The UAE and Indonesia, the biggest South-East Asian economy, signed a Comprehensive Economic Partnership Agreement on Friday to boost mutual trade between the two nations.
“The signing of the Comprehensive Economic Partnership Agreement between the UAE and Indonesia, in the presence of President Joko Widodo, builds on the long-standing ties between our two nations and heralds the beginning of a new era of increased trade, investment and economic co-operation,” President Sheikh Mohamed said on Twitter.
Following the signing of the agreement, bilateral non-oil trade is expected to jump from about $3 billion currently to $10 billion in the next five years, Minister of Economy Abdulla bin Touq said in a media briefing on Friday.
The Cepa deal is “very comprehensive”, Dr Thani Al Zeyoudi, UAE’s Minister of State for Foreign Trade, told The National on the sidelines of the event in Abu Dhabi.
The two countries eliminated or will gradually reduce the tariff for almost 99 per cent of “most of the commodities we’ve been trading in the last three years”, Dr Zeyoudi said.
Bilateral trade has already been growing. Non-oil trade between the two countries reached $900 million by the end of the first quarter of 2022 — up 44 per cent compared to the same period last year, he said.
“It means there is a momentum of this growth happening and with Cepa, we are going to accelerate this growth and are hoping to hit $10bn in bilateral [non-oil] trade,” he said.
The agreement is expected to be implemented in the fourth quarter of this year, Mr Al Zeyoudi said.
“We did the proper and excellent governance for dispute settlements and all those matters that could [be a] hurdle or be a barrier for trade between both the nations,” he said.
There will be a special committee for investments which will look after the investments and “ensure they are talking to right stakeholders from both parties”, Mr Al Zeyoudi added.
Overall, the new agreement will add about 0.87 per cent to the UAE’s gross domestic product by 2030, which is equivalent to $4.67bn, and help in boosting the UAE’s exports as well as imports, Mr bin Touq said.
It is also expected to create 50,000 new direct and indirect jobs in the UAE by 2030.
There is “more to come, this is a start to look at more agreements, more investments and more appetite as well for businesses to start investing in both nations and start co-operation”, he said.
The Cepa agreement covers trade in goods and services, investment, intellectual property rights, Islamic economics, customs procedures and trade facilitation, economic co-operation, small and medium enterprises, digital commerce, as well as legal requirements and institutional issues, Indonesia's trade ministry said in a statement.
It is expected to boost Indonesia's exports to the UAE by $844.4m, or 53.9 per cent, in the next 10 years, the ministry said.
Indonesia's imports from the UAE are also projected to rise by $307.3m, or about 18.26 per cent.
“This can be used to reduce trade deficit with the UAE,” it said.
The agreement is Indonesia's first such trade agreement with a country in the Gulf region.
“This shows that the UAE is an important partner for Indonesia, so it is hoped that this co-operation can continue to be improved in the future,” the ministry said.
The latest deal marks the UAE's third Cepa, after it signed a similar pact with Israel in May and with India in February.
Indonesia is on track to be among the fastest growing Asian economies this year. The International Monetary Fund expects Indonesia’s economy to 5.6 per cent and 6 per cent in 2023.
The country's economy returned to growth in 2021 after contracting by 2.1 per cent in 2020 at the height of the Covid-19 pandemic.
Several other preliminary agreements were also signed between the two countries on Friday across sectors, including defence, health care and education.
Emirati-Indonesian relations have grown significantly in recent years, especially after Sheikh Mohamed's visit to Indonesia in 2019.
During Mr Widodo's visit to the UAE in November 2021, government and private sector entities signed deals worth billions of dollars in sectors including energy, aviation, financial services, artificial intelligence, agriculture and defence.
The signing of the Comprehensive Economic Partnership Agreement between the UAE and Indonesia, in the presence of President Joko Widodo, builds on the longstanding ties between our two nations and heralds the beginning of a new era of increased trade, investment and economic co-operation
President Sheikh Mohamed
Agreements valued at about $10bn have been signed with Indonesia’s sovereign wealth fund alone, including DP World's deal to develop the country's ports over a period of up to 30 years.
Etihad Credit Insurance, the UAE’s federal export credit agency, signed an agreement with state-owned reinsurance services provider Indonesia Re to improve funding access to SMEs and mid-cap companies to boost exports.
Indonesia also plans conduct a joint study with the UAE to explore the possibility of setting up a joint venture with the Emirates Global Aluminium.
Several Emirati companies are already working on projects in Indonesia.
In 2020, Adnoc signed a preliminary agreement with Indonesia’s Pertamina and Chandra Asri to explore the possibility of developing a crude-to-petrochemicals complex in Indonesia.
Abu Dhabi’s clean energy company Masdar also signed a power-purchase agreement with Indonesia’s state electricity company Perusahaan Listrik Negara to develop the country’s first floating solar photovoltaic plant.
In March, the UAE invested $10bn with the Indonesia Investment Authority to spend on infrastructure and tourism projects in the country.
The UAE, the Arab world’s second-biggest economy, has made a strong recovery from the coronavirus-induced economic slowdown and has maintained strong trade momentum despite pandemic-related uncertainty.
Exports are projected to expand at an average annual rate of more than 6 per cent to Dh1.1 trillion by 2030, as the country continues to diversify its economy away from oil, Standard Chartered said in a report.
The UAE is currently in Cepa negotiations with South Korea, which are expected to be finalised by the end of this year.
It has also initiated similar talks with Georgia, the Philippines and Turkey, to further boost bilateral trade and investment.
What to watch out for:
Algae, waste coffee grounds and orange peels will be used in the pavilion's walls and gangways
The hulls of three ships will be used for the roof
The hulls will painted to make the largest Italian tricolour in the country’s history
Several pillars more than 20 metres high will support the structure
Roughly 15 tonnes of steel will be used
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3ESingle%20front-axle%20electric%20motor%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E218hp%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E330Nm%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle-speed%20automatic%3Cbr%3E%3Cstrong%3EMax%20touring%20range%3A%20%3C%2Fstrong%3E402km%20(claimed)%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh215%2C000%20(estimate)%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ESeptember%3C%2Fp%3E%0A
MIDWAY
Produced: Lionsgate Films, Shanghai Ryui Entertainment, Street Light Entertainment
Directed: Roland Emmerich
Cast: Ed Skrein, Woody Harrelson, Dennis Quaid, Aaron Eckhart, Luke Evans, Nick Jonas, Mandy Moore, Darren Criss
Rating: 3.5/5 stars
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4.35pm: Tilal Al Khalediah
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7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
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Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Match info
Manchester United 4
(Pogba 5', 33', Rashford 45', Lukaku 72')
Bournemouth 1
(Ake 45 2')
Red card: Eric Bailly (Manchester United)
AL%20BOOM
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UAE currency: the story behind the money in your pockets
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Infobox
Western Region Asia Cup Qualifier, Al Amerat, Oman
The two finalists advance to the next stage of qualifying, in Malaysia in August
Results
UAE beat Iran by 10 wickets
Kuwait beat Saudi Arabia by eight wickets
Oman beat Bahrain by nine wickets
Qatar beat Maldives by 106 runs
Monday fixtures
UAE v Kuwait, Iran v Saudi Arabia, Oman v Qatar, Maldives v Bahrain
Diriyah%20project%20at%20a%20glance
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