Kobyakov supporting the strengthening of Belarus-UAE economic relations

Belarusian Prime Minister Andrei Kobyakov insists that Belarus and the UAE need to tighten their relations by increasing trading and economic collaboration between the two nations. The Prime Minister of Belarus believes that presently the two countries’ bilateral trading and economical activities do not match their political relationships. The amount of trade between the two countries should increase, in order to benefit both markets as well as third country markets which each collaborates with.

Belarus was officially included in the Eurasian Economic Union (EEU) at the beginning of the year. The EEU owns approximately one-sixth of the world’s land. Some of Belarus trading partners includes Armenia, Kazakhstan, Russia and Kyrgyzstan to name a few.

Belarus regards the UAE as a great partner within the Middle East region. Even though Belarus is aware of the UAE’s successful trading activities, it proposes that an increased cooperation between them will be beneficial to both. Belarus offers a large variety of goods that may be in demand throughout the UAE, such as medical, petrochemical, engineering as well as food products. Additionally, Belarus is willing to offer assistance on any business venture the UAE requires. Belarus is open to the prospect of UAE businesses setting up in the country.

The UAE was open to Belarus’ proposal to strengthen relations between the two countries. UAE and Belarus are alike in many ways. During the previous three years investment, economic and trade has increased between the two nations. The UAE is hopeful their ties will tighten both within the public as well as within the private sectors.

The UAE is Belarus’ leading trade partner between the Arab countries included in the Persian Gulf.  Belarusian exports to the UAE increased by 44% during 2013-2014, amounting to $59.3 million worth of trade. In total, Belarus gained $48.9 million in trade with the Arab country. UAE exports also marked an increase of 16.5% during the same years, amounting to $10.4 million.

During the previous year, the UAE invested approximately $95.1 million in Belarus, out of which $4.2 originated from direct foreign investments, leading to net revenue of $1.57 million. In total UAE participates in 15 Belarusian organizations.

Dubai forecasts air passengers will reach 126 million by 2020

Dubai’s aviation sector has soared to the sky during the last year, and will continue to do so according to airport reports. It is expected that the number of passengers will increase to 126 million until 2020.

Dubai International and Al Maktoum International airports have been forced to expand due to growing number of travelers visiting or passing through the emirate.

Based on a recent report, Dubai’s airports are expected to cater to 126 and 200 million passengers by 2020 and 2013 respectively.

At present, Dubai International has been ranked the number one international airport. It has also been ranked the sixth busiest airport in the world. On the other hand, Dubai’s Al Maktoum International Airport, which is located in Dubai World Central (DWC), catered to almost 850,000 passengers during its first year of operation last year.  Currently it is able to cater to 5-7 million passengers.

After the expansion plans will have been completed, DWC’s airport will be able to cater to 220 million passengers. The expansion plans will be completed into two phases. It is hoped that over the next 6-8 years, the first phase of the expansion will be completed. It is projected that the expansion will cost over 30 billion dollars and the airport will have the capacity to cater to 120 million passengers.

Dubai’s vision to develop into an international hub is well on its way. The emirate is considering ways in order to cater to the demand its on-going growth has generated. As Dubai’s officials confirm, Dubai does not simply plan but it executes what it plans.

Dubai’s Al Maktoum International lies on 140 square kilometer plot on the southern part of the city. By the end of the expansion project, Al Maktoum International will be tenfold in size compared to Dubai International, establishing it as the largest international airport in the world.

During the previous year, Dubai International accommodated just over 70 million passengers, marking an increase of 6.1% compared to 2013 statistics. It is projected that the airport will cater to nearly 80 million travelers during 2015, having the capacity to accommodate 100 million passengers after 7.8 billion dollars were invested for its expansion.

During 2013, the aviation sector attributed to 27% of Dubai’s GDP, a sum amounting to approximately 26.7 billion dollars. Around 416,500 people are engaged in the aviation sector, which stands for 27% of Dubai’s labor force.

It is expected that by 2030 the aviation sector will contribute just under 90 billion dollars to the emirate’s economy, a figure that is threefold the amount the sector contributed to the economy in 2013. One out of three employees will be engaged in Dubai’s aviation sector.

Statistics reveal that as many as 192 thousand passengers pass through Dubai International on a daily basis. The airport caters to 980 flights every day.

