The G20 action plan to rebuild the global economy in the aftermath of the Covid-19 pandemic will result in a funding boon for micro, small and medium-sized enterprises.
MSMEs are crucial for labour market growth – generating nearly 90 per cent of businesses and more than 50 per cent of all employment on a global scale – and remain at the heart of the G20 strategy for sustainable economic growth.
With a people-centric approach, the G20 Presidency under Saudi Arabia is committed to protecting lives and boost livelihood by supporting MSMEs, innovators that foster economic diversification and providing opportunities for women and youth to boost growth.
G20 High-Level Policy Guidelines on Digital Financial Inclusion for youth, women and SMEs framework also helps steer authorities to form the right policies to support financial inclusion, and to share the benefits of innovation and digitalisation.
Policy Guidelines on Boosting MSMEs’ International Competitiveness, endorsed by G20 Trade and Investment Ministers, aim to improve the capacity, efficiency and competitiveness of MSMEs, enabling them contribute to the global economic growth.
The Saudi Arabian Presidency aims to support MSMEs worldwide through collective actions of the G20, the group of the world's 20-largest economies, that have so far pumped in more than $11trillion into the global economy to help smaller business, protect jobs and boost financial stability. The unprecedented fiscal and monetary actions by the G20 have helped put a floor under the global financial markets.
The Covid-19 pandemic has tipped the world economy into its worst recession since the 1930. The International Monetary Fund expects the global output to shrink 4.4 per cent this year with only a moderate recovery next year.
The pandemic is still raging in parts of Asia, Europe, the Middle East and the Americas. However the G20 is committed to mitigate the impact of Covid-19, using all available policy tools to restore global growth, maintain market stability, and strengthen resilience for better global competitiveness and preparedness for all.
The G20 countries are currently employing fiscal tools and guarantee schemes to counteract the social, economic and financial impacts of the pandemic to help MSMEs navigate through the crisis.
MSMEs in Saudi Arabia, the biggest Arab economy and the world's top oil exporting nation, have benefitted from the 79 billion Saudi riyals ($21.07bn) deferred payments programme.
Saudi Arabian Monetary Authority (Sama) has already introduced additional measures to further soften the impact of the pandemic and to support business continuity during the current crisis. Banks and finance companies have extended more than 3,000 loans to MSMEs worth 2.5bn riyals through the lending programme.
The kingdom also aims increase access to funding for smaller businesses under the Vision 2030 and to encourage financial institutions to allocate up to 20 per cent of overall funding to SMEs by 2030.
While policy tools and funding are available in the larger economies to support smaller businesses, the risks are greater for MSMEs as they are disproportionately affected by the lack of resources, digitalisation, information and skills.
According to the World Bank, the Middle East and North Africa region has the largest global finance gap for SMEs as a percentage of total financing demand in the region, estimated at 84 per cent.
The G20 Extraordinary Leaders’ Summit in March laid strong emphasis in safeguarding the global economy by supporting MSMEs. The leaders’ mandate has resonated with all relevant tracks including the G20 trade and investment, digital economy, labour and employment, agriculture and finance ministers and central banks governors – all showing unanimous support for MSMEs.
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
How the UAE gratuity payment is calculated now
Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.
The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.
1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):
a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33
b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.
2. For those who have worked more than five years
c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.
Note: The maximum figure cannot exceed two years total salary figure.
Killing of Qassem Suleimani
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UAE currency: the story behind the money in your pockets
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
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