Dubai launches Mideast’s first government-backed blockchain platform

Gitex Technology Week in Dubai. Dubai — a blockchain pioneer — aims to have the world’s first fully digitized government by 2021. (Shutterstock)
Updated 31 October 2018

Dubai launches Mideast’s first government-backed blockchain platform

  • IBM will deliver the new service aimed at speeding up transaction processing times

LONDON: Dubai has partnered with technology giant IBM to launch the first government-backed blockchain platform in the Middle East, with the aim of digitizing the provision of day-to-day services for the emirate’s residents and businesses. 

The platform is part of the government’s Smart Dubai initiative  to use technology to improve happiness and ensure government services are paperless by 2021. 

Blockchain technology promises to speed up transaction processing times, for example making it quicker and easier to pay water bills or apply for business licenses. 

The IBM-powered system will process transactions through the IBM Cloud environment, enabling organizations to keep their data in-country and lower costs by conducting transactions locally. 

“Dubai has been a pioneer in blockchain technology since its inception, while other major cities around the world were reluctant to embrace it for city-wide implementation,” said Aisha Bin Bishr, director-general of the Smart Dubai Office.

“The Dubai Blockchain Strategy set a clear path for the emirate to have the world’s first fully digitized government by 2021,” she said.

In the last few years Dubai has launched various proof-of-concept and pilot blockchain initiatives across different government agencies including roads and transport, energy, health and education, said Amr Refaat, general manager at IBM Middle East and Pakistan. 

“Through the new service, these organizations will have the ability to transition their blockchain developments into full-scale production,” he said. 

The first project to be launched on the new platform will be the “Dubai Pay Blockchain Settlement and Reconciliation System.” 

This allows government entities to conduct transactions with other official bodies, banks or financial institutions in real-time rather than the 45 or so days it used to take to process payments. Previously department of finance staff had to go through payments collected via various portals to manually reconcile and settle them.

The Dubai Electricity and Water Authority (DEWA) and the Knowledge and Human Development Authority were the first government agencies to trial this system. 

IBM has also recently worked with Dubai’s Department of Economic Development (DED) to launch its unified corporate registry using IBM Blockchain, said Refaat. 

“The aim of the registry is to digitize the process of issuing business licenses and exchanging commerce information for business owners, investors, entrepreneurs and startups, enabling them to conduct transactions digitally in real-time and in a trusted and secure environment,” he said. 

“We have also worked with Dubai Airport Freezone Authority (DAFZA) to transform and automate the freezone commercial licensing and renewal process. 

“Through IBM Blockchain, they can manage digital blockchain transactions and accurately and quickly verify documents, enabling businesses to establish operations in the UAE in a time efficient manner,” he said. 

Adopting blockchain technology could save Dubai 5.5 billion dirhams ($1.17 billion) a year in document processing costs alone, according to Smart Dubai’s website. 

The emirate is aiming to become the “global benchmark” for the city-wide implementation of blockchain services, the government body said. 

Record budget spurs Saudi economy

The budget sets out to lift spending and cut the deficit. (Shutterstock)
Updated 19 December 2018

Record budget spurs Saudi economy

  • “It is a growth-supportive budget with both capital and current expenditure set to rise.”
  • Government spending is projected to rise to SR 1.106 trillion

RIYADH: Saudi Arabia on Tuesday announced its biggest-ever budget — with spending set to increase by around 7 percent — in a move aimed at boosting the economy, while also reducing the deficit. 

However, analysts cautioned that the 2019 budget is based on oil prices far higher than today — which could prove an obstacle in hitting targets. 

Government spending is projected to rise to SR 1.106 trillion ($295 billion) next year, up from an actual SR 1.030 trillion this year, Minister of Finance Mohammed Al-Jadaan said at a briefing in Riyadh. 

The budget estimates a 9 percent annual increase in revenues to SR 975 billion. The budget deficit is forecast at SR 131 billion for next year, a 4.2 percent decline on 2018.

“We believe that the 2019 fiscal budget will focus on supporting economic activity — investment and wider,” Monica Malik, chief economist at Abu Dhabi Commercial Bank (ADCB), told Arab News.

“It is a growth-supportive budget with both capital and current expenditure set to rise.”

A royal decree by Saudi Arabia’s King Salman, also announced on Tuesday, ordered the continuation of allowances covering the cost of living for civil sector employees for the new fiscal year.

“The continuation of the handout package will be positive for household consumption by nationals,” said Malik. “We expect to see some overall fiscal loosening in 2019, which should support a further gradual pickup in real non-oil GDP growth.”

World oil prices on Tuesday tumbled to their lowest levels in more than a year amid concerns over demand. Brent crude contracts fell to as low as $57.20 during morning trading.

Malik cautioned that the oil-price assumptions in the Saudi budget looked “optimistic.”

“We see the fiscal deficit widening in 2019, with the higher spending and forecast fall in oil revenue,” she told Arab News.

Jason Tuvey, an economist at London-based Capital Economics, agreed that the oil forecast was optimistic, but said this should not pose problems for government finances.

“The government seems to be expecting oil prices to average $80 (per barrel) next year,” he said. 

“In contrast, we think that oil prices will stay low and possibly fall a little further to $55 … On that basis, the budget deficit is likely to be closer to 10 percent of GDP. That won’t cause too many problems given the government’s strong balance sheet. 

“Overall, then, we think that there will be some fiscal loosening in the first half of next year, but if oil prices stay low as we expect, the authorities will probably shift tack and return to austerity from the mid-2019, which will weigh on growth in the non-oil sector,” Tuvey said.

John Sfakianakis, chief economist at the Gulf Research Center, based in Saudi Arabia, said that the targets of the budget were “achievable” and the forecast oil price reasonable. 

“It is an expansionary budget that should spurt private sector activity and growth,” he said. 

“With Brent crude averaging around $68 per barrel for 2018 and $66 per barrel for 2019, the authorities have applied a conservative revenue scenario.”