Concourse A was completed nearly two years ago, which enhanced the airport’s capacity to 75 million passengers. Nonetheless, the airport needs to expand again as due to increased amount of passengers; its capacity is approaching its limits.

Dubai plans to complete the next expansion plan during this year, by opening Concourse D.

Dubai’s vision has been in place for many decades, which is in the process of developing an aviation enterprise, home to the largest international airports, which host international leading airlines and cater to millions of passengers. 

Taxing: Will the UAE be influenced?

Tax planning is well on its way as many international conversation and negotiations are taking place. Topics such as tax planning and avoidance and well as tax evasion have been the focus of conversation amongst governmental parties throughout the globe. Many developed economies have highlighted the necessity to establish corporate transparency as well as balancing financial reforms and the need to enhance economic growth.

It is a known fact that multiple international corporations are subject to minimal amounts of tax when compared to the profits they generate, since they move their revenues around low-tax jurisdictions, which are known as tax havens. More and more international enterprises are moving their profits, while establishing their intellectual property as well as launching and running Intermediate Holding Companies, known as IHC, in tax haven jurisdictions that offer low tax rates or even 0%. Through this, international companies take advantage of the thin line difference between tax planning and evasion. 

IHC Tax Planning

 In a few words, tax planning refers as an arrangement of affairs, agreed upon by an individual so as to fully benefit and profit from the implemented tax regime according to the law. Therefore, enterprises benefit from low tax rates without breaking the law. In accordance to the majority of western developed countries, argue that tax planning is legal under the condition the arrangement of affairs made comply with the legislation of the jurisdiction and no grey-area tax techniques are in place.

International corporations that have set up IHC have proven to run successfully through time. Complicated and efficient corporate, tax, managing, regulatory evaluations as well as careful planning, appraisal of the law, political stability level and investment environment of the country the enterprise plans to set an IHC must be taken into consideration before taking the step.

Investment Hub-the UAE

Even though many international enterprises seek to set up IHCs in low-tax jurisdictions, this is not the only feature that is taken into consideration. Enterprises are required to evaluate and analyze other important factors as well such as the jurisdiction’s political stability, whether the jurisdiction is investor friendly, the operational, managerial and business requirements practiced and repatriation measures as well as tax regime.

 

Although the UAE is not defined as a classical tax haven hub per say, the majority of international enterprises, which wish to expand into other jurisdictions such as Africa and Asia, seek to set up IHCs in the country. The reasons for their preference are outlined below.

1. The UAE’s Strategic Location

The UAE is an ideal jurisdiction for those seeking to conduct business activities and expand in neighboring UAE countries such as Africa, Asia as well as throughout the Middle East world. In terms of infrastructure, the UAE provides both residential and industrial property, which is considered an additional advantage for international enterprises interested in setting up an IHC.

2. The UAE’s Political Stability

Being amongst the 10 major oil-producing countries throughout the globe, the UAE’s diverse and developed economy alongside to its political stability establishes the country as the ideal jurisdiction to set up an IHC in a prosperous commercial centered setting ideal for those seeking to conduct business activities.

3. The UAE’s Investor Friendly Setting

The UAE offers full foreign ownership to businesspeople and corporations seeking to set up businesses in the UAE due to the many free zones found throughout the nation. In addition, the UAE does not impose any restrictions concerning the nationality of shareholders and directors within its free zone.

Furthermore, business entities established in the free zones of the UAE have the option of registering the company as new companies as well as representative offices or branches of both international as well as local companies. Moreover, the mandatory share capital imposed on companies seeking to establish a business in the free zone is not standard, as the amount differs depending on the nature of business intended to be conducted, the free zone which has been chosen as well as the number of shareholders.

Finally, the UAE is also a partner of the International Centre of Settlement of Investment Disputes Convention (ICSID) and has made multiple bilateral investment agreements with many other countries in an attempt to protect foreign investors in a variety of ways. Such protective measures include ensuring investors are treated fairly, are not subjected to irrational and biased measures.

4. The UAE and Repatriation of Profits

The UAE does not impose exchange regulations on corporations and businesses within the country. Therefore UAE investors can easily and legally save the generated revenues and profits in their UAE companies and utilise them to fund and finance their other business activities throughout the world without restrictions.

5. No Tax

The only companies subject to tax in the UAE are those engaged in oil, petrochemical and gas activities as well as foreign banks. Any other corporation or business is not subject to taxation in the UAE.

