
initi
ally
pro
pose
d ch
arge
s of
K
D0.
25 p
er k
ilow
att
and
KD
0.15
per
kilo
wat
t, r
espe
ctiv
ely.
Oct
-17
Kuw
ait
incr
ease
d fe
es fo
r us
ing
publ
ic h
ealth
ser
vice
s fo
r ex
patr
iate
s an
d vi
sito
rs.
Nov
-17
Wat
er a
nd e
lect
rici
ty t
ariff
s of
the
gov
ernm
ent
sect
or r
ose
on 2
2 N
ovem
ber
2017
. Ele
ctri
city
pri
ces
incr
ease
d to
USD
0.08
2 (K
WD
0.02
5) p
er k
Wh
and
wat
er p
rice
s fr
om U
SD2.
65 (
KW
D0.
8) t
o U
SD13
.27
(KW
D4)
per
100
0 ga
llons
.A
pr-1
9E
xpat
riat
es in
Kuw
ait
will
now
hav
e to
pay
a fe
e of
KD
10 (
USD
32.8
) pe
r vi
sit
to a
cces
s he
alth
care
ser
vice
s in
pub
lic h
ospi
tals
.O
man
2012
& 2
013
Gas
pri
ce fo
r in
dust
rial
use
rs r
aise
d by
USD
0.5
per
MM
Btu
per
yea
r.Ja
n-15
Pric
e of
nat
ural
gas
sol
d to
indu
stri
al s
ecto
r do
uble
d to
USD
3 pe
r M
MB
tu fr
om U
SD1.
5 pe
r M
MB
tu, t
o be
follo
wed
by
a 3%
in
crea
se p
er y
ear.
Jan-
16O
man
rai
ses
gaso
line
and
dies
el p
rice
s—su
per
incr
ease
d 33
.3%
, reg
ular
22.
8%, d
iese
l 9.6
%. F
rom
Feb
ruar
y 20
16, f
uel p
rice
s ad
just
ed m
onth
ly in
line
with
inte
rnat
iona
l pri
ce m
ovem
ents
.M
ar-1
6T
he P
ublic
Aut
hori
ty fo
r W
ater
and
Ele
ctri
city
(PA
EW
) ra
ised
the
wat
er p
rice
s fo
r go
vern
men
t, c
omm
erci
al a
nd in
dust
rial
bo
dies
to
a fla
t ra
te o
f 3.5
bai
za (
bz)
per
gallo
n, u
p fr
om t
he e
arlie
r 3b
z. T
he a
djus
ted
pric
e is
stil
l bel
ow t
he a
vera
ge c
ost
of
prod
uctio
n an
d di
stri
butio
n of
wat
er o
f nea
rly
7bz
per
gallo
n.Ju
l-16
Om
an’s
Pub
lic A
utho
rity
for
Civ
il A
viat
ion
(PA
CA
) an
noun
ces
that
it w
ill r
aise
fees
cha
rged
for
air
traf
fic t
hrou
gh t
he
Sulta
nate
. Out
boun
d ai
rlin
e pa
ssen
gers
will
hav
e to
pay
OM
R2
extr
a as
tax
for
ever
y tr
avel
from
Om
an a
irpo
rts
from
1 J
uly.
Jan-
17O
man
intr
oduc
ed c
ost
refle
ctiv
e el
ectr
icity
tar
iffs
for
larg
e in
dust
rial
, com
mer
cial
and
gov
ernm
ent
cons
umer
s fr
om 1
Jan
uary
20
17, e
ffec
tivel
y en
ding
sub
sidi
es fo
r su
ch c
usto
mer
s. A
hig
her
tari
ff r
ate
will
be
appl
ied
to a
ppro
xim
atel
y 10
K e
lect
rici
ty
acco
unts
tha
t co
nsum
e ov
er 1
50 m
egaw
atts
per
hou
r ea
ch y
ear.
Offi
cial
est
imat
es s
ugge
st t
hat
this
wou
ld im
pact
aro
und
1% o
f us
ers,
whi
ch t
oget
her
use
c. 3
0% o
f the
ele
ctri
city
out
put
and
acco
unt
for
20%
of g
over
nmen
t su
bsid
ies
for
pow
er g
ener
atio
n pe
r ye
ar. T
he A
utho
rity
for
Ele
ctri
city
Reg
ulat
ion
(AE
R)
has
indi
cate
d th
at t
he s
ubsi
dy r
efor
m s
houl
d am
ount
to
arou
nd
OM
R10
0 m
illio
n, w
hich
we
estim
ate
at a
roun
d 1%
of 2
017
GD
P.Fe
b-17
Gen
eral
cor
pora
te in
com
e ta
x ra
te r
aise
d fr
om 1
2% t
o 15
%; m
inim
um t
axab
le in
com
e ex
empt
ion
of O
MR
30,
000
rem
oved
.
(con
tinu
ed)
9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…
244
Apr
-17
Cos
t of
sho
rt s
tay
tour
ist
visa
s w
as r
aise
d to
OM
R20
from
the
pre
viou
s O
MR
5. T
he le
ngth
of s
tay
for
the
visa
has
bee
n in
crea
sed
from
10
days
to
a m
onth
, with
furt
her
exte
nsio
ns p
ossi
ble.
Jan-
19O
man
Oil
Com
pany
Exp
lora
tion
& P
rodu
ctio
n (O
OC
EP)
, a s
ubsi
diar
y of
Om
an O
il C
ompa
ny (
OO
C),
sol
d a
10%
in t
he
gian
t K
hazz
an g
as fi
eld
and
proj
ect
(Blo
ck 6
1) t
o M
alay
sia’
s Pe
tron
as. T
he d
eal w
as a
gree
d in
Oct
ober
201
8 th
roug
h th
e tr
ansa
ctio
n lik
ely
com
plet
ed e
ither
in e
nd 2
018
or e
arly
201
9M
ar-1
9R
evis
ed t
ariff
s fo
r dr
inki
ng w
ater
sup
plie
d to
bot
h re
side
ntia
l and
com
mer
cial
est
ablis
hmen
ts a
nnou
nced
. Wat
er t
ariff
for
resi
dent
ial e
stat
es is
OM
R0.
002/
gallo
n fo
r up
to
5000
gal
lons
. Onc
e th
e m
onth
ly c
onsu
mpt
ion
pass
es 5
001
gallo
ns t
hen
the
cost
will
incr
ease
to
OM
R0.
