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International Review: United Arab Emirates

In the new material of the series “International Review” will be going on a state that has risen above the desert dunes thanks to oil revenues, and today is creating the technologies of the future, attracting world trade and financial flows. We represent the United Arab Emirates.

United Arab Emirates (UAE) is a federation of seven Emirates with an absolute monarchy in each of them (Abu Dhabi, Ajman, Fujairah, Sharjah, Dubai, Umm al-Qaiwain, Ras al-Khaimah), located along the eastern side of the Arabian peninsula. The state is headed by the President of the United Arab Emirates. Executive power is exercised by the Supreme Council of the Federation. Legislative power is vested in the unicameral Federal National Assembly. The official language of the UAE is Arabic, the national currency is the dirham, the territory - 71 thousand km2.

The population of the UAE amount 9,9 million people, of which the indigenous people are 11%, the rest are immigrants from Pakistan, India, Bangladesh, Sri Lanka, Nepal and other countries of South Asia and the Philippines, who immigrated to the UAE as temporary workers. 85% of those living in the country are not UAE citizens. 88% of the UAE's population is concentrated in cities. The largest and fastest growing city is Dubai with a population of over 2,5 million. Other major cities are Abu Dhabi (capital), Sharjah, Al Ain and Fujairah.

The richest emirate is Abu Dhabi; the main oil reserves of about 94% are concentrated on its territory. The Emirate of Dubai is a leader in the country in diversifying the economy, reducing dependence on the oil factor, attracting foreign investment, service trade - tourism, information, transport and commercial.

Intresting fact: the Sheikh Zayed Mosque in Abu Dhabi is the sixth largest in the world. Everyone is allowed into it, not only Muslims. The mosque's carpet is also the largest in the world.

Dubai. The second largest emirate, home to over 2.5 million people. The busiest airport in the world operates here, the tallest building in the world (the Burj Khalifa skyscraper with a height of 828 m, 163 floors), the largest flower park in the world (Dubai Miracle Garden with an area of 72,000 m2 in which more than 150 million flowers grow).

The emirate of Dubai is home to the Palm Islands archipelago of artificial islands. The archipelago includes 3 large palm-shaped islands: Palm Jumeirah, Palm Jabal Ali, Palm Deira. Palm Jumeirah has a 5 km monorail, the first in the Middle East, and private villas.

The world's first Office of the Future office building, which was printed with the help of 3D-printer, is located in Dubai. The project cost 50% less than the traditional construction of a similar building. The building is located in the city center near the Dubai International Financial Center.

Recently was build in Dubai one of the most amazing structures in the world - the Museum of the Future. It will feature unique art objects, design studios, inventions and developments from both promising startups and tech giants. The museum is planned to open as part of the EXPO 2020 exhibition, which starts in the autumn of 2021.

Interesting fact: Every fifth crane in the world is in Dubai. The tallest building on the planet is also located here - the Burj Khalifa skyscraper with a height of 828 m.

A cryptocurrency center DMCC, an ecosystem for companies operating in the cryptographic and blockchain sectors, has been created in Dubai. In the center are represented all types and sizes of crypto companies, from developing blockchain-based trading platforms to offering, issuing, listing, and trading cryptoassets.

Economy

The UAE has been a member of the World Trade Organization since 1996, the Gulf Cooperation Council (GCC), the League of Arab States, the UN, the Arab Free Trade Area (GAFTA). Participate in the General Agreement on Tariffs and Trade (GAPP) since 1994. Free trade agreements have been signed with Singapore and the European Free Trade Association (EFTA).

The main sectors of the economy of the Emirates are the extraction and processing of oil and gas; tourism; transport and logistic; metalworking, chemical, textile and construction industries. Free trade zones were created here, assuming 100% foreign ownership and zero taxes, which helps to attract foreign investors. The most popular free trade zones in the UAE are located in Dubai.

The country's economy is characterized by a high level of openness, active development of the industrial sector, and growth in foreign trade. The dependence on the oil sector remains, but its share in GDP is steadily declining. The volume of GDP is estimated at  $354 billion (35th place in the world), GDP per person - about  $32 thousand (26th place in the world).

The UAE is ranked 31st in the Human Development Index (UN), 42nd in the Legatum Institute's Prosperity Index, 29th in the World Justice Project Index, 21st in the Corruption Perceptions Index (Transparency International), 16th in the ranking of Doing Business (The World Bank Group), 25th in the Global Competitiveness Index (World Economic Forum).

Interesting fact: The native-born population of the UAE is one of the richest in the world. More than 60 thousand dollar millionaires live in the Emirates.

The UAE is the most convenient place for doing business in the Gulf region, given the developed infrastructure and investment climate. Over the past decade, the UAE has acquired the status of the main business center in the Middle East. According to Forbes, the top 10 largest companies in the Middle East includes three companies from the UAE at once: First Abu Dhabi Bank and Emirates NBD, as well as the telecommunications corporation Etisalat Group. Their total market capitalization is estimated at $ 78 billion US dollars.