In addition, the UAE has created an extensiveDouble Taxation Avoidance Agreement Network. Therefore, UAE investors are handled favorably regarding tax credits, withholding tax as well as double taxation.

With focus being drawn to offshore companies’ tax residency across the globe, establishing IHCs has become complicated. In such an environment, free zone companies established in the UAE with local regulatory authorities offer effective solutions as they draw less attention to themselves from tax authorities. 

Recent Tax Developments

Nowadays, the only feature that remains stable is the fact developments are constantly altering and changing. Many modern and developed countries throughout the world have been led to adopt and implement Beneficial Ownership within their tax legislation in an attempt to restrain the use of IHC. Two examples of such countries are China and France. France has implemented the term Beneficial Owner in two segments of their tax law linked to EC directives and anti-abuse principles. China has implemented administrative circulars as well as requiring the beneficial owner not to act as an agent but rather maintain operative activities. Several other countries, such as China, Indonesia and Canada, are in the process of evaluating IHC structures to conclude on the income of beneficial ownership.

The most important factor corporations look for when seeking to set up an IHC in s foreign jurisdiction is safety and protection in legal terms. The point is to make sure the IHC is not only set up as an agent or pass-through unit. The UAE demands the beneficial owner’s full disclosure at the time the IHC is set up and any point a new foreign shareholder is introduced to the company from there on.

Additionally, the majority claim that the UAE is an established tax haven, which in actuality is false. Even though the UAE does not impose tax on corporations within the country, this does not prevent the source jurisdiction from imposing tax on the potential UAE investor when exiting. Thus, corporations seeking to set up IHBs in the UAE are not only driven by the 0% tax but usually their decision coincides with the fact the UAE is an established business hub and a means to expand further in other emerging economies like Asia and Africa.

The UAE has a long and prosperous success as a global trade hub as well as a business and financial centre, which does not rely on any other country. Moreover, the UAE has not been included on the Organization of Economic Co-operation and Development list, which is a clear benefit. Finally, the UAE has openly welcomed the alterations made on the revised Implementing Regulations for Federal Law No. (4) 2002, which outlines anti-laundry regulations and measures, by positioning eight tax officers within Abu Dhabi. This move reveals that the UAE does not consider itself as a tax haven jurisdiction but rather as a financial, commercial and business centre whereby its intentions are to attract foreign investments.

Final Comments

In 2013, the Global Foreign Direct Investment Confidence Index positioned the UAE in 14^th place. This is mainly attributed to the fact that the UAE offers easy access to emerging economies throughout Asia, African and Middle Eastern countries and its investor-friendly environment.  The UAE is viewed as one of the top jurisdictions to set up an IHC even though other countries and tax authorities seek to restrain IHCs. 

Steady and transparent tax policies, effective tax legislations lead to investment

Government officials are required to resolve structural issues the Egyptian economy is facing as the Economic Summit is around the corner. In order for the Egyptian economy to modify and develop its structure, the government is called to enhance investment and stabilize tax policies.

According to the present tax structure, tax rates have soared beyond 40% due to a 5% increase in rate from 20% to 25%. Besides the increase in rate, companies and individuals are subject to an additional 5% surtax on those holding more than EGP 1m. Furthermore, the government has implemented a new 10% tax on dividends. Financial and investor professionals express their concern, believing that the present tax regime in Egypt does not attract investors therefore hindering the country’s investment sector. 

 Assessment of current Egyptian Tax Regime

An effective and efficient tax regime is made up of four parties including the tax policy, tax administration, the tax legislation as well as the taxpayer. Firstly, to improve the Egyptian tax regime, the government must create a comprehensive, long-term steady tax policy that will allow potential investors to make their investment choices founded on transparency and sureness.

It is also suggested that the Egyptian government prepares a five-year tax and financial policy in order to present at the Economic Summit. The government needs to make sure the five-year tax and financial policy will not alter depending on government officials or cabinet. It is crucial that the policy is and will remain stable and developed based on cost benefit analysis to successfully be integrated in to the economy.

Secondly, the government should rethink its tax legislation. A new modified income tax law needs to be issued, which rate and regulations are consistent with that of other countries internationally. The new income tax legislation needs to be outlined clearly and in detail. Additionally, Egypt needs to reevaluate its high tax rates in order to become more competitive and ultimately attract more investors. This is because other countries tax rates are generally lower.

