By His Excellency Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade
In just a few short months, the outbreak of COVID-19 and its disruption of the flow of trade between countries has hit world economies hard, bringing various sectors to a near standstill across the globe. According to the World Trade Organization (WTO), estimated an 18.5% decline in merchandise trade in the second quarter of 2020 as compared to the same period last year
At this time, preparedness, resilience, and adaptability have gained paramount importance in the global trade space. Countries must exhibit these qualities to recover, perhaps slowly but steadily, from the implications of the pandemic.
The UAE’s dynamic, robust business environment has served the country well during these trying times. As one of the most attractive global investment destinations and the third-largest re-export hub in the world, the UAE has taken prompt and effective measures to mitigate the impact of the pandemic on its trading sector. These include allocating a US$77 billion economic stimulus package by the government, in addition to a significant reduction in the cost of doing business, and the adoption of an extensive relief scheme by the banking sector to help borrowers facing cashflow shortage.
As another notable step, the Ministry of Economy has set up an interactive online platform dedicated to assisting the business community in dealing with the impact of COVID-19. Apart from providing more clarity on the preventive and control measures that companies must follow to continue operating either from their offices or remotely, the platform presents a set of proposals and guidelines in accordance with best business practices.
We also recognized the utmost significance of a sustained trade flow in ensuring the availability of food and medical supplies and other essentials in the region. Despite movement restrictions, we maintained uninterrupted operations of logistical networks and air, land, and sea freight operations, in addition to capitalizing on the potential of the UAE’s leading logistics and port management companies that are located in more than 70 countries.
It has now become abundantly clear that the global economy will require a major overhaul to meet the needs of the post-COVID-19 world. Therefore, our strategies to deal with the economic fallout of the pandemic are not just limited to offering assistance to affected sectors. We have placed an equal emphasis on proactive efforts to enhance the ability of vital sectors to cope with similar circumstances in the future, thereby making them more resilient. We are also focusing on new approaches and exploring ways to turn current challenges into opportunities that can drive sustainable future economic growth. These include digital transformation of most activities, promotion of skills needed for future jobs, and the integration of technology at every stage of production, which we believe is necessary to ensure business continuity under any circumstances.
Most recently, our government has launched the Fifty Economic Plan. It consists of 33 initiatives that are currently being implemented, with an aim to drive the fastest economic recovery in the world, and establish the country’s economy as the most stable and diversified in the long term.
The UAE’s resilience comes as no surprise. The country has long demonstrated a steadfast commitment to creating a competitive, attractive investment environment, backed by enabling legislation, low taxes, and state-of-the art infrastructure.
Last year witnessed a significant step forward in this regard with the issuance of the Foreign Direct Investment Law and the implementation of the first Positive List that enables to 100 per cent foreign ownership in 122 selected economic activities. In addition, the country is among the 54 economies that have introduced at least 107 measures to promote, facilitate, and attract FDI to their markets.
As a result, the UAE’s non-oil foreign trade increased to US$464.3 billion in 2019, recording a 4.8 per cent growth compared to 2018.
In terms of global competitiveness in attracting FDI, the country assumes 24th position globally and first in Western Asia in 2019, according to the United Nations Conference on Trade and Development’s (UNCTAD’s) World Investment Report 2020. In 2019, the FDI inflow to the UAE amounted to US$13.8 billion, while the cumulative inward FDI and outward FDI reached US$154.1 billion and US$155.4 billion respectively. On the other hand, the total Emirati direct flows investments in foreign markets amounted to US$15.9 billion last year.
These figures only testify to the country’s strong focus on making inroads into new markets and attracting foreign investments.
In addition to effectively leveraging its G20 membership, the UAE, along with several other world countries, supported international endeavours to strengthen the multilateral trading system through its endorsement of the Joint Ministerial Statement, an initiative by New Zealand and Singapore that aims to ensure supply chain connectivity amidst the COVID-19 pandemic.
Solid bilateral and multilateral trade partnerships are instrumental to revitalizing world economies. With its wealth of investment opportunities and a safe, stable, and – most importantly – resilient business environment that is conducive to growth, the UAE is uniquely and distinctly positioned to become a leading partner in global economic recovery.
For further information
Ministry of Economy, UAE: https://www.economy.gov.ae/English/ministry/pages/minister-of-state-for-foreign-trade.aspx