0025
/ga
llon.
The
tar
iff fo
r go
vern
men
t in
stitu
tions
has
incr
ease
d fr
om O
MR
0.00
2/ga
llon
to
OM
R0.
0035
/ga
llon.
Jun-
19E
xcis
e ta
xes
intr
oduc
ed o
n ha
rmfu
l goo
ds o
n 15
Jun
e. T
obac
co, e
nerg
y dr
inks
, alc
ohol
and
por
k pr
oduc
ts w
ill a
ll be
tax
ed a
t 10
0%, w
ith a
50%
levy
on
carb
onat
ed s
oft
drin
ks. O
man
rev
ised
the
impo
sed
exci
se t
ax o
n al
coho
l to
50%
for
a si
x-m
onth
pe
riod
late
r in
Jun
e ac
cord
ing
to t
he M
inis
try
of F
inan
ce.
Qat
arJa
n-11
Pum
p pr
ices
of g
asol
ine
rais
ed 2
5% fo
r su
per
97 o
ctan
e (t
o Q
AR
1.1
per
liter
) an
d 30
% fo
r di
esel
(to
QA
R1
per
liter
).M
ay-1
4D
iese
l pri
ces
rais
ed 5
0% t
o Q
AR
1.50
(U
SD0.
41)
per
liter
.O
ct-1
5W
ater
and
ele
ctri
city
pri
ces
rais
ed a
nd t
iere
d ac
cord
ing
to c
onsu
mpt
ion.
Jan-
16T
he p
rice
of s
uper
pet
rol w
as r
aise
d by
30%
, whi
lst
regu
lar
petr
ol in
crea
sed
by 3
5%.
May
-16
Qat
ar d
ereg
ulat
es g
asol
ine
and
dies
el p
rice
s.A
ug-1
6Pa
ssen
ger
leav
ing
Qat
ar fr
om D
oha’
s H
amad
Int
erna
tiona
l Air
port
, inc
ludi
ng t
rans
it pa
ssen
gers
, will
be
char
ged
QA
R35
(U
SD9.
61)
for
usin
g ai
rpor
t fa
cilit
ies.
The
cha
rge
will
app
ly t
o tic
kets
issu
ed a
fter
Aug
. 30
and
for
any
trav
el s
tart
ing
on D
ec.
1 on
war
ds a
nd w
ould
be
used
to
“fur
ther
incr
ease
the
air
port
’s c
apac
ity a
nd in
vest
in n
ew in
fras
truc
ture
”.Ja
n-20
19T
he p
rice
s of
alc
ohol
, ene
rgy
drin
ks a
nd t
obac
co p
rodu
cts
have
sin
ce r
isen
by
100%
and
sug
ary
drin
ks b
y 50
%.
Saud
i Ara
bia
Jul-
10A
vera
ge p
rice
of e
lect
rici
ty s
old
to n
on-i
ndiv
idua
l use
rs r
aise
d m
ore
than
20%
. Som
e 43
% o
f tot
al c
onsu
mpt
ion
impa
cted
.D
ec-1
5Pr
ice
of w
ater
rai
sed
to S
AR
9 (f
rom
SA
R4)
per
cub
ic m
eter
for
corp
orat
e, in
dust
rial
and
gov
ernm
ent
entit
ies.
Fuel
pri
ces
rais
ed, i
nclu
ding
95
octa
ne g
asol
ine
by 5
0% t
o U
SD0.
24 p
er li
ter
and
low
er-g
rade
91
octa
ne b
y 67
%.
Jan-
16Pr
ices
of n
atur
al g
as, k
eros
ene,
cru
de o
il, h
eavy
fuel
oil,
eth
ane
and
buta
ne in
crea
sed.
Ele
ctri
city
tar
iff r
ates
for
resi
dent
ial,
com
mer
cial
and
gov
ernm
ent
user
s ra
ised
by
an a
vera
ge o
f rou
ghly
43%
. Low
-co
nsum
ptio
n us
ers
exem
pt.
Tab
le 9
.4
(con
tinue
d)
M. MALIK AND T. NAGESH
245
Jun-
16Sa
udi A
rabi
a’s
cabi
net
appr
oved
a t
ax o
n un
deve
lope
d ur
ban
land
, whi
ch h
ad b
een
unde
r di
scus
sion
for
over
a y
ear.
A 2
.5%
ta
x w
ill b
e le
vied
on
plot
s ex
ceed
ing
10 K
sqm
. The
Min
istr
y of
Hou
sing
will
spe
cify
whi
ch la
nd fa
lls u
nder
the
new
tax
law
, an
d a
fair
val
ue fo
r th
e la
nd w
ill b
e de
term
ined
by
a co
mm
ittee
. Lan
d ow
ners
are
req
uire
d to
reg
iste
r th
eir
plot
s w
ithin
six
m
onth
s of
the
rel
ease
of t
he fi
nal r
egul
atio
ns o
f the
tax
.O
ct-1
6Fe
es in
crea
sed
for
a nu
mbe
r of
gov
ernm
ent
serv
ices
. Thi
s in
clud
ed r
aisi
ng t
he c
osts
of p
orts
, pas
spor
ts, c
ar d
rivi
ng li
cens
es, c
ar
tran
sfer
s to
new
buy
ers,
tra
ffic
viol
atio
ns, r
enew
al o
f res
iden
ce p
erm
its fo
r do
mes
tic w
orke
rs, a
nd c
usto
ms
tari
ff p
rote
ctio
n fo
r 19
3 co
mm
oditi
es. M
oreo
ver,
the
pric
e of
a t
hree
-mon
th m
ulti-
entr
y vi
sa w
as in
crea
sed
to S
AR
500
(whi
ch w
as p
revi
ousl
y th
e co
st fo
r a
six-
mon
th o
ne).