International tax systems

All tax regimes are implemented to enhance three factors within an economy: economic, social and fiscal policies. The fiscal or financial policy aims to generate tax revenues. The economic policy aims to enhance and attract investment whereas the social policy targets to achieve justice and just income distribution in the society.

In regards to Egypt, at present the government is focusing on the fiscal aspect of its tax regime in order to resolve its government budget deficit quickly, although it should focus on revising its high rates and policies.

Companies and Individuals whose income surpasses EGP 1m are subject to an additional 5% tax

In the occasion where all investors were informed that the additional 5% tax would no longer be imposed after a three year period, as prescribed by law. However, after three years have gone by, the tax is still imposed. Therefore, investors realize that the government’s intention was to increase the rate of tax in an indirectly.

Value-added Tax Law

Egypt needs to introduce a new VAT legislation in order to increase its tax revenues. Experts hold the view that the Egyptian government needs to quickly introduce a new VAT law while allowing time to taxpayers to adjust and adapt to the new tax regime. If a transition period were not allowed, the new VAT legislation would not be implemented effectively. For instance, the introduction of a new VAT means that companies and businesses will need time to amend and alter their invoice systems and accounts.

Investors and Law modifications

Taking in to consideration the present financial environment in Egypt, investors feel the Egyptian economy is unstable because of the repetitive modifications made to the legislation. The legislation needs to be consistent and steady. For instance, the law articles concerning tax exemptions and reevaluation profit are not consistent.

At present, the legislation does not benefit Egypt companies concerning taxes. Additionally, a holding company is subject to double taxation when it holds less than 25% of capital and voting rights. This fact discourages potential investors from investing in the Egyptian market, taking their investments elsewhere.

Modified Tax Legislation

Experts believe new tax legislation needs to be implemented in Egypt, by revising two segments of the already established law. They believe the new law should unify law procedures as well as all the procedures involved in sales and income, to reduce the present procedures and evade tax mistakes from being made.   

Government’s Financial Measures

Egypt has been struggling with political and economic difficulties since the Revolution on 25 January. Consequently, the country’s economic volatility, low foreign investment inflow and less tourism has negatively influenced its financial state. Egypt has showed some progress since last June, in terms of its political and economic instability, which is mainly attributed to the new president who came in to office over the summer as well as the $12bn Arab aid it received.  Nonetheless, Egypt remains an instable market due to the terrorist attacks, which influence the economy by discouraging potential investments.

On a positive note, the economy seems to be heading on the right track after several positive changes. The government firstly made alterations within the energy industry and decreased the energy subsidy. EGP 100bn in total was used to subsidize oil products during the 2014-2015 financial years, which is EGP 30bn lower than 2013-2014. It is also anticipated that during 2015 the economy will benefit significantly from several projects, which will be undertaken such as the construction of more than 3000 kilometers of road networks, the Suez Canal axis as well as the land reclamation project.

Economic Growth

During 2015, the economy may strengthen marking a 4% growth rate under the condition the government continues to make economic, financial and tax alterations. Experts are hopeful the country’s GDP will rise to 5% during the current financial year. In order for an economy to prosper it must maintain its growth rate. The previous year’s GDP was marked at 2.2% I contrast to 2012-2013 GDP, which stood at 2.1%. Growth rates were marked at 6.8% and 5.7% during the first and second financial quarters in 2014-2015 respectively, which is a good indicator of growth.

Although Egypt has marked an increase in its GDP, it must make certain that it is equally distributed among all classes of society. In the past, its GDP reached 7% but sue to imbalance of distribution only a tiny section of society benefited.

International trends in growth rates

The question in hand is whether economic growth rates may be attained without taking into account the equal distribution of this growth. In occasions where increased economic growth rates were not distributed equally, only a tiny section of society benefited from the increased economic growth.

When an economy grows, unemployment rates decline therefore inflation also drops investment inflows surge up and obviously, the government’s budget deficits decrease. At present, the Egyptian government aims to decrease its state budget deficit. It hopes that within the following three years the budget deficit will drop to 8% of the country’s GDP.

Government Administrative Reforms

At present more than six million workers are engaged in the public sector of which the majority is temporarily employed. In time, all these employees will be kept on permanently, which is one of the administrative reforms the government intends to implement.  Secondly, altering and modifying the present wage system is also a matter the government needs to address to get rid of corruption, injustice and discrepancies within the public sector.

