ABU DHABI: The world is currently undergoing one of the worst geoeconomic fragmentations of modern times, with $12 trillion (Dh44 trillion) of global GDP at risk of being wiped out every year, a senior UAE official said.
Amid this climate of mistrust, the UAE is working to restore multilateralism and international cooperation to tackle global challenges, UAE Economy Minister Abdullah Mali said in the capital on Tuesday.
“We live in an era of trade tensions, barriers to the flow of technology and semiconductors, an increase in new trade restrictions and a global surge, and disruptions in the flow of food, technology and energy related to the war in Ukraine. This means trade policy and uncertainty will take a hit , reducing investment by 3.5 percent. It will also reduce GDP by 3.5 percent and increase unemployment by 1 percent,” Al Marri said.
“In the UAE, we have a way of adapting. I’m not a big advocate of fragmentation, and I wouldn’t say we find opportunities in fragmentation. In fact, openness is a national priority,” said UAE President Sheikh Mohammed bin His Highness Zayed Al Nayan mentioned this in his first presidential address in July 2022,” the minister said.
He was speaking at a conference on the importance of economic diplomacy at the Anwar Gargash School of Diplomacy. The meeting, attended by diplomats, students and professionals, called for a return to multilateralism and a system of cooperation.
Al Marri, Minister of Economy since July 2020, highlighted how the effects of fragmentation are unevenly distributed, with adverse effects concentrated on people in emerging economies, heavily indebted companies, the poor and most vulnerable, and small economies body. By trade.
In addition to exacerbating financial insecurity, fragmentation hinders climate action and hinders solutions to other global challenges.
“Geoeconomic fragmentation has been increasing for nearly a decade, and the COVID-19 pandemic and the war in Ukraine have only accelerated some established trends. But do we really want to live in a fragmented world?” he asked.
Al Marri sees economic diplomacy as the main tool in the fight against division.
“For example, the UAE is guiding global negotiations and advancing climate action. We will host COP28 this year and the World Investment Forum in October. Next year, we will host the Thirteenth Ministerial Conference of the World Trade Organization. These make international multilateralism Back to the discussion. The UAE is making great efforts to restore multilateralism in order to address global challenges,” the minister said.
“Economic diplomacy can really build bridges with other countries, foster dialogue and cooperation, and help address common challenges. For example, the 2015 US-China agreement led to the adoption of the Paris Agreement [to combat climate change]. Economic diplomacy can ensure that trade remains the engine of growth. An example is last year’s WTO 12th Ministerial Conference where concessions amid extreme geopolitical tensions led to the adoption of the Geneva Package. Economic diplomacy also relies on soft power, with countries using culture, education and other non-economic factors to advance their interests in a fragmented world,” he added.
In addition, the UAE is also open to investment and talent, as evidenced by a comprehensive foreign investment law and the introduction of green and golden visas to attract and retain talent. It is also establishing a Closer Economic Partnership Agreement (CEPA) with other economies and prioritizing competition within its own economy.
“Studies have shown that changes in foreign ownership laws led to an increase of more than 170 percent in new business licenses in Dubai. This shows that the new laws injected growth into the economy,” said Al Marri.
“We have been working to improve the competitiveness of the UAE economy. We have a competition law that was enacted in 2012 and we are considering revisiting it. We will have a new draft law coming out soon. Competition is important because as the economy and The openness of international trade, there should be no monopoly. For example, when Uber bought Careem, it created some millionaires, but in the economy, it created a monopoly with high prices. Competition is really big for us 1679396041,’ he added.
The country has also signed bilateral free trade agreements, or CEPA, with India, Israel and Indonesia, with more to be announced this year.
The minister advocated multilateralism, a system he said was needed now more than ever.
“Multilateralism was born in the chaotic period after World War II, when the world faced many political and economic challenges. Today, we need multilateralism even more. As the international multilateral system is divided and weakened, the world is experiencing new Unilateral and bilateral approaches.In fact, in the past two weeks alone, we have seen Saudi Arabia and Iran reach an agreement in China, Turkey and Iran heads of state visit Russia, Egypt and Turkey meet after 10 years, Iran and Syria visit the UAE , and the China-Russia summit in Moscow. We’ve seen a lot of bilateral meetings happening in a very fragmented world,” he said, offering hope.
role of diplomat
The minister called on future diplomats to focus on solving global challenges and remain agile in a world where “black swan” events have become the norm.
“Future diplomats must be agile, adaptable to new environments, and good problem solvers. They must also be able to address global challenges, not just national ones [they are stationed in],” he told the gathered AGDA students.