Dubai Chamber identifies priority investment sectors industry captain offers insights
Jamal Majid bin Thaniah, director and vice-chairman of DP World, and Andrea Catherwood, an international broadcaster, participate in a panel discussion on trade prospects in the North-South Transport Corridor.
Dubai - The report offers insights on the prevailing economic and business environment in the CIS and examines its relations with GCC countries."
Aviation, logistics, Islamic finance, energy, hospitality, retail and real estate are key sectors in the Commonwealth of Independent States (CIS) that offer opportunities for GCC investment, a report released by the Dubai Chamber of Commerce and Industry showed on Wednesday.
Titled 'A Common Wealth: Building Gulf-CIS ties', the report showcases trade relations between GCC countries and the CIS. The report was launched during the first CIS Global Business Forum, being held in Dubai on Wednesday and Thursday.
Hamad Buamim, president and CEO of the Dubai Chamber, said: "The report will serve as a roadmap for GCC investors. The report offers insights on the prevailing economic and business environment in the CIS and examines its relations with GCC countries."
"The report sees considerable opportunities for engagement in the CIS region by Gulf-based investors, especially in light of the existing diplomatic, cultural and commercial ties and the air links developed through low-cost air travel provided by flydubai and Air Arabia," he added.
The report said the CIS and Gulf regions have witnessed cooperation in areas of investment protection and double taxation treaties, many of them recently ratified, to support future commerce.
The report has identified Belarus as the most proactive CIS country in developing commercial treaty relationships with GCC countries, followed by Russia and Uzbekistan. On the GCC side, the UAE and Kuwait have been the most proactive, it said.
The report said trade flows between the GCC and the CIS are modest, totalling $8 billion in 2014.
Almost all of this trade is between a few country pairs, mainly Saudi Arabia and the UAE with Russia and Ukraine, as well as the UAE with Turkmenistan. These five sets of bilateral flows, both imports and exports, made up 83 per cent of total trade between the two regions, the report said.
Aviation and logistics
The report has highlighted the major role of the UAE's low-cost airlines as major connectors of the regions. According to the report, Air Arabia has five routes to Armenia, Ukraine, Kazakhstan and Russia, but flydubai is dominant, serving 19 destinations across the CIS.
As a result of this network, flydubai, combined with onward flights from Emirates, connects many CIS countries with the rest of the world, particularly Africa and South Asia, the report said. Gulf logistics firms are also active in ground transport, facilitating trade flows.
One area of particular interest in the CIS is Islamic finance, given that the region has an estimated 82 million Muslims, more than twice as many as the GCC. Many Central Asian countries have a Muslim majority, although Russia with 17 million Muslims, who represent only 12 per cent of its population, has more Muslims than the other countries, with the exception of Uzbekistan.
According to the report, the hydrocarbon sector lies at the core of most CIS and GCC economies and has witnessed the most engagement between the two regions. With some Gulf countries facing a shortage of gas to meet domestic power demand, they are exploring new sources of gas from the CIS region, particularly Russia.
Hospitality, retail and realty
GCC firms have been active in consumer-facing sectors in the CIS, drawing on expertise from Gulf markets in areas such as hospitality and retail franchises. Most GCC retail firms have so far overlooked the CIS, focusing on the Middle East and Africa for expansion.
Under current economic circumstances, others are unlikely to enter now as the depreciation of the Russian rouble and other currencies presents a challenge for firms selling imported brands, given reduced local consumer spending power, it said.
In the hospitality sector, Dubai's Jumeirah Group, which already manages a hotel in Azerbaijan's capital Baku, is developing a new hotel in St Petersburg.
Dubai, with its network of flight connections across Russia and the CIS, is the key driver of CIS demand for real estate.
H.E. Hamad Buamim President and CEO of Dubai Chamber of Commerce and Industry . File photo
Delegates attend the CIS Global Business Forum organised by the Dubai Chamber of Commerce and Industry in Dubai.