Furthermore, the administrative alterations made by the government will lead to less inflation regarding the managing and income costs. The government spends more than one fourth of its government spending. Although public employment has increased, quality services are not offered. Experts believe that the public sector may offer better quality of services with less number of employees. 

In addition, the Egyptian government also needs to consider creating a resourceful and proficient system for its employees. For instance, the state may set up early retirement funds, offering employees the opportunity to leave work earlier than intended and be compensated. The government may also promote the private sector so as more job opportunities open for workers and decrease the number of employees in the public sector.

Single-Window System

The government discussed a single-window system approach extensively and introduced the system successfully. The purpose of the system is to make the work of investors’ much easier by reduce both bureaucratic and administrative procedures. The system practiced at present is quite successful and advanced, similar to the system used in Dubai. Therefore, the process of setting up a company will no longer time consuming since everything will be done electronically but also the nearly 80 regulatory units an investor had to go through will no longer exist.

The new system will benefit the government largely since it is anticipated foreign investments will double. During the first quarter of the fiscal year, Egypt’s foreign investments reached $1.8bn, while during the second quarter investments marked an increase climbing to $2bn. Increased direct foreign investments indicate the economy is steadily recovering and on the right path. Furthermore, the introduction of the single-window system will enhance the country’s rankings within business indicator surveys, thus attracting even more businesses and investments.

Single-Window System vs. Corruption

By setting up a single-window system, both bribery and corruption will decrease significantly. Some consider that ineffectiveness and incompetence as a type of corruption which will also fade away. The single-window system carries many advantages, and the greatest of this is that human workers will be replaced by efficient machinery-thus; corruption, bribes, fraud and incompetence will all diminish.

Government Facilitates Procedures

One of the disadvantages of the Egyptian legislation is that procedures outlining both financial and commercial activities are not under one specific law, which does not help when enforcing the laws by creating uncertainty and confusion. The government should therefore unify all the laws relating to investment and add to that more incentives in order to attract more investors.

For or Against Exemptions

Experts do not agree on granting exemptions concerning tax to enhance investments. Additionally, exemptions create distortion within a tax regime. Furthermore, investors do not regard exemptions as an important reason to invest. Investors tend to seek legislative, tax regime, security and economic stability as the most important reasons to invest. 

Increased Demand, Launching New Products-Increase UAE Business Confidence and Activity

The United Arab Emirate (UAE) non-oil economy compensates for plunging oil prices. The nation’s Purchasing Manager Index (PMI) revealed that despite the drop in oil prices, its non-oil sector continues to grow and strengthen. The PMI is an amalgamated pointer of UAE’s non-oil sector based on information and statistics taken from about 400 private-owned companies throughout the UAE. 

The UAE’s PMI reached 59.1 in January, indicating an increase of 0.7. The index was also the highest it has reached over the last three months.

The fact the UAE’s non-oil based sector showed a boost in activity from the beginning of 2015 is incredibly positive. However, the UAE expects that the PMI will fall within the year due to decreasing oil prices and less demand in exports, especially from markets within the Gulf area.

Nonetheless, the PMI in January marked a boost in UAE’s non-oil private-owned sector concerning production. The boost was attributed to higher demand, new products that were brought into the market and increase in new work. Consequently, income numbers marked an increase while the rate of growth increased slightly in comparison to the previous month. Furthermore, the price of input materials and purchasing price rose steadily.

The increase in the rate of output also contributed to the strengthening of UAE’s private non-oil sector. Just under 40% of panelists revealed a production growth in contrast to the previous month. New orders increased during January, which has steadily been increasing since August 2009.

UAE’s non-oil based sector has grown stronger due to increasing new orders from international as well as domestic markets. The excess of work added pressure concerning the UAE’s ability to meet rising demand. Demand has been increasing for the last nine months.

In order to meet continuous growth of demand, companies sought to employ more workers over January, resembling the same trend, which was noticed in the beginning of 2012. Higher production and launching of new products, led companies to hire new employees, therefore increasing the employment rate.

The PMI carried out in January 2015 reveals the UAE’s private non-oil sector strength. The sector still grows although oil prices are plunging. The UAE is confident that the private non-oil sector will remain strong throughout 2015, contributing a 4.3% growth in GDP and more precisely a 4.7% growth in GDP in Dubai.

In an effort to maintain production growth, non-oil private companies increased their purchasing activity during January 2015.  Concerning expenses and prices, input and purchasing prices still marked a steady increase. The increase in prices overall is thought to be due to higher demand-which led to the prices of raw materials to rise. Furthermore, income and salaries also rose slightly. 