The
new
fee
for
a tw
o-ye
ar m
ulti-
entr
y vi
sa w
as r
aise
d to
SA
R80
00 (
USD
2133
).O
ct-1
6C
hang
es t
o pu
blic
sec
tor
wag
es a
nd b
enefi
ts:
•
Sala
ries
of m
inis
ters
(or
tho
se o
f min
iste
rial
ran
k) r
educ
ed b
y 20
%;
•
A 1
5% r
educ
tion
in t
he a
nnua
l sub
sidy
gra
nted
to
Shou
ra C
ounc
il m
embe
rs fo
r ho
usin
g an
d fu
rnis
hing
;
• A
15%
red
uctio
n in
the
lum
p su
m p
aid
to S
hour
a C
ounc
il m
embe
rs fo
r th
eir
car
mai
nten
ance
and
fuel
cost
s fo
r fo
ur y
ears
;
• O
vert
ime
bonu
ses
wer
e cu
rbed
at
betw
een
25–5
0% o
f bas
ic s
alar
ies;
•
No
annu
al in
crem
ent
for
next
yea
r;
• H
irin
g an
d re
new
al o
f con
trac
ts fo
r ex
patr
iate
wor
kers
in n
on-e
ssen
tial s
ecto
rs s
uspe
nded
;
• A
ll ap
poin
tmen
ts in
vac
ant
post
s ha
lted;
•
Prov
isio
ns o
f veh
icle
s fo
r se
nior
offi
cial
s su
spen
ded
until
nex
t ye
ar;
•
Ann
ual l
eave
may
no
long
er e
xcee
d 30
day
s;
• M
onth
ly t
rans
port
atio
n al
low
ance
for
empl
oyee
s du
ring
vac
atio
n da
ys s
topp
ed.
Apr
-17
Cut
s to
pub
lic s
ecto
r w
ages
and
ben
efits
intr
oduc
ed in
Sep
tem
ber
2016
wer
e re
vers
ed v
ia a
roy
al d
ecre
e by
Kin
g Sa
lman
bin
A
bdul
aziz
Al S
aud
on 2
2 A
pril.
The
dec
ree
rein
stat
ed a
ll al
low
ance
s, fi
nanc
ial b
enefi
ts a
nd b
onus
es t
o pu
blic
em
ploy
ees
and
mili
tary
sta
ff. M
oreo
ver,
a tw
o-m
onth
sal
ary
bonu
s fo
r fo
rces
figh
ting
on t
he fr
ontli
ne in
Yem
en w
as a
nnou
nced
.Ju
n-17
Saud
i Ara
bia
intr
oduc
es a
n ex
cise
tax
on
harm
ful p
rodu
cts
on 1
1 Ju
ne. T
obac
co a
nd e
nerg
y dr
inks
tax
ed a
t 10
0% a
nd
carb
onat
ed d
rink
s (e
x-sp
arkl
ing
wat
er)
at 5
0%.
Jun-
17A
ll al
low
ance
s an
d bo
nuse
s to
civ
il se
rvan
ts a
nd m
ilita
ry p
erso
nnel
tha
t w
ere
canc
elle
d in
Sep
tem
ber
2016
are
ret
roac
tivel
y re
inst
ated
in J
une
2017
. Thi
s w
as a
nnou
nced
at
the
sam
e tim
e of
Pri
nce
Moh
amm
edbi
n Sa
lman
’s a
ppoi
ntm
ent
as c
row
n pr
ince
in J
une
2017
.
(con
tinu
ed)
9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…
246
Jul-
17Sa
udi A
rabi
a al
so s
tart
ed r
aisi
ng fe
es o
n th
e de
pend
ents
of e
xpat
riat
e w
orke
rs fr
om 1
Jul
y 20
17, a
t SA
R10
0 pe
r m
onth
. The
fe
es w
ill h
ave
to b
e pa
id in
adv
ance
at
the
time
of r
enew
al o
f the
wor
k vi
sas.
Jan-
18V
AT
intr
oduc
ed a
t 5%
.Ja
n-18
The
Sau
di g
over
nmen
t ra
ised
ele
ctri
city
(re
side
ntia
l and
com
mer
cial
) an
d fu
el p
rice
s on
1 J
anua
ry 2
018,
with
the
mag
nitu
de
of t
he r
ise
cons
ider
ably
gre
ater
tha
n in
the
firs
t ro
und
of s
ubsi
dy r
efor
ms
in 2
016.
The
pri
ce o
f 95
octa
ne p
etro
l jum
ped
by
126%
, whi
lst
low
er g
rade
91
octa
ne in
crea
sed
by 8
2% (
both
incl
udin
g V
AT
). N
ew r
esid
entia
l ele
ctri
city
tar
iffs
will
see
cos
ts
doub
le o
r tr
iple
for
low
er-u
se c
usto
mer
s co
mpa
red
with
the
pre
viou
s ra
tes.
Jan-
18Fe
e fo
r co
mpa
nies
on
expa
tria
te la
bor
intr
oduc
ed. F
or 2
018,
the
fee
is SA
R30
0 pe
r m
onth
on
the
num
ber
of e
xpat
riate
s eq
ual
to n
atio
nals
and
SAR
400
per
mon
th o
n ex
patr
iate
s m
ore
than
nat
iona
ls. T
he fe
e is
due
to in
crea
se in
201
9 an
d 20
20.
Feb-
19M
inis
try
of M
unic
ipal
and
Rur
al A
ffai
rs (
MM
RA
) ha
s ap
prov
ed e
xecu
tive
regu
latio
ns fo
r le
vyin
g fe
es o
n va
riou
s m
unic
ipal
se
rvic
es s
tart
ing
3 Fe
brua
ry. A
nnua
l fee
s w
ill b
e im
pose
d fo
r ga
rbag
e co
llect
ion,
incl
udin
g w
aste
from
fuel
sta
tions
, apa
rtm
ent
build
ings
, hot
els
and
reso
rts.
Ser
vice
fees
will
als
o be
levi
ed fo
r is
suin
g lic
ense
s fo
r th
e co
nstr
uctio
n of
new
bui
ldin
gs o
r fo
r th
e ex
pans
ion
of e
xist
ing
build
ings
. The
reg
ulat
ions
will
str
eam
line
the
licen
sing
of c
inem
a ha
lls a
nd t
heat
ers
to b
ring
the
m in
line
w
ith o
ther
com
mer
cial
act
iviti
es.
Apr
-19
Ret
ail f
uel p
rice
s w
ere
rais
ed—
by 4
% fo
r 95
oct
ane
petr
ol t
o SA
R2.
1 pe
r lit
re (
from
SA
R2.
02)
and
5.1%
for
91 o
ctan
e to
SA
R1.
