• Home
• /
• Business

UAE emerging as third largest re-export centre

As international trade expanded with globalisation, re-export trade grew alongside, with the UAE emerging as the third largest re-export centre, after Hong Kong and Singapore, with a volume worth $7.6 billion, according to the WTO and UAE trade statistics.

World trade during 2001 declined 1.5 per cent that was described 'sudden and sharp' considering the growth of 11 per cent registered during the previous year. The four regions of Asia, North America, Europe and Latin America registered negative growths. The sharpest decline was in Asian countries which were particularly affected by the slump in the IT industry. The sectors to suffer the most were those that experienced the largest growth during the trade boom of the 90s of the bygone decade. The burst of the IT bubble led to decline in expenditure and demand for office and telecom equipment, with the year 2001 ending with a 14 per cent fall in this sector. Earlier, as the engine of global trade, it was credited as the fastest growing sector, with a ten per cent growth between 1990 and 2001.

Once a leader, the textiles sector is now among the laggards, with consistently lower levels of performance. Agricultural products declined marginally while there was an increase in chemical products, largely due to demand for pharmaceutical products.

Like merchandise trade, commercial services also dropped, the most affected being the travel and tourism industry which declined eight per cent in the aftermath of the 9/11 attacks. Close on the heels were the transportation and insurance businesses. Referring to the UAE economy, it was noted that the re-export demand is relatively dependent on the economic fortunes of the immediate region compared to the global scenario. Nevertheless , its economy cannot remain immune in the event the downturn persists.

Forecasts said that the cumulative trade surpluses of the Gulf states are large enough to tide over short term adversity in export earnings and their re-export trade is expected to be buoyed by the reconstruction of the economy in Iraq.