Sep. 11, 2018
The UAE has recorded consecutive trade surpluses for well over a decade. These surpluses have been supported by strong relations with its key trading partners India, South Korea, Japan, China, and the US. Moreover, as the region's highest beneficiary of FDI, the UAE received 16.9% of FDI to Middle East nations and 50.2% of FDI to GCC states in 2016. At its peak in 2015, Ras al Khaimah's economy grew by 5.2% helped by USD1.05 billion in FDI in-flows.
As its leading trade partner, India accounts for 17% of imports to the UAE and receives 14% of UAE exports. Increasingly robust bilateral relations between the two countries have seen the governments of the UAE and India undertake four official state visits in the last three years.
Indian investment in Ras Al Khaimah is significant with almost 3,000 Indian firms operating in the Ras Al Khaimah Economic Zone (RAKEZ), making up around 20% of all firms in the free zone. In March 2018, RAKEZ expanded its offices in Mumbai to strengthen ties with clients and attract further investment from Indian businesses seeking cost-effective, tax-free zones in the Middle East with global connectivity. The largest portion of FDI inflows are to free zones within the UAE. As a result, RAKEZ plays a key role in engaging with companies in Europe and the US to attract them to its free zones, which already count a large number of Indian, Japanese, and Chinese companies.
Aside from India, Ras Al Khaimah is positioning itself to attract further investment from Europe, the US, Japan, China, and South Korea. Within the Emirate of Ras Al Khaimah, the most recent statistics published by RAK Chamber in 2016 record Japan, South Africa, China, and the US as the largest suppliers of non-GCC based imports to the Emirate.
In 2016, a UAE consulate was set up in Guangzhou, China, to strengthen and support relations between the two nations. The UAE has participated in a number of investment events in China and the Chinese contribution to the region is expected to increase in the coming years, spurred on by the One Belt, One Road Initiative. Chinese company Hutchison Ports has since been awarded a 25-year concession to operate the Saqr Port container terminal in Ras Al Khaimah as well as the terminals in the neighboring Emirates of Umm al Quwain and Ajman.
UAE Minister of Economy, Sultan bin Saeed Al Mansouri, attended the UAE-Japan Strategic Business Forum in the early part of 2018. As the UAE's second-largest trading partner, recording non-oil trade of USD14.6 billion, Japan is an important partner for the UAE and is set to play a larger role in Ras Al Khaimah. Meeting with Japan's State Minister of Economy, MoUs were signed between the Japan External Trade Organization and the Ras Al Khaimah Department of Economic Development (RAK DED), the Department of Economic Development in Abu Dhabi, and the Department of Industry and Economy in Fujairah.
Looking west, in November 2017 delegations from Greece and the UAE met on the sidelines of the Euro-Arab summit with a view to further grow their AED2 billion in trade of the previous year. Discussions included expanding opportunities across a variety of sectors such as innovation, maritime transport, infrastructure, tourism, agriculture, and energy. Luxembourg and a high-level delegation from RAK Chamber also met to discuss the importance of developing mutually beneficial economic relations.
Similar bilateral engagements have taken place in Malaysia, with former Prime Minister Mohammad Najib Tun Haji Abdul Razak receiving a UAE delegation led by the Minister of Economy in February 2018. Cooperation discussions have focused on innovation and entrepreneurship, international standards for halal food, the Islamic economy, and promotion of tourism. Ras Al Khaimah is well positioned to benefit from the UAE's expanding breadth and depth of trade and investment relations.