44 p
er li
tre
(fro
m S
AR
1.37
). N
ew p
rice
s ef
fect
ive
14 A
pril
2019
. Ret
ail f
uel p
rice
s w
ill s
ubse
quen
tly b
e se
t on
a
quar
terl
y ba
sis,
sub
ject
to
crud
e oi
l exp
ort
pric
es.
May
-19
Saud
i Ara
bia
has
impo
sed
a sp
ecia
l tax
on
elec
tron
ic c
igar
ette
s an
d su
gary
dri
nks,
ext
endi
ng s
imila
r ex
cise
tax
es in
trod
uced
in
2017
. A 1
00%
tax
wou
ld b
e le
vied
on
elec
tron
ic c
igar
ette
s an
d pr
oduc
ts u
sed
in t
hem
, and
a 5
0% t
ax o
n su
gare
d dr
inks
. Sau
di
alre
ady
had
a 10
0% t
ax o
n ci
gare
ttes
and
tob
acco
pro
duct
s, a
100
% t
ax o
n en
ergy
dri
nks
and
a 50
% o
ne o
n fiz
zy d
rink
s.U
AE
2010
UA
E r
aise
s fu
el p
rice
s at
pet
rol s
tatio
ns t
wic
e in
201
0 in
initi
al g
radu
al m
oves
to
liber
aliz
e th
e m
arke
t. G
asol
ine
pric
es r
ise
by
som
e A
ED
0.35
per
lite
r.Ja
n-11
Ele
ctri
city
and
wat
er c
onsu
mpt
ion
tari
ffs
in D
ubai
incr
ease
d 15
%.
Jan-
15W
ater
and
ele
ctri
city
pri
ces
rais
ed in
Abu
Dha
bi fo
r na
tiona
ls a
nd e
xpat
riat
es. W
ater
pri
ce fo
r ex
patr
iate
s ra
ised
by
170%
, el
ectr
icity
by
40%
.A
ug-1
5U
AE
der
egul
ates
gas
olin
e an
d di
esel
pri
ces.
Gas
olin
e pr
ices
initi
ally
incr
ease
som
e 25
% (
depe
ndin
g on
gra
de);
die
sel p
rice
s cu
t by
som
e 29
%. F
uel p
rice
s ad
just
ed m
onth
ly in
line
with
inte
rnat
iona
l pri
ce m
ovem
ents
.Ja
n-16
Wat
er a
nd e
lect
rici
ty p
rice
s ra
ised
for
high
er-c
onsu
mpt
ion
expa
tria
tes
in A
bu D
habi
.
Tab
le 9
.4
(con
tinue
d)
M. MALIK AND T. NAGESH
247
Apr
-16
Abu
Dha
bi’s
AD
NO
C D
istr
ibut
ion
incr
ease
d th
e re
tail
pric
e of
uns
ubsi
dize
d liq
uefie
d pe
trol
eum
gas
(L
PG)
cylin
ders
for
Apr
il 20
16. T
he c
ost
of a
n 11
.3 k
g cy
linde
r w
as in
crea
sed
by 9
.5%
, whi
lst
a pr
ice
of a
22.
7 kg
cyl
inde
r w
as r
aise
d by
10.
8%. T
he
new
pri
ce fo
r L
PG w
ill b
e an
noun
ced
on t
he 1
0th
of e
very
mon
th b
ased
on
glob
al p
rice
s.A
pr-1
6A
bu D
habi
intr
oduc
ed a
3%
mun
icip
al fe
e—w
ill b
e ch
arge
d on
the
ann
ual v
alue
of e
xpat
riat
es’ r
enta
l con
trac
ts. T
he m
inim
um
char
ge w
ill b
e A
ED
450
per
year
, with
the
fee
back
date
d to
the
beg
inni
ng o
f Mar
ch.
May
-16
Dub
ai in
crea
sed
park
ing
fees
, with
the
pri
ce d
oubl
ing
in c
erta
in a
reas
(ef
fect
ive
28 M
ay).
Pol
ice
to s
tart
cha
rgin
g fo
r so
me
serv
ices
.Ju
n-16
Abu
Dha
bi in
trod
uces
a 4
% m
unic
ipal
ity fe
e on
hot
el b
ills
and
an A
ED
15 c
harg
e pe
r ni
ght
per
room
. The
fees
will
be
colle
cted
by
the
Abu
Dha
bi T
ouri
sm a
nd C
ultu
re A
utho
rity
(T
CA
) an
d ad
ded
to t
he g
over
nmen
t bu
dget
of t
he D
epar
tmen
t of
Mun
icip
al A
ffai
rs. D
ubai
intr
oduc
ed a
fee
of b
etw
een
AE
D7
for
budg
et h
otel
s an
d gu
esth
ouse
s an
d A
ED
20 fo
r fiv
e-st
ar
hote
ls a
nd lu
xury
hot
el a
part
men
ts in
201
4 pe
r ro
om p
er n
ight
.Ju
n-16
Pass
enge
rs t
rave
ling
from
an
airp
ort
in A
bu D
habi
and
Dub
ai p
ay a
n A
ED
35 d
epar
ture
fee
from
30
June
. Sha
rjah
had
an
noun
ced
a si
mila
r m
ove
in A
pril
2016
.Ju
l-16
Shar
jah
Mun
icip
ality
incr
ease
s te
nanc
y at
test
atio
n fe
e to
4%
, fro
m 2
%.
Jan-
17W
ater
and
ele
ctri
city
pri
ces
rais
ed fo
r co
nsum
ers,
cor
pora
te a
nd g
over
nmen
t en
titie
s.Ju
n-17
Abu
Dha
bi M
unic
ipal
ity in
crea
ses
the
fare
s fo
r ta
xis.
The
sta
rtin
g fa
re h
as b
een
incr
ease
d to
AE
D5,
from
AE
D3.
5 ea
rlie
r. T
he
char
ge fo
r ev
ery
kilo
met
er h
as r
isen
to
AE
D1.
82 fr
om A
ED
1.6.
Oct
-17
Exc
ise
tax
intr
oduc
ed o
n ha
rmfu
l pro
duct
s on
unh
ealth
y pr
oduc
ts—
100%
tax
on
toba
cco
prod
ucts
and
ene
rgy
drin
ks, w
ith
carb
onat
ed d
rink
s (e
x-sp
arkl
ing
wat
er)
at 5
0%. T
he t
ax is
exp
ecte
d to
rai
se c
.AE
D 7
bill
ion
per
annu
m.
