The Effect of Direct and Freezone Company Structures on Trade in the UAE during the Covid Pandemic
Abstract
The trade settings and wide-ranging shocks are key in the evaluation of economic resilience and long-term policy. This paper discusses the impact of COVID-19 on imports, exports and jobs in both direct (onshore) and free-zone company arrangements in the UAE. The purpose is to identify the response of these different trade environments to an unprecedented global shock and to see what structural weaknesses arose during and after the crisis. Interrupted Time Series Analysis had been used to analyze the data from 2011 to 2023 annually, understanding the way trade patterns have changed before and after the onset of the COVID-19 pandemic. The results show the main economic indicators of the UAE in trade and exports which are total imports, direct imports, free zone imports, UAE non-oil exports, and UAE GDP. It was observed that there was an increased trend in total imports shortly after the pandemic began. This evidence indicated that economic policy after the pandemic needs to focus on stabilization of import levels and building long-term resilience of trade, rather than stimulating trade in the shorter term. These results highlight the importance of implementing strategic changes that will focus on economic diversification, strategic planning, and empowerment of the non-oil sector. The insights obtained can be of great value to policy makers, investors, and logistics practitioners who are determined to make the UAE economy more resilient.
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