Dubai will need to strengthen relationships with key trade partners, particularly India, if it is to close the gap on leading global hubs such as Singapore and Hong Kong.
According to recommendations made in a report released yesterday by the Dubai Economic Council (DEC), the emirate should look to establish its own bilateral trade and investment protection agreement with India, which is its top trading partner. The report outlined proposals for supporting sustainable economic growth.
Dubai’s Jebel Ali is the only port outside Asia to be ranked in the top 10 largest facilities. Shanghai, Singapore, Shenzhen, Hong Kong and Busan in South Korea make up the top five according to the Journal of Commerce.
The value of the emirate’s foreign trade last year topped Dh1.3 trillion, half of which was with Asia, according to government data. That compares to around $1tn for Hong Kong.
Trade between the UAE and India reached $75bn in 2012-13, up from $43bn in 2009-10, according to HSBC. The UAE is also India’s top export destination, accounting for more than 10 per cent of exports. By 2030 India is expected to become the UAE’s top export destination and last year a bilateral agreement was signed to protect investments in both countries, setting out a framework for bilateral engagement.
“Further improvements in logistics capabilities, transparency of custom clearance procedures and investment in telecommunications infrastructure could enhance trading activity,” the DEC report said.
Other recommendations to boost the competitiveness of Dubai’s economy include focusing on easing foreign ownership restrictions, efficiency of settling disputes, bankruptcy regulation and access to trade finance.
“Dubai’s next challenge is to continue to develop its soft infrastructure and regulatory framework … to turn the city to be in the forefront in global competitiveness, the most innovative city, the global capital of Islamic financing, in addition to meet the critical success factors of Expo 2020,” said Hani Al Hamli, the DEC Secretary General.
According to Humphry Hatton, the chief executive for financial advisory services in the Middle East Region, at Deloitte, the co-authors of the report said: “it is important to recognise that these developments need to go hand-in-hand with further development of Dubai’s financial services industry, through promoting equivalent product innovation, and balancing asset quality, growth, and liquidity, and also by developing the asset management industry.”
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