The UK aims to drum up investment interest from the Gulf in the wake of Brexit-related uncertainty and renewed confidence among GCC businesses as regional economies recover, Britain's ambassador to the UAE said.
"Brexit raises questions in people's minds so we know that, even aside from Brexit, we have to keep on selling the UK as a great destination for investment, now and in the future," Philip Parham said in an interview with The National. Brexit "is an illustration of the fact that circumstances are always changing and you can't just rest on your laurels".
The UK on Wednesday kicked off an ‘Invest in Great Britain campaign to encourage higher levels of Gulf-driven investment in the world's fifth largest economy and seventh easiest place to do business globally, according to the World Bank. The campaign will showcase opportunities in healthcare, education, retail, energy, real estate and infrastructure.
“The UK has for a long time been very successful at attracting direct investment but we’re not complacent about the competition, which is considerable, and of course Brexit has had its impact," Mr Parham said. The decline in the value of the pound since Britain's vote to leave the European Union has made UK exports cheaper and the kingdom's market more attractive, he added.
UK-UAE bilateral trade increased by around 11 per cent year-on-year to £14.6 billion in 2016, Mr Parham said. The figure is significantly below the target set by both countries in 2015 to double trade by 2020, he said.
“This was clearly a very ambitious, aspirational, target,” he said. It had been based on a doubling of bilateral trade between 2009 and 2014, from roughly £7bn pounds to £12bn, due to a resurgence in business activity after the global financial crisis. The value of UK exports to the UAE currently stands at around £9bn per year.
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The ambassador is optimistic about growth in the year ahead. “There are lots of good reasons why [trade and investment] should grow. In the last couple of years, growth slowed in the UAE due to the low oil price but growth is predicted to bounce back again next year to somewhere between 2 and 4 per cent.
The UK exports more to the UAE than to any other country outside Europe apart from the US and China.
“Just take growth of UAE airlines,” Mr Parham said. “The value of contracts for the sale of aircraft engines by Rolls-Royce to Emirates and Etihad...and of course deals struck in one year then involve exports over the years ahead.”
UK aerospace giant BAE Systems’ plans to cut 2,000 jobs are unlikely to have a knock-on impact on the firm’s business in the Gulf, Mr Parham said, “because they see opportunities here and believe their operations are well suited to those opportunities”.
Meanwhile, UK construction companies – whose work in the Gulf was hard hit by the low oil price – are starting to see a resurgence of business due to improved market sentiment. “In Dubai, Expo 2020 is generating a significant deal flow for British companies,” he said.
There are around 100,000 UK nationals living in the UAE and around 1.5 million British tourists visit the UAE each year.