Arabian Gulf states are looking at ways to diversify their economies
Push for UAE trade with Asia and Africa
The UAE wants to expand trade ties with fast-growing nations in Asia and Africa, a senior official said on Sunday.
Arabian Gulf states are looking at ways to diversify their economies, including with whom they trade, after more than two years of depressed oil prices spurred a rethink of government spending.
The pace of economic growth in Asian and sub-Saharan African economies has made them ideal partners, Abdullah Al Saleh, the undersecretary for foreign trade and industry at the Ministry of Economy, said in Dubai on Sunday.
Asia’s two largest economies China and India are expected to grow by 6.5 per cent and 7.2 per cent this year, the IMF said.
China’s economy has shown signs of improvement in the first two months of the year with little risk of a hard landing, senior Chinese officials said on Sunday.
China’s macroeconomy stabilised in the beginning of 2017, Ning Jizhe, the head of the National Bureau of Statistics, said at the sidelines of the annual legislative meeting in Beijing.
Industrial output in January and February grew more than 6 per cent, and the services sector expanded over 8 per cent, he said.
In combination with rising retail sales and fixed asset investment data, “these readings would suggest robust growth momentum continued in early 2017”, the Bloomberg Intelligence chief Asia economist Tom Orlik wrote in a note.
The IMF said sub-Saharan Africa is forecast to expand by 2.8 per cent.
There are “huge opportunities” in China and India but also in Singapore and Indonesia, Mr Al Saleh said.
In 2015, the UAE’s non-oil trade with Asia was worth Dh450 billion, according to Mr Al Saleh.
Two-thirds of the country’s trade with Asia is with six markets: China, India, Japan, Iran, South Korea and Hong Kong.
The UAE wants to see free trade agreements between the GCC and China, India, Australia and New Zealand to be a priority, Mr Al Saleh said.
The GCC has made little material progress on free trade negotiations despite talks being open with around a dozen different countries and groups.
“Hopefully … in near future we see more agreements,” Mr Al Saleh said.
Economic ties with China and India have deepened since and official visit by Abu Dhabi government chiefs to the two countries in 2015 and 2016, respectively, according to Mr Al Saleh, with UAE companies now having “better access to the markets”.
Although already having close ties with North Africa, in part through shared culture, language and religion, the UAE is looking for deeper ties with sub-Saharan Africa.
“The latest reforms in some of the African countries are very attractive for us,” Mr Al Saleh said.
There is potential for greater trade and investments in Kenya, Ethiopia, Tanzania, Namibia, Angola and Mozambique, he said, and while Nigeria, Africa’s largest economy, is going through a period of instability it cannot be ignored either, he added.
“The growth is there in these markets and there is big demand for services and goods,” he said.
“What we need to do is connect our business community with business communities in these countries.”