Jan-
18V
AT
intr
oduc
ed a
t 5%
.Ju
n-18
Abu
Dha
bi r
esid
entia
l mun
icip
ality
fees
rai
sed
to 5
% o
f the
val
ue o
f an
annu
al r
enta
l con
trac
t fo
r vi
llas
and
apar
tmen
ts, u
p fr
om 3
%.
Sour
ce: I
MF,
var
ious
med
ia s
ourc
es, A
DC
B e
stim
ates
9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…
248
aPP
En
dIx
b: u
aE
KE
y Po
lIc
IEs
an
no
un
cE
d t
o s
uPP
or
t E
co
no
mIc
ac
tIV
Ity
Tab
le 9
.5
UA
E: K
ey p
olic
ies
anno
unce
d in
201
8
UA
E w
ide
May
18
Leg
isla
tion
intr
oduc
ed fo
r a
VA
T r
ever
se-c
harg
e m
echa
nism
for
the
who
lesa
le t
rade
in g
old
and
jew
elry
to
supp
ort
the
diam
ond
and
gold
sec
tors
.M
ay-1
8A
one
-mon
th s
alar
y bo
nus
for
all g
over
nmen
t em
ploy
ees
anno
unce
d to
cel
ebra
te 1
00 y
ears
sin
ce t
he b
irth
of t
he U
AE
’s
Foun
ding
Fat
her,
Shei
kh Z
ayed
. The
bon
us w
as fo
r al
l ser
ving
and
ret
ired
gov
ernm
ent
empl
oyee
s (c
ivili
ans
and
mili
tary
) an
d be
nefic
iari
es o
f soc
ial w
elfa
re. T
he b
onus
was
bas
ed o
n th
e ba
sic
mon
thly
sal
ary
with
a m
axim
um o
f AE
D50
K a
nd a
min
imum
of
AE
D5K
with
dis
burs
emen
t m
ade
in e
arly
-Jun
e. T
he b
onus
pay
men
ts t
otal
ed A
ED
1.6
billi
on (
USD
436
mill
ion)
, whi
ch w
e es
timat
e w
ill e
quat
e to
c.0
.1%
of G
DP.
May
-18
UA
E c
abin
et a
ppro
ved
chan
ges
to r
ules
gov
erni
ng e
xpat
riat
e re
side
ncy
and
fore
ign
owne
rshi
p of
com
pani
es. T
he c
hang
es w
ill
allo
w 1
00%
ow
ners
hip
of b
usin
esse
s by
glo
bal i
nves
tors
and
per
mit
resi
denc
y vi
sas
for
up t
o 10
yea
rs fo
r pr
ofes
sion
als
in c
erta
in
sect
ors
and
fore
ign
inve
stor
s. F
ive-
year
stu
dent
vis
as w
ere
also
ann
ounc
ed w
ith e
xcep
tiona
l uni
vers
ity g
radu
ates
elig
ible
for
10-y
ear
visa
s. R
efor
ms
are
to b
e in
trod
uced
by
end-
2018
.Ju
n-18
A n
umbe
r of
vis
a re
form
s w
ere
adop
ted.
The
pre
viou
s m
anda
tory
dep
osit
of A
ED
3000
per
wor
ker
in t
he p
riva
te s
ecto
r w
as
repl
aced
by
a ne
w in
sura
nce
sche
me
that
will
cos
t on
ly A
ED
60 a
nnua
lly p
er w
orke
r (e
ffec
tive
Oct
ober
201
8). T
his
will
red
uce
the
burd
en o
n em
ploy
ers
by a
roun
d A
ED
14 b
illio
n, a
ccor
ding
to
offic
ial e
stim
ates
. In
a fu
rthe
r bi
d to
sup
port
tou
rism
, tra
nsit
pass
enge
rs w
ill b
e ex
empt
from
all
entr
y fe
es fo
r th
e fir
st 4
8 ho
urs
of t
heir
vis
it to
the
UA
E. T
he v
isa
may
be
exte
nded
for
up t
o 96
hou
rs fo
r a
fee
of A
ED
50.
Jun-
18U
AE
Cen
tral
Ban
k is
sues
new
fee
caps
(43
cat
egor
ies)
for
reta
il ba
nkin
g fe
es t
o be
rev
iew
ed a
nnua
lly.
Sep-
18V
AT
ref
und
sche
me
for
tour
ists
ann
ounc
ed, d
ue t
o be
intr
oduc
ed in
end
-201
8.Se
p-18
Ret
iree
vis
a an
noun
ced,
whi
ch w
ill a
llow
exp
atri
ates
age
d 55
and
ove
r to
obt
ain
a fiv
e-ye
ar r
esid
ence
vis
a. T
he la
w w
ill c
ome
into
eff
ect
in 2
019.
App
lican
ts w
ill b
e re
quir
ed t
o ha
ve (
1) a
n in
vest
men
t in
a p
rope
rty
wor
th a
t le
ast
AE
D2
mill
ion;
(2)
fin
anci
al s
avin
gs o
f no
less
tha
n A
ED
1 m
illio
n; o
r (3
) an
act
ive
inco
me
of n
o le
ss t
han
AE
D20
K p
er m
onth
.N
ov-1
8Fe
dera
l Law
issu
ed r
egar
ding
fore
ign
dire
ct in
vest
men
t (n
ew F
DI
law
) an
noun
ced
in S
epte
mbe
r, w
hich
wen
t in
to fo
rce
in
Nov
embe
r up
on it
s pu
blic
atio
n in
the
Offi
cial
Gaz
ette
. The
new
FD
I la
w is
the
late
st in
a n
umbe
r of
pol
icie
s im
plem
ente
d to
lib
eral
ize
dom
estic
mar
kets
and
incr
ease
the
UA
E’s
com
petit
iven
ess
glob
ally
. The
new
FD
I la
w lo
oks
to a
ttra
ct fo
reig
n in
vest
men
t in
cer
tain
spe
cifie
d bu
sine
ss s
ecto
rs t
o be
ten
tativ
ely
iden
tified
in e
arly
201
9 (p
ositi
ve li
st),
whi
ch w
ill b
e in
elig
ible
fo
r m
ajor
ity fo
reig
n ow
ners
hip.
