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The government's decision to extend import duty waiver on steel and cement across the UAE is expected to help the country's growing construction sector, although it is unclear if importers would pass that benefit on to the industry. The UAE is a net importer of steel and steel products, while it imports a minor portion of its cement needs.
The rising price of steel and cement in recent months has forced the government to step in. Although this may not be the ultimate solution to the problem, compounded by the falling value of the US dollar and the Gulf currencies, soaring inflation due to rising demand and inadequate supplies, the government has shown a strong political will in supporting the industry by waiving the customs duty - the first by any government in the region.
This reflects the government's firm determination to stand by the business community in time of need.
However, in the absence of a market monitoring mechanism, the move's benefits might not reach its intended beneficiaries, if importers and wholesalers do not pass it on to the contractors and sub-contractors. A strong vigilance on the market, thus, could help the construction sector in benefitting from this.
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