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Monday, April 22, 2024

Re-exports can fast-track UAE’s economic ambitions


On March 28 this year, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, announced that the Cabinet had approved the National Re-Export Development Agenda 2030. The policy seeks to double the development of re-exports. UAE re-exports over the next seven years – and increase the value added of the UAE economy by 50%. Sheikh Mohamed added that this will be achieved through 24 new initiatives and programs aimed at strengthening and deepening the re-export market, expanding product categories for re-export and simplifying processes to attract more re-exports to the UAE.

The benefits of the policy to the national economy will be enormous, with direct and indirect contributions to GDP increasing exponentially and strengthening the UAE’s position as the nerve center of supply chains and a hub for global trade. Expanding re-exports is key to fulfilling the leadership’s mission to accelerate economic diversification and open up new areas of competitive advantage. In short, re-exports can help rewrite the future of the UAE.

In an exclusive interview with Khaleej Times, Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, outlined the UAE’s plan to double the country’s re-exports and the impact this will have on the national economy.

Re-exports make an important contribution to the UAE economy and our position as a global gateway, which is why our leadership is committed to increasing re-export volumes and the value we can add to re-export products.

Re-exports have always been an important part of global trade. Cities or countries that specialize in re-exports (known as entrepots) are key hubs in today’s supply chains, using their knowledge and networks to facilitate cross-border exchanges and provide intermodal solutions, advanced warehousing, financing and insurance services, and A range of value-added processing capabilities. The more a country re-exports, the more these industries prosper and expand, and the more sought after by the global trading community.

In 2022, the total foreign trade volume of the UAE will reach a record 2.23 trillion dirhams, of which re-export trade will account for 27.5% of the total, or 614.6 billion dirhams. The UAE is one of the top five transshipment centers in the world, with 2.4% of all seaborne container trade transshipped through one of our state-of-the-art ports, with a container port throughput of more than 20 million TEUs (20-foot equivalent units) in 2020.

The largest single industry for re-exports in 2022 is mobile phones and related hardware, accounting for 18.3%, followed by diamonds, public transport vehicles and jewelry. Perhaps more importantly, the UAE is the world’s leading re-exporter of rice, the third largest re-exporter of diamonds and the fifth largest re-exporter of coffee. The UAE is also a leading tea re-exporter, trading with 154 countries worth AED1.89 billion.

From the perspective of the market, Saudi Arabia, Iraq, India, Oman, Kuwait, China, the United States, Hong Kong and Belgium are the main sources of re-exports, of which Iraq and the United States will grow the fastest in 2022.

The latest research shows that re-exports account for 6.6% of the UAE’s GDP. Nationwide, re-exports supported some 1.3 million jobs, not only in logistics and related trade services, but also in banking and finance, insurance, communications, hospitality, transport, healthcare and entertainment.

All in all, we know that for every dollar re-exported through the UAE, the UAE’s GDP increases by 3.4 cents. This equates to a total direct and indirect economic impact of almost AED48 billion.

Doubling our re-exports would have a significant economic impact. This will come through a boost to services such as insurance and trade finance, higher government charges and an overall multiplier effect on sectors such as construction, retail and healthcare from more companies with larger workforces.

Economic modeling suggests that if we succeed, jobs created in the re-export industry will also double. So expanding our role as a global trade hub can have real, tangible benefits.

The Agenda has 24 individual initiatives and programs to help us achieve our goals, which will be rolled out in phases over the next 12-24 months. Essentially, they will focus on three core areas: broadening the geographical reach of our re-exports, whether through Comprehensive Economic Partnership Agreements (Cepas) or deepening ties to existing markets through our network of 50 commercial offices around the world, Also by finding new markets; finding new, untapped product sectors, especially those with high value-added potential, such as forestry products, mining, wool and agriculture; removing bottlenecks and other process barriers, we have worked with the private sector on this There was a discussion.

These initiatives include improving trade finance services for UAE re-exporters and providing duty-free warehousing for certain product categories to ease the financial burden on re-exporters. We also plan to launch a cross-border e-commerce platform to make it easier to import and export small packages and consignments, and we will help exporters target new customers through international trade shows, especially in untapped markets.

Re-exports can help identify high-value products that can be produced in the UAE, thereby supporting the development of the local industrial sector. This will enable re-export substitution by fostering manufacturing clusters in free zones and leveraging existing business networks.

We also want to build more specialized assembly facilities for the manufacture and advanced processing of raw materials to produce exportable goods, in addition to encouraging value addition through specialized operations such as labelling, packaging, repackaging, retailing, limited assembly and processing , in order to maximize the added value of operations.

Copyright © 2022 Khaleej Times. all rights reserved. Courtesy of SyndiGate Media Inc. (Syndigate.info).


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