Among the largest companies in the Emirates, ADCB Group (a financial conglomerate with a market capitalization of $9 billion), DP World (a logistics and investment holding that owns ports, terminals, industrial parks and economic zones, market capitalization exceeds $12 billion), Emaar Properties ( a construction holding in the Middle East with an asset valuation of $31 billion and a market capitalization of $4 billion), ADNOC Distribution (distributor of fuel, concoctions, food, capitalization $9.2), du (a telecommunications company with a capitalization of $6.4 billion), TAQA ( the leader of the UAE energy sector), The Air Arabia Group (the first low-cost operator, owner of a chain of hotels, travel operators, a number of IT companies with a capitalization of $1.2 billion), Orascom Construction Limited (capitalization of $0.6 billion), investment companies ALDAR Properties ( $3.3 billion) Dubai Investments ($1.3 billion), International Holdings Company ($7.1 billion), Orascom Construction Limited ($0.8 billion), banking and financial structures Dubai Islamic Bank ($7.1 billion), Mashreqbank ($3.5 billion), Abu Dhabi Islamic Bank ($3.9 billion), Commercial Bank of Dubai ($2.9 billion) ), RAKBANK ($1.8 billion), National Bank of Fujairah ($2.6 billion), Sharjah Islamic Bank ($0.8 billion).

The bulk of the UAE's exports are oil, petroleum products, aluminum, iron, and plastic products. The main export countries are India, Japan, China, Saudi Arabia, Oman. The largest imports are precious stones and metals, equipment and machinery, electronics, vehicles. The main importing countries are China, India, USA, Germany, Great Britain. A significant part of the UAE's trade is re-exported to India, Iran, Iraq, Afghanistan, Saudi Arabia, Kuwait, Belgium, Bahrain, and Oman.

Extraction and processing of oil and gas. The main sector of the UAE economy remains the fuel and energy complex. Oil and gas are the main natural resources of the UAE, which are of global importance. The UAE has large reserves of oil, the export of which makes up a significant part of the GDP. Oil reserves are estimated at 13 billion tons (5.7% of world reserves), natural gas at 6,100 billion m3 (3.3%). Oil production is approximately 2.2 million barrels per day. Oil production is almost entirely in the hands of the state. The largest oil producers are Abu Dhabi National Oil Company (ADNOC), Abu Dhabi Onshore Production Company (ADCO), Abu Dhabi Offshore Production Company (ADMA-OPCO). The UAE's energy policy is determined by the Supreme Petroleum Council. The bulk of oil exports go to Japan, India, Singapore, China and Australia.

Interesting fact: Despite the fact that the UAE's well-being is based on oil, this country is one of the leaders in the development of solar energy

Building. Thanks to the growing population, an expanding business ecosystem, the UAE's real estate sector is growing rapidly. In the capital of Abu Dhabi, till 2030 is planned to construct: 686,000 homes, 7,5 million m2 of office space, 4 million m2 of retail space, 15 million m2 of production space. The largest construction companies in the UAE: Dubai Properties, Emaar Properties, Aldar Properties, Arabtec, Meraas, Nakheel Properties, Meydan, Damac, Cayan, Bloom Developers. In the UAE, in particular in Dubai, the direction of 3D printing in construction area is actively developing. Dubai's 3D printing strategy envisions that every new building will be 3D printed by 25% by 2025.

Energy sector. The energy sector plays an important role in the country's economy. By 2050, the UAE plans to receive more than 75% of the country's energy from renewable or alternative sources. The most promising is the development of solar energy, as well as oceanic hydroelectric power plants. Abu Dhabi plans to allocate about $165 billion for the development of alternative energy sources over the next 30 years.

Industry. In recent years, the manufacturing industry of the UAE has been actively developing. The industrial sector accounts for about 20% of GDP. By 2025, it is planned to increase the contribution of the industrial sector to a quarter of the country's GDP. Machinery, light, chemical, food industries, etc. are actively developing. In the emirate of Sharjah, there are light industry enterprises that produce furniture, dishes, plastic products, and cement. In Ras al-Khaimah there are factories for the production of medicines, factories for the production of cement, building stone, asphalt. Fujairah supplies the domestic market with marble, limestone, cement, asbestos, building blocks.

Intresting fact: An Emirati sheikh named Hamad created a unique drainage system that supplies the desert area with water. Not only the idea of the system is unique, but also its form: it is the name of Sheikh HAMAD written in Latin letters, which can be seen from space.

Transport services and infrastructure. The development of the tourism sector is inextricably linked with the modernization and development of transport infrastructure. The UAE is a global transport hub connecting the trade routes of the West and the East. The Emirates occupies a leading position in the world in terms of passenger and freight traffic. Air transport plays a leading role in international traffic.

There are six international airports in the UAE: Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, Fujairah, Al Ain. The International Air Transport Association predicts a 4.9% annual growth in passenger traffic in the Middle East and North Africa till 2034. Dubai is the largest airport in the UAE, with an average of 959 flights per day. National airlines of the UAE: Etihad Airways, Emirates, Flydubai.