M. MALIK AND T. NAGESH
249
Jan-
19T
he U
AE
Cab
inet
app
rove
d lo
ng-t
erm
vis
a sy
stem
for
inve
stor
s, e
ntre
pren
eurs
, spe
cial
ized
tal
ents
and
res
earc
hers
in t
he fi
elds
of
sci
ence
, kno
wle
dge
and
outs
tand
ing
stud
ents
. The
new
sys
tem
defi
nes
two
cate
gori
es fo
r in
vest
ors:
(1)
inve
stor
s in
a p
rope
rty
of a
val
ue o
f AE
D5
mill
ion
or m
ore
will
be
gran
ted
a re
side
nce
for
five
year
s; a
nd (
2) a
ren
ewab
le 1
0-ye
ar v
isa
will
be
prov
ided
to
fore
igne
rs w
ith in
vest
men
ts in
the
UA
E o
f at
leas
t A
ED
10 m
illio
n, a
s lo
ng a
s no
n-re
al e
stat
e as
sets
acc
ount
for
at le
ast
60%
pe
rcen
t of
the
tot
al. T
he a
mou
nt in
vest
ed s
hall
be w
holly
ow
ned
by t
he in
vest
or a
nd n
ot lo
aned
. Inv
esto
rs c
an b
ring
spo
uses
an
d ch
ildre
n in
to t
he c
ount
ry. O
ther
rul
es o
ffer
five
-yea
r vi
sas
to e
ntre
pren
eurs
and
10-
year
vis
as fo
r sc
ient
ists
and
res
earc
hers
w
ith t
op q
ualifi
catio
ns. O
utst
andi
ng s
tude
nts
can
stay
for
five
year
s. T
he n
ew v
isas
wer
e an
noun
ced
in N
ovem
ber
2018
with
im
plem
enta
tion
from
Jan
uary
201
9.M
ay-1
9A
nnou
nces
per
man
ent
resi
denc
y fr
amew
ork
(Gol
d C
ard
sche
me)
for
inve
stor
s an
d ex
cept
iona
lly s
kille
d pr
ofes
sion
als.
May
-19
Fess
for
1500
gov
ernm
ent
serv
ices
per
form
ed b
y th
e in
teri
or, e
cono
my
and
hum
an r
esou
rce
min
istr
ies
wer
e cu
t or
am
ende
d to
he
lp lo
wer
the
cos
t of
doi
ng b
usin
ess.
(ef
fect
ive
1 Ju
ly)
The
mov
e w
as a
imed
to
impr
ove
the
busi
ness
env
iron
men
t an
d bo
ost
grow
th.
Jun-
19B
road
enin
g of
the
10-
year
vis
a pr
ogra
m (
Gol
d C
ard
sche
me)
ann
ounc
ed fo
r sk
illed
pro
fess
iona
ls, f
rom
the
sta
ndar
d of
thr
ee
year
s. T
he c
rite
ria
for
elig
ibili
ty: (
1) m
onth
ly s
alar
y of
at
leas
t A
ED
30,0
00 (
USD
8174
); (
2) a
bac
helo
r’s
degr
ee; a
nd (
3) a
t le
ast
five
year
s of
wor
k ex
peri
ence
in t
he U
AE
.Ju
l-19
The
UA
E C
abin
et h
as a
nnou
nced
13
broa
d se
ctor
s el
igib
le fo
r up
to
100%
fore
ign
owne
rshi
p un
der
a la
w r
atifi
ed la
st
Nov
embe
r. T
he li
st in
clud
es 1
22 e
cono
mic
act
iviti
es a
cros
s 13
sec
tors
, inc
ludi
ng r
enew
able
ene
rgy,
spa
ce, a
gric
ultu
re,
man
ufac
turi
ng, t
rans
port
, log
istic
s, h
ospi
talit
y, fo
od s
ervi
ces,
info
rmat
ion
and
com
mun
icat
ions
, am
ongs
t ot
hers
. Pre
viou
sly,
fo
reig
n in
vest
ors
coul
d ho
ld u
p to
49%
of a
com
pany
reg
iste
red
in t
he U
AE
, unl
ess
it w
as in
a d
esig
nate
d fr
ee t
rade
zon
e, a
nd
wou
ld h
ave
to p
artn
er w
ith a
n E
mir
ati i
nves
tor
who
wou
ld h
old
the
rem
aini
ng 5
1%. E
ach
emir
ate
will
dec
ide
the
max
imum
fo
reig
n ow
ners
hip
allo
wed
with
in it
s ju
risd
ictio
n.Ju
l-19
The
Min
istr
y of
Hum
an R
esou
rces
and
Em
irat
isat
ion
(MO
HR
E)
redu
ced
fees
for
145
serv
ices
and
tra
nsac
tions
, inc
ludi
ng 5
0%
to 9
4% c
ut in
fees
for
17 s
ervi
ces.
Abu
Dha
biJu
n-18
Abu
Dha
bi h
as a
nnou
nced
an
AE
D 5
0 bi
llion
(U
SD 1
3.6
billi
on)
pack
age
to b
oost
eco
nom
ic g
row
th o
ver
the
next
thr
ee y
ears
. A
bu D
habi
’s E
xecu
tive
Cou
ncil
is t
aske
d w
ith p
repa
ring
det
aile
d ex
ecut
ion
plan
s ov
er t
he fo
llow
ing
90 d
ays.
Jun-
18A
bu D
habi
cut
s th
e to
urism
fee
appl
ied
to h
otel
roo
ms
and
outle
ts fr
om 6
% to
3.5
%, w
hilst
the
mun
icip
ality
fee
was
hal
ved
to 2
%.
(con
tinu
ed)
9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…
250
Sep-
18A
bu D
habi
Dep
artm
ent o
f Eco
nom
ic D
evel
opm
ent s
tart
ed r
ollin
g ou
t dua
l lic
ense
s al
low
ing
com
pani
es in
free
zon
es to
est
ablis
h an
ons
hore
bra
nch.
The
firs
t pha
se is
ope
n to
com
pani
es h
eadq
uart
ered
in A
bu D
habi
and
bas
ed in
one
of i
ts fr
ee z
ones
. The
se
cond
pha
se w
ill a
llow
mor
e co
mpa
nies
to q
ualif
y fo
r a
dual
lice
nse.
The
dua
l lic
ense
s ar
e on
e of
10
stra
tegi
c in
itiat
ives
link
ed to
a
thre
e-ye
ar A
ED
50 b
illio
n st
imul
us p
acka
ge fo
r th
e em
irate
. Phy
sical
loca
tions
will
no
long
er b
e re
quir
ed fo
r du
al li
cens
es,
ther
eby
redu
cing
the
cost
of a
dua
l lic
ense
by
c.80
% fr
om a
sta
ndar
d lic
ense
, acc
ordi
ng to
the
depa
rtm
ent.
Sep-
18G
reat
er d
etai
ls a
bout
Abu
Dha
bi’s
thr
ee-y
ear
AE
D50
bill
ion
pack
age,
cal
led
Gha
dan
2021
(T
omor
row
202
1), w
ere
appr
oved
. O
f thi
s pa
ckag
e, A
ED
20 b
illio
n w
ill b
e al
loca
ted
for
2019
, whi
lst
all u
ndis
pute
d pr
ivat
e se
ctor
due
s an
d re
ceiv
able
s w
ill b
e se
ttle
d be
fore
mid
-Nov
embe
r 20
18. I
n 1Q
2019
, thr
ee t
o fiv
e pr
ojec
ts w
ith a
val
ue o
f ove
r A
ED
3 bi
llion
will
be
anno
unce
d in
ar
eas
such
as
hous
ing,
roa
ds, i
nfra
stru
ctur
e an
d he
alth
care
. A c
redi
t gu
aran
tee
prog
ram
is e
xpec
ted
to b
e la
unch
ed la
ter
in 2
018
to fa
cilit
ate
Dh1
0bn
in fi
nanc
ing
for
SME
s fr
om lo
cal b
anks
ove
r th
e ne
xt t
hree
yea
rs a
nd a
PPP
law
is e
xpec
ted
soon
.D
ec-1
8Se
rvic
e fe
es fo
r th
e re
gist
ratio
n of
pro
pert
ies,
ren
tal c
ontr
acts
and
oth
er t
rans
actio
ns a
t th
e A
bu D
habi
Mun
icip
ality
hav
e be
en
redu
ced
by u
p to
50%
, acc
ordi
ng t
o a
new
gov
ernm
ent
reso
lutio
n. A
bu D
habi
has
als
o ex
empt
ed a
ll bu
sine
sses
issu
ed w
ith n
ew
licen
ses
from
loca
l fee
s fo
r tw
o ye
ars
as t
he C
apita
l loo
ks t
o at
trac
t in
vest
ors.
In
the
new
res
olut
ion,
75
mun
icip
ality
ser
vice
s fe
es
wer
e ca
ncel
led
and
23 m
unic
ipal
ity fe
es w
ere
redu
ced
by 1
0% t
o 50
%.
Jan-
19In
dust
rial
pro
duct
s an
d m
ater
ials
shi
pped
into
Abu
Dha
bi w
ill b
e ex
empt
from
cus
tom
s ta
x fr
om 1
5 Ja
nuar
y 20
19. T
he
exem
pted
impo
rts
incl
ude
item
s su
ch a
s ra
w m
ater
ials
, mac
hine
ry, e
quip
men
t an
d sp
are
part
s. T
he m
ove
form
s pa
rt o
f the
A
ED
50 b
illio
n st
imul
us p
rogr
am a
nnou
nced
in 2
018
and
aim
ed a
t bo
ostin
g th
e in
dust
rial
sec
tor.
The
new
wai
vers
will
app
ly
larg
ely
to g
oods
hea
ded
for
the
emir
ate’
s in
dust
rial
free
zon
es, s
uch
as t
he K
halif
a In
dust
rial
Zon
e an
d th
e K
halif
a Po
rt F
ree
Tra
de Z
one.
Mar
-19
App
rove
d a
seri
es o
f inc
entiv
e pa
ckag
es w
orth
AE
D1
billi
on (
USD
272
mill
ion)
to
supp
ort
agri
cultu
ral t
echn
olog
y pr
ojec
ts. T
he
ince
ntiv
es a
im t
o en
cour
age
the
com
pani
es t
o bu
ild a
nd g
row
a p
rese
nce
in A
bu D
habi
, est
ablis
hing
the
em
irat
e as
a g
loba
l ce
nter
for
dese
rt e
nvir
onm
ent
agri
cultu
re in
nova
tion.
Mar
-19
Abu
Dha
bi A
irpo
rts
Free
Zon
e (A
DA
FZ)
has
redu
ced
busi
ness
set
up c
osts
by
mor
e th
an 6
5%, w
ith t
he a
im o
f enh
anci
ng it
s re
gion
al c
ompe
titiv
enes
s an
d at
trac
ting
new
sou
rces
of F
orei
gn D
irec
t In
vest
men
t.A
pr-1
9A
ll fo
reig
ners
will
be
entit
led
to o
wn
the
free
hold
of l
and
and
prop
ertie
s pu
rcha
sed
in in
vest
men
t zo
nes.
Pre
viou
sly,
thi
s w
as
only
per
mitt
ed fo
r U
AE
and
GC
C n
atio
nals
, with
fore
ign
inve
stor
s ge
nera
lly li
mite
d to
leas
ehol
d ar
rang
emen
ts w
ith 9
9-ye
ar
leas
es.
May
-19
Stat
e-ru
n A
bu D
habi
Inv
estm
ent
Offi
ce la
unch
ed a
n A
ED
535
mill
ion
fund
(U
SD14
5.7
mill
ion)
to
supp
ort
vent
ure
capi
tal
activ
ities
and
sta
rt-u
ps. T
he ‘G
hada
n V
entu
res
Fund
’ is
to in
crea
se t
he a
vaila
bilit
y of
cap
ital t
o st
art-
ups
base
d in
Abu
Dha
bi a
nd
to a
ttra
ct fu
nd m
anag
ers.
Thi
s is
a p
art
of A
bu D
habi
’s A
ED
50 b
illio
n G
hada
n 21
pro
gram
.
Tab
le 9
.5
(con
tinue
d)
M. MALIK AND T. NAGESH
251
May
-19
Hou
sing
loan
s w
orth
AE
D3.
4 bi
llion
(U
SD0.