The UAE confirms that Gulf States are contemplating on value-added tax (VAT)

The Gulf region is currently conversing on implementing VAT on regions, which are rich in oil. According to sources, a meeting will be held in order to further discuss the matter later on during this month.

The six states part of the Gulf Cooperation Council (GCC) has been considering implementing VAT ever since 2007 in order to increase profits. All discussions and negotiations concerning the implementation of VAT have been conducted in the presence of all six Gulf States in order to prevent one state from excluded from competition.

Due to the plunging of oil prices, the Gulf nations are considering the introduction of VAT now more than ever before. This is because it is anticipated the six Gulf States will mark a budget deficit during the 2015 financial year and are not willing to cut off state spending on neither infrastructure nor social expenditure, which aim to enhance their economic status and as such improve the lives and lifestyle of the people.

Although the GCC has held several meetings, nothing has been decided yet. The GCC has arranged another meeting during February in order to further discuss the matter. The GCC is contemplating on introducing VAT on specific services and goods. No decision has been officially made, as some states do not want VAT to be imposed on food products whereas others do not agree on imposing VAT on healthcare.

The six countries part of the GCC includes the UAE, Qatar, Kuwait, Saudi Arabia, Oman and Bahrain. The GCC has suggested setting the VAT rate between 3%-5%, although it has not been made official.

IMF has long supported the idea of GCC implementing a levy in order to make sure governments will receive profits no matter the instability of oil prices. Furthermore, the UAE will possibly introduce a corporate tax, but again nothing has been made concrete. 

Non-oil sector on track in UAE

According to a new survey conducted in the UAE, its private non-oil sector is continuing to experience growth, in spite of plunging oil prices. However, it is anticipated business activity may drop or slow down during 2015.

According to January’s Purchasing Managers Index (PMI), international boost of orders attributed to increase in production output and employment rate. The PMI reached 59.3 in January, marking an increase of 0.7 from December’s PMI. The PMI calculates production output, spare capacity, prices and orders in order to represent the UAE’s non-oil based growth. The growth of the UAE’s non-oil sector is mainly attributed to the launching of new products, steady market and increase in sales.

The cost of production rose more sharply than the cost of finished products, since the increase in expenses (income and expenses of raw materials) hit the private non-oil based companies.

Increase in production and input expenses has not yet led to major increases in the cost of finished goods. On the contrary, decreasing commodity costs will possibly decrease inflationary issues and pressures. The UAE’s inflation rate is almost as high as it was in 2009 due to increasing housing and utility expenses.

During the previous month the IMF amended its forecasts concerning UAE’s economic growth reducing anticipated 2015 economic growth from 4.5% to 3.5%. The IMF expects that plunging oil prices will reduce UAE’s exports and consumers’ confidence.

However, Abu Dhabi’s non-oil based sector is anticipated to increase 5.5% during 2015. The percentage rate growth is significantly higher than its oil based sector, whereby the IMF anticipates will increase by 0.5%.

The significant decrease of oil price from US$110 per barrel during the last months of 2014 to $50 per barrel will inevitably influence oil dependent countries throughout the GCC.

UAE’s government spending and 2015 Budget is anticipated will remain steady due to its large government foreign asset and currency reserve wealth funds. The UAE’s reserves amount to approximately 400% GDP, in comparison to its expected 2015 financial deficit of 3.7% GDP.

Plunging oil prices will possibly influence the demand for imports from the UAE’s trade partners, which inevitably will negatively influence the country’s growth rate.

Nonetheless, the fact that business activity boosted in the beginning of 2015 is promising, although it is anticipated business activity will slow down as the year unfolds due to decreased oil prices and lower demand from significant export markets throughout the Gulf.

Generally, the UAE’s decreased growth concerning its oil-based sector will be counterbalanced by Dubai’s significant growth in non-oil based sectors. In spite of this, inflows to the emirate will be significantly influenced due to plunging oil prices. During 2015, business activity is anticipated will slow down but no alterations in consumption behavior is projected.

According to Saudi Arabia’s PMI, its figure remained constant at 57.8, revealing economic growth due to increased orders. Egypt’s January PMI dropped to 49.3, revealing output slowed down. This is the fifth time Egypt’s PMI figure dropped lower than 50 since Hosni Mubarak was removed in 2011.