UAE’s non-oil trade hits Dh1.9t in 2021 as economy recovers

The UAE’s non-oil foreign trade recorded a 27 per cent year-on-year jump to Dh1.9 trillion last year as the economy gradually recovered from the Covid-19 pandemic aftershocks and opening of international borders following successful vaccination drive, experts say.

Latest official data indicated that non-oil trade rose 11 per cent last year when compared to same period in 2019 as the growth was consistent across all areas of trade including exports, imports and re-exports. All seven emirates of the UAE also witnessed a significant rise in trade, reflecting a comprehensive growth achieved by the UAE’s global trade last year.

“The value of non-oil exports climbed to Dh354 billion, setting a new record, exceeding Dh300 billion for the first time in its history, achieving a growth of 33.3 per cent compared to that of 2020 and 47.3 per cent compared to that of 2019,” according to latest data released by Ministry of Economy.

Trade data for 2021 showed that the total value of re-exports reached at Dh521.3 billion, reflecting a year-on-year growth of 27.7 per cent last year and 1.6 per cent when compared to 2019. Moreover, the total value of the country’s imports during 2021 amounted to about Dh1 trillion, showing a growth of 23.8 per cent over the year 2020, and about seven per cent from 2019.

Leaders acknowledge performance

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, took to Twitter to highlight that the country’s post-Covid recovery has been strong.

“Our economic growth trajectory is going up and our dependence on oil is decreasing. The future looks beautiful and more sustainable,” Sheikh Mohammed tweeted on Sunday.

Abdulla bin Touq Al Marri, Minister of Economy, affirmed that the country’s non-oil foreign trade performance once again proves that the UAE is among the most vital and active trade and business hubs regionally, which also boasts an important position on the global trade landscape.

“The UAE’s foreign trade has by far passed the stage of recovery from the impact of the Covid-19 pandemic on global trade and has entered an advanced stage of growth and prosperity today, with more than 11 per cent growth compared to the pre-pandemic stage. The all-encompassing nature of the positive results of import and export activities and re-exports in all the emirates of the country reflects a systematic and integrated growth based on flexible and highly efficient trade policies and sustainable development measures,” the minister said.

China, India largest trading partner

As per trade data, China ranked as the country’s largest trading partner in 2021, accounting for 11.7 per cent of the UAE’s total foreign trade. The value of non-oil trade exchange between the two countries amounted to Dh212 billion, reflecting a growth of 27 per cent from 2020 and 19.8 per cent from 2019.

India ranked second, which accounts for 8.7 per cent of the country’s total non-oil trade, with a value of Dh164.4 billion, followed by Saudi Arabia in the third position with a contribution of 6.6 per cent and a value of Dh125 billion during 2021, achieving a growth of 20 per cent compared to 2020 and 10.1 per cent compared to 2019.

The United States and Iraq claimed fourth and fifth positions, respectively.

In terms of the UAE’s export destinations, India emerged as the top nation, accounting for 13.8 per cent of the total exports. It handled Dh50 billion worth of UAE exports, reflecting a growth of 150 per cent from 2020 and about 100 per cent from 2019.

Saudi Arabia became second largest recipient of the UAE exports, with a contribution of 10.7 per cent as it received Dh38 billion of the exports, achieving a growth of 48 per cent compared to 2020 and by 22.4 per cent compared to 2019.

New milestones, real achievement

Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, noted that the non-oil foreign trade data that was recorded for the year 2021 is a real achievement and a new milestone for this vital sector.

“These results come in light of the launch of the Projects of the 50 and the continuous efforts being implemented by the country to enhance its position on the international trade map and ensure an attractive, active and open commercial environment to the world and linked to a diverse and strong network of global supply chains. These efforts have laid solid foundations to sustain the growth of the country’s foreign trade over the coming years,” the minister said.

“There is no doubt that these results will further enhance confidence among business owners and economic and commercial activities in the country, as well as trading partners from different countries of the world, in the importance of the UAE as a capital of trade and highlight the capabilities and opportunities that the country possesses to engage in activities and businesses,” Al Zeyoudi said.

Diversification pays dividend

Shailesh Dash, a Dubai-based entrepreneur and financier, said the latest data confirms that the UAE policy of diversifying from oil to the non-oil sectors is being implemented with a lot of success.

“In the current ever-changing market scenario, the UAE leadership and policy makers have consistently been able to evolve and have been in the forefront of the changes which has been helpful in driving foreign investment to the country and has been helpful in driving development in the various non-oil sectors,” Dash said.

He said the above has also helped in improving the wealth conditions of the Nationals and residents of the country now the slowly focus has to shift to being a net exporter from the country.

“That would mean the country has to attract talents from all parts of the world in a very big way which will require various other changes and I am sure UAE leadership is already putting in action plans to have the same being achieved in the next decade,” he said.

Saad Maniar, senior partner at Crowe, said certainly the UAE is very attractive in terms of its infrastructure and flexibility offered in ease of doing business, including business-friendly laws and regulations. This will certainly contribute towards sustainable future.

“The opening of the Museum of the Future is a testament of the vision of our rulers. The UAE will be leading innovation in future and that will shape the future of UAE,” Maniar told Khaleej Times on Sunday.

Transformation towards knowledge economy

Vijay Valecha, chief investment officer, Century Financial, said diversification from crude oil is a key pillar of UAE’s economic strategy.

“The jump in non-oil trade numbers suggests that UAE is achieving solid progress in its transformation towards knowledge and manufacturing-based economy. Among the different Emirates, Dubai is focused on the service sector and building itself as a logistics cum trading hub,” Valecha told Khaleej Times on Sunday.

He said the other Emirates like Abu Dhabi, Ras Al Khaimah, and Sharjah have made a lot of progress in the manufacturing sector.

“And each of these Emirates has strategic plans to attain its economic goals. Technology transfers and attracting multinationals to the country have played a significant role in the country’s progress,” he said.

“As a country, UAE’s share of global trade has consistently risen during the past decade, and the journey is far from over. The country will reach greater heights during the coming decade,” he added.

Solid performance

Mohammed Shaheen, CEO, Seven Capitals, said the value of non-oil exports alone amounted to Dh354 billion in 2021 which was a fantastic growth. He said gold, ornaments and jewelry; aluminium; plastics, copper and associated articles; iron and steel articles; were the five most important non-oil exports of the country.

“The country’s non-oil trade significantly grew with the five fastest growing economies in the first half of 2021. The strategic initiatives such as comprehensive economic agreements with a number of targeted global markets, and the 10×10 export development programme designed to provide an additional incentive to strengthen the UAE’s comprehensive economic and trade partnerships with countries around the world,” Shaheen said.

— muzaffarrizvi@khaleejtimes.com