92 b
illio
n) t
o be
dis
trib
uted
to
natio
nals
in t
he e
mir
ate
as p
art
of t
he fi
rst
inst
allm
ent
of t
he 2
019
hous
ing
prog
ram
, as
wel
l as
gove
rnm
ent
hous
es a
nd r
esid
entia
l plo
ts.
Jun-
19A
bu D
habi
ann
ounc
ed fu
rthe
r de
tails
of m
easu
res
linke
d to
its
Gha
dan
2021
gro
wth
sup
port
pro
gram
, ini
tially
ann
ounc
ed in
20
18. T
he m
easu
res
anno
unce
d in
clud
ed: (
1) c
redi
t gu
aran
tees
for
SME
s; (
2) in
stan
t bu
sine
ss li
cens
es; (
3) v
aria
ble
elec
tric
ity
tari
ffs
for
the
indu
stri
al s
ecto
r; a
nd (
4) s
uppo
rt fo
r ec
otou
rism
in t
he e
mir
ate.
Dub
aiM
ar-1
8D
ubai
ann
ounc
es n
o in
crea
se in
gov
ernm
ent
fees
for
next
thr
ee y
ears
.A
pr-1
8D
ubai
unv
eils
a n
ew e
cono
mic
pla
n in
tend
ed t
o bo
ost
grow
th, a
ttra
ct n
ew in
vest
men
t an
d re
duce
the
cos
t of
doi
ng b
usin
ess.
N
ew e
cono
mic
pla
ns a
nd m
easu
res
to b
oost
gro
wth
dis
cuss
ed.
Jun-
18D
ubai
’s E
xecu
tive
Cou
ncil
appr
oved
a n
umbe
r of
mea
sure
s to
boo
st g
row
th a
nd a
ttra
ct in
vest
men
t, in
clud
ing:
•
Red
ucin
g m
unic
ipal
tax
es o
n bu
sine
sses
from
5%
to
2.5%
•
Wai
ving
19
fees
rel
ated
to
the
avia
tion
sect
or a
nd a
irpl
ane
land
ing
•
Wai
ving
4%
fine
s on
late
pro
pert
y re
gist
ratio
n fo
r 60
day
s an
d
• Fr
eezi
ng p
riva
te s
choo
l fee
s fo
r th
e co
min
g ac
adem
ic y
ear
(201
8–19
).Ju
n-18
Mun
icip
ality
fees
on
sale
s at
res
taur
ants
and
hot
els
low
ered
from
10%
to
7%.
Jun-
18D
ubai
’s D
epar
tmen
t of
Eco
nom
ic D
evel
opm
ent
(DE
D)
laun
ched
a p
acka
ge t
o m
ake
it m
uch
easi
er fo
r bu
sine
sses
to
clea
r fin
es
and
rene
w t
heir
lice
nses
. The
mea
sure
s w
ill a
llow
bus
ines
ses
to p
ay t
heir
fees
and
fine
s in
eas
y in
stal
lmen
ts, f
reez
e th
eir
trad
e lic
ense
for
a ye
ar a
nd s
eek
an a
mic
able
set
tlem
ent
with
DE
D o
n co
mm
erci
al v
iola
tions
.D
ec-1
8D
EW
A a
nnou
nced
tha
t it
will
wai
ve c
harg
es fo
r ne
w c
onne
ctio
ns o
f up
to 1
50 k
W fo
r co
mm
erci
al a
nd in
dust
rial
cus
tom
ers
for
the
next
tw
o ye
ars.
Jan-
19D
ubai
ann
ounc
ed t
hat
it w
ould
mai
ntai
n th
e fa
cilit
y of
a 5
0% r
educ
tion
in fi
nes
for
busi
ness
es in
201
9Ja
n-19
Dub
ai a
nnou
nced
tha
t co
mpa
nies
in t
he t
ouri
sm in
dust
ry w
ill s
oon
be a
ble
to g
et b
ack
the
bank
gua
rant
ees
they
had
ear
lier
set
asid
e w
hen
they
sta
rted
doi
ng t
heir
bus
ines
s in
the
em
irat
e, r
elea
sing
c.A
ED
250
mill
ion.
New
bus
ines
ses
will
no
long
er n
eed
to
prov
ide
a gu
aran
tee
befo
re s
ecur
ing
a tr
ade
licen
seM
ar-1
9D
ubai
Dep
artm
ent
of F
inan
ce la
unch
ed a
sec
ond
pack
age
of e
cono
mic
gro
wth
initi
ativ
es a
imed
at
boos
ting
econ
omic
act
ivity
, fo
llow
ing
the
earl
ier
pack
age
by D
ED
. The
pac
kage
incl
udes
initi
ativ
es t
o su
ppor
t SM
Es
and
publ
ic-p
riva
te p
artn
ersh
ip.
Mar
-19
Dub
ai H
ealth
care
City
Aut
hori
ty (
DH
CA
) an
noun
ced
revi
sed
fees
for
seve
ral o
f its
hea
lthca
re, c
omm
erci
al, a
nd r
esea
rch
and
educ
atio
n of
feri
ngs.
The
initi
ativ
e ai
ms
to r
educ
e th
e co
st o
f doi
ng b
usin
ess
and
enha
ncin
g ec
onom
ic g
row
th.
Sour
ce: V
ario
us m
edia
sou
rces
, AD
CB
est
imat
es
9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…
252
rEFErEncEs
ADCB Economic Research. 2017. GCC Economic Update – Assessing the eco-nomic impact of VAT. (Published on 14 June 2017, authors Monica Malik and Shailesh Jha).
ADCB Economic Research. 2018. Oman Economic Update – Previous invest-ment paying dividends and boosting export capacity. (Published on 3 September 2018, authors Monica Malik and Thirumalai Nagesh).
ADCB Economic Research. 2019. GCC Economic Update – Fragile non-oil growth recovery with limited pick-up in momentum. (Published on 13 February 2019, authors Monica Malik and Thirumalai Nagesh).
Bloomberg. 2018. Odd One Out? Kuwait Is Struggling to Pass VAT Agreed by Gulf (published 10 May 2018, authors Fiona MacDonald and Zainab Fattah).
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M. MALIK AND T. NAGESH
253
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9 FISCAL SUSTAINABILITY AND HYDROCARBON ENDOWMENT PER CAPITA…