The Emirates have developed automobile and sea transport modes. There are more than two dozen ports in the country through which more than 100 million tons of cargo are transported yearly. Major seaports are: Al Fujairah, Mina Jebel Ali (Dubai), Khor Fakkan (Sharjah), Mubarras Island (Abu Dhabi), Mina Rashid (Dubai), Mina Sakr (Ras al Khaimah). The length of highways is relatively short and amounts to 4080 km, of which 253 km are high-speed highways.

Tourism. One of the key areas of diversification of the UAE economy, reducing dependence on the oil factor, is the development of the service sector, primarily foreign tourism. There are over 1,100 hotels in the UAE. Huge investments in infrastructure and favorable climate contribute to attracting foreign tourists to the country. The most interesting for tourists is the Emirate of Dubai, where the main recreational resources of the country are concentrated.

Banking sector. The banking sector makes a significant contribution to the UAE economy. The UAE Banking Association includes 51 banks (24 local and 27 foreign). Fisrst Abu Dhabi Bank is the largest in the UAE and one of the largest in the Middle East and North Africa region with total assets of over $203 billion. The UAE is home to two of the world's leading financial centers: Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM).

Intresting fact: Some of the ATMs in the UAE can dispense not only banknotes, but also gold.

Wholesale and retail sectors. The retail and wholesale sectors, which account for over 12% of the UAE's GDP, are essential to an economic diversification strategy. The UAE has embarked on a course of uniting traders and buyers from all over the world, primarily through the DUBAI WHOLESALE CITY. Covering over 55 million f2, it is the largest wholesale center in the world and a strategic base for 15,000 of the world's largest traders. The retail sector is developing due to tourism, population growth, and strengthening of the national economy.

UAE and Belarus

In 2020, the trade turnover between Belarus and the UAE amounted to $110 million, including Belarusian exports of $89 million. This is a record figure in the entire history of Belarusian-Emirates relations. The main export items are trucks, antioxidants / inhibitors / thickeners, synthetic fiber tow, uncombed synthetic fibers, furniture, oil products. Belarusian companies mainly import from the UAE oil products, foodstuffs, propylene polymers, ethylene polymers, medicines, etc.

The volume of bilateral trade in services in 2020 amounted to $129,5 million, including Belarusian exports in the amount of USD 101,1 million (101,2% to the level of 2019). The main types of export services in 2020 were transport, business and computer services.

In 2020, direct investments on a net basis in the economy of Belarus from the UAE amounted to $19.4 million. The total volume of accumulated investments from the UAE in the Belarusian economy as of January 1, 2021 exceeds $320 million. There is a Joint Cooperation Committee between the governments of the two countries. In May 2014, the BelCCI and the UAE CCI Federation signed a Memorandum on the establishment of the Belarusian-Emirates Business Council, the first meeting of which was held in October 2014 in Abu Dhabi. After that, a number of mutual meetings and visits took place, where they mainly discussed issues and prospects for cooperation in the banking, agro-industrial, construction, energy, woodworking and furniture spheres. In February of this year, the administration of FEZ Grodnoinvest took part in the webinar "Doing Business in the UAE: Opportunities in Dubai for Belarusian Companies", which was held with the support of the Embassy of the Republic of Belarus in the UAE, the export agency "Dubai Exports" and the National Center for Marketing and Price Study.

In 2020, the export of residents of FEZ Grodnoinvest to the UAE amounted to $572 thousand. The main export items: yarn, furniture, engineering products. Over the entire period of the SEZ's activity, 1.9 million US dollars of investments were attracted from the UAE, including $1.3 million in 2020. In 2018, Vilaris, a company with capital from Emirates, was registered as a FEZ resident, and which is implementing a project to develop a transport and logistics terminal in the Grodno region on the border with the Republic of Poland.

Promising directions for the development of business relations between FEZ "Grodnoinvest" and the United Arab Emirates may be:

  1. Implementation of joint investment ideas and projects in the field of woodworking, chemistry and fertilizer production, agriculture, construction of an industrial park on the basis of existing production facilities.
  2. Implementation of a comprehensive project to create a multimodal logistics center in FEZ Grodnoinvest.
  3. Implementation of infrastructure projects in the field of tourism on the territory of the special tourist and recreational park Augustow Canal.
  4. Establishing trade and dealer relations, taking into account the export potential of FEZ residents, which is reflected in the section “Residents”.
  5. Production cooperation and subcontracting at the reserve capacities of FEZ residents in the field of light industry, pharmaceuticals, and the chemical industry.

During the period from October 1, 2021 to March 31, 2022, the World Expo 2020 will be held in Dubai. The exhibition area will serve as a place to demonstrate the latest ideas and technologies, as a platform for the presentation of the economic, investment, and cultural potential of the participating countries. Currently, more than 190 countries of the world have confirmed their participation in the exhibition. The organizers expect about 25 million visitors. Belarusian companies will present their National Exposition at the EXPO 2020 World Exhibition.

In case of interest in the implementation of these and other areas of cooperation, participation in business events as part of the delegation of the Grodno region at the EXPO-2020 exhibition, the administration of the FEZ Grodnoinvest is ready to assist in establishing business contacts, organizing meetings and business negotiations, exchanging business information. Proposals can be sent to e-mail: invest@grodnoinvest.by.

Previous issues of the "International Review" cycle: