Dubai’s government is freezing all hiring and cutting administrative spending by at least 20 percent across departments as the coronavirus pandemic squeezes state revenue.
The emirate’s Department of Finance on Wednesday also ordered a 50 percent reduction in capital spending and a delay to new government construction projects, according to a letter sent to all state departments by Director General Abdulrahman Al Saleh and seen by Bloomberg.
A representative for the Department of Finance couldn’t immediately comment.
Dubai, the Middle East transport and business hub, is seeking to shore up its finances by cutting spending and raising funds. The deadly coronavirus has shut down much of the economy, heavily dependent on tourism, trade and retail, while lower oil prices are hurting federal coffers.
Dubai Weighs Bond and Emirates Mulls Loans as Virus Hits Economy
The Department of Finance’s measures include:
• Freezing all hiring and stopping all promotions.
• Suspending payments for travel, car and mobile phone allowances to employees.
• Halting all spending earmarked for conferences, training and other events
• Reviewing all existing contracts.
• Cutting capital spending by a minimum 50 percent.
• Reducing spending on ongoing construction projects by ensuring no cost overruns and conducting value engineering for all projects as well as delaying new projects.
The government is in talks with banks to raise funding, while Emirates, its flag carrier, is mulling billions of dollars of loans. Dubai, one of the seven sheikhdoms that make up the United Arab Emirates, raised 1 billion dirhams ($272 million) from the private placement of Islamic bonds. It’s also discussing other financing options, according to people with knowledge of the matter.
Abu Dhabi and Qatar raised a combined $17 billion in bond sales this week.
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