Abdulrahman Al Ansari examines new figures which suggest that the United Arab Emirates (UAE) saw its non-oil foreign trade expand significantly in 2015.
Gulf News reports that the UAE is moving towards a non-oil economy. Figures from the nation’s Ministry of Economy indicate that Emirati real Gross Domestic Product (GDP – the broadest measure of economic growth), expanded by 4.6% in 2014. It’s also expected to grow by 3% – 3.5% in 2015.
Evidence suggests that UAE GDP growth was supported by its non-oil sectors, which expanded by 8.1% in 2014. Now, non-oil industries account for just over two thirds (68.8%) of Emirati GDP, suggesting that these sectors act as the main drivers of the UAE’s economic expansion.
Non-oil foreign trade
Furthermore, the Ministry of Economy’s data indicates that Emirati non-oil foreign trade grew 10% from 2014 to 2015, to hit Dh1.75 trillion. The Ministry’s report suggests that these statistics show the UAE’s competitiveness as a centre of regional trade is rising.
The Ministry further stated that non-oil trade inclusive of free zones, reached Dh1. 632 trillion in 2014. Free zones are Emirati areas with special tax, customs and import regimes designed to attract foreign investors. Direct trade equalled Dh1.072 trillion, while the value of imports totalled Dh696.4 billion.
Top trade destination
Meanwhile the World Trade Organisation (WTO), which regulates international trade, recently released its ‘Trends in International Trade’ report for 2015. It suggested that the UAE is adopting the right approach to improving its trading system, allowing it to record strong progress year after year.
The UAE ranked 22nd on the WTO’s global investment index for 2015, first of all the Arab nations surveyed. The Organisation attributed this to the ability of the UAE’s industries to attract foreign trade. WTO figures show that Emirati exports totalled Dh132.2 billion in 2015, while re-exports hit Dh243.7 billion in the same period.
Attracting foreign trade
The Ministry of Economy also said that non-oil sectors will increasingly come to support economic growth; their contribution to the UAE’s economy is expected to hit 80% by 2021. This will be enabled by strong investment in the UAE’s manufacturing, tourism, air, maritime transportation, import and re-export sectors. One way the country can attract the capital its non-oil industries require to aid Emirati GDP expansion is through foreign direct investment (FDI).
As the International Monetary Fund explains, FDI brings many benefits to its host country. This includes helping it develop human capital through employee training, allowing the transfer of technology and generating profits which allow the nation to boost corporation tax revenue. This is why the Ministry of Economy and WTO’s latest statistics are so important. These figures suggest that the UAE is a top destination for foreign investors, who could supply the Emirates’ non-oil industries with the capital they need to lift the Middle Eastern country’s GDP to new heights.
About Abdulrahman Al Ansari
Abdulrahman Al Ansari has more than 18 years of experience in the global financial services industry. He serves as the chairman of a number of reputable financial firms including AMA Investment Holding and Bid Capital Management Consultancy.
Abdulrahman’s professional portfolio encompasses a diverse range of sectors from commodities and natural resources to education, healthcare, oil & gas and investment banking. He has earned a reputation as an innovator, who consistently develops new ideas and solutions to address the complex and demanding challenges which confront his clients every day. Over the years, Abdulrahman has cultivated a special interest in the continued economic and community development of the UAE.