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UAE Growing Economy

Mehmood-Ul-Hassan Khan

Despite ongoing global financial meltdown and increasing of public debts ratios around the world, UAE economy is making impressive growth. According to the primary statistical data of the Federal Customs Authority (July, 2010), the growth of non-oil trade volume of the UAE increased by 14 percent by the end of May 2010 compared with the same period in 2009. It was 52.075 billion Dirhams in last May to 59.604 billion Dirhams in May this year.

Comparative analysis of the Federal Customs Authority data showed that a growth in the country’s exports of non-oil products to the outside world by 65 percent during that period from 4.353 billion Dirhams in May 2009 to 7.197 billion Dirhams in May 2010. The re-exports item reregistered a growth rate of 22 percent with a rising value from 11.26 billion to Dh13.763 billion Dirhams. Moreover, the item of imports grows by 6 percent with a rising value from 36.463 billion to Dh38.644 billion Dirhams for the same period.

The Authority’s data indicated that the UAE non-oil foreign trade volume in terms of value mounted to 59.604 billion Dirhams in May 2010, of which 38.644 billion Dirhams value of imports, 7.197 billion and the value of exports, 13.763 billion the value of re-exports. It further stated that the UAE foreign trade volume in terms of weight during May 2010 amounted to 6.176 million tons, of which 3.893 million tons, the weight of imports, and 1.496 million, the weight of exports and 787 million tons, the weight of re-exports, which means that the average of daily weights of customs packages that has been handled by the various customs outlets in terms of export, import and re-export amounted to about 26 thousand tons per day on the basis of official working hours with an average of 3 tons per hour.

It is also verified by the recently published report of the WTO which says the UAE’s global ranking has advanced to the 19th place in 2009 on the list of the most important countries in commodity exports, moving up by one position from the same list in 2008, and 8 positions from 2005. The report further stated that the UAE also came in the 24th with regard to commodity imports, which totalled Dh515 billion in 2009. It means that the UAE has become one of the world’s 20 most important exporters. According to the newsletter, the Ministry of Foreign Trade, the UAE ranked 11th globally and first from among Arab countries, on the list of most attractive investment destinations in 2010. The report also reveals that the UAE’s foreign trade sector has witnessed a noticeable improvement during the period between 2005 and 2009, which is evident in international reports.

The WTO report (July, 2010) further highlighted that between 2005 and 2009, the UAE’s foreign trade has gone up by an average 18.6 percentage points. It was primarily a consequence of the increase in non-oil exports and re-exports by 18.2 percent, in addition to an increase in exports by an average of 18.9 per cent for the same period. Moreover, the UAE is considered commercially as one of the world’s most open countries where the percentage of non-oil foreign trade in relation to GDP reached 73 percent in 2009.

It is a positive sign for the macro-economy of the UAE which would bring dividends in the days to come. It also reaffirms the visionary leadership qualities of the UAE rulers who introduced effective financial management and good governance to mitigating the bad effects of financial crisis since 2008. The growth indicators in these items highlighted the continued improvement in the trade balance of the UAE with the outside world during the reporting period, which underscores the increasing competitiveness of UAE exports in world markets despite the financial crisis that has hit the global economies over that period.

Careful geographic comparison of inflows of imports-exports of the UAE shows that India, China, USA, Germany, Japan, UK, Italy, Saudi Arabia, Turkey and Switzerland, respectively, are the top countries that the UAE dealt with under the item of imports in May 2010 with a value of 23.692 billion Dirhams and a rate of 61 percent of the total value of the UAE imports, while Switzerland, India, Iran, Saudi Arabia, Pakistan, Iraq, Oman, Qatar, Kuwait and China, respectively, ranked in the top of countries in the field of non-oil exports with a value of 5.602 billion Dirhams for the same period with a rate of 78% of the total value of exports. Furthermore, India, Iran, Iraq, United Kingdom, Afghanistan, Saudi Arabia, Bahrain, Belgium, Qatar and Kuwait, respectively, ranked in the top place in terms of re-exports with a value of Dh9.934 billion a rate of 72% of the total value of re-exports.

The Federal Customs Authority also compared very Emirate contribution in the macro-economy growth of the UAE especially non-oil trade volumes. The Emirate of Abu Dhabi, Dubai and Sharjah have occupied 97.5 percent of the total non-oil trade volume of the country in May 2010.

Name of the Emirate Total Trade Volume
Abu Dhabi 9.386 billion Dirhams
Dubai 37.905 billion Dirhams
Sharjah 3.498 billion Dirhams
Ajman 435 million Dirhams
Ras Al Khaimah 83 million Dirhams
Fujairah 723 million Dirhams
Umm Al Qaiwain 44.7 million Dirhams.
Source: Federal Customs Authority (July 2010).

In GCC, UAE and Saudi Arabia have been cementing their trade relations. The trade volumes with other regional countries are moving in right direction and with the passage of time it will be further strengthened.
(May, 2010)
Name of the Country Total Value of Trade
Saudi Arabia 1.792 billion Dirhams
Sultanate of Oman 681 million Dirhams
Bahrain 643 million Dirhams
Kuwait 608 million Dirhams
Qatar 552 million Dirhams
Source: Federal Customs Authority (July 2010).

The data also stated that gold and diamond have maintained in the top ranking of the top ten items of non-oil trade of the UAE during the period. The value of gold trade in the UAE including gold plated with platinum, Unwrought or semi-manufactured, or as powder amounted to AED 5.5 billion last May, and diamond 3.7 billion Dirhams, cars and other motor vehicles designed to transport persons except the motor vehicles designed for transporting amounting about two billion Dirhams, jewellery and parts thereof, of precious metal or metal clad with precious metal of 1.8 billion Dirhams, and telephone apparatuses including cellular mobiles or other wireless networks; or other devices to send or receive voice, images or other data, including the means of communication in a wired or wireless networks 812 million Dirhams. The surge in the above mentioned commodities clearly verifies the high consumer confidence of the UAE.

The Authority explained that UAE foreign trade volume reflects the importance that the UAE has occupied on the map of world trade and the global economy as the UAE a point of trade attraction in the region and the world, and the increasing role of the UAE in achieving economic growth through the activation and raise the performance efficiency of the customs sector, in accordance with the modern concept of the country’s role in light of application of the free market economy mechanisms, in addition to the increasing role of the Authority and the various customs Departments in the national economy structure and raising the efficiency and competitiveness of the economy between the region’s countries and the territory.

Concluding Remarks

Under the visionary leadership the UAE is achieving high skies. Its economy is stable and sustainable and forward-looking. It has diversification and dynamics too. Rigorous macro-economy reforms and financial policies have made the UAE safe heavens for any kind of foreign investments. It has become hub of international trade and commerce. It has achieved technological excellence. It is now a leading trading gateway, not only in the GCC but also in different regions of the world.

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