United Arab Emirates Fiscal Policy Facing Global Economic Crisis during the Covid-19 Pandemic

Abstract

This research aims to analyze the fiscal policy implemented by the United Arab Emirates (UAE) in facing of the global economic crisis throughout 2020. Global macroeconomic indicators that indicate an economic crisis are, the negative movement of world GDP growth which was recorded at minus 3.3%, and the volatility of world commodity prices such as oil and natural gas which was recorded at the lowest position in April 2020. The negative global growth brought negative conditions for the UAE's domestic economy reflected in the UAE real GDP was recorded negative 6.1% and inflation recorded negative 2%. There are four areas of fiscal policy including mechanism zakat system that are considered effective in dealing with global economic crisis. First, strengthening domestic diversification other than oil and natural gas commodities. Second, optimizing the distribution of state spending to the public sector, especially allocated for recovery funds for the Covid-19 pandemic. Third, realizing the transformation of a cashless society and Fourth, developing blockchain technology and artificial intelligence in government financial services. The implementation of this policy proves that the UAE is targeting recovery in various sectors, primarily ensuring the health and safety of UAE citizens during the Covid-19 pandemic, as characteristics in implementation of Islamic public policy.