Economy and bilateral trade relations
The structure of the UAE economy revolves around hydrocarbons. The main export products are basically oil, gas and petrochemical derivatives. The strong
The dependence of the Emirati economy on these raw materials has meant that the drop in oil prices since 2015 has affected the economic growth of the country. Although it registered positive growth rates, this circumstance led to a clear deceleration (from 3.8% in 2015 to 0.8% in 2017).
Apart from the extraction of hydrocarbons, the primary sector is very small and only represents 0.8% of the national GDP. The fact that 97% of its surface is desert limits the development of sectors of this branch of activity and determines that the majority of the demand for food products can only be served by imports.
Something similar happens with industrial sectors not related to oil, which barely account for 9.6% of all economic activity. Construction, metallurgical sector, chemicals and plastics, metals and textiles are the most representative subsectors.
Within the services sector, financial activities occupy a prominent place. The presence of international banking entities is significant, including Islamic banking.
Regarding trade relations with Spain, its evolution over the last ten years has been positive for our country. Exports to the UAE in 2017 reached a volume of 1,748 million euros, while imports only reached 338 million euros. Therefore, the surplus was clearly favorable to Spain at 1,409 million euros.
The composition of Spanish UAE imports, according to the most recent data of 2019 (ICEX), is dominated by oil and its derivatives, followed by semimanufactures of aluminum, aeronautical equipment, plastics, electrical machinery, semimanufactures of copper, glass, electronic components, cast iron, automobiles and metal packaging and packaging.
The main products of the Spanish export to the UAE they are aircraft, clothing, automobiles, electrical equipment, pharmachemicals, zinc alloys, steel function, perfumery products, telecommunications equipment, copper semi-finished products and ceramic coatings (ICEX, 2019).
Sectors of opportunity in the UAE
Although the Emirati market is small, with just over 9.5 million potential consumers, they are a good business and logistics platform to reach other markets in the region. However, it presents some characteristics that make it complex and requires more and more implementation as a better option to compete in it. One of the differential aspects of this market is that it requires great flexibility to negotiate prices. In the UAE there is a wealthy class with high purchasing power and very demanding quality products and added value.
On the other hand, foreign companies must also bear in mind that the UAE is a leading logistic, transportation, commercial, financial and trade fair center in the region to facilitate its commercial and investment activities. Expo Dubai 2020 will also be an excellent opportunity to promote investments and business contacts in the country.
One of the sectors that the Emirati Government is promoting the most is the new technologies, particularly those related to "blockchain" and artificial intelligence. In this regard, he is very interested in the development of smart cities.
The sanitary is another of the sectors that are intended to promote. The authorities of this country are carrying out important hospital projects to make the UAE a world reference in this field, opening an important window of opportunity for Spanish companies in sectors such as medical equipment, surgical equipment, pharmaceutical products and construction and management of hospitals
In recent years, an intense real estate activity is being promoted. There are important urban development plans, both residential and office, which offer relevant investment opportunities for foreign companies in sectors such as architecture, public works, machinery and construction materials.
Due to the characteristics of the country and its limitations for food production, the agri-food sector is one of the greatest opportunities for Spanish companies, especially in products such as fruits and vegetables, oil and halal meat products. Fashion and quality clothing is also another interesting opportunity sector for our companies, although taking into account the uses and customs of the country.
The UAE's logistical importance as a gateway to the region has attracted international transport companies and diverse services. In this sense, there are good opportunities in transport infrastructures, information and communication technologies and engineering services and specialized consulting, among other sectors. There are also promising business prospects for renewable energy companies and water and waste treatment.
>> Links of interest:
United Arab Emirates: country sheet
United Arab Emirates: economic and commercial report
United Arab Emirates: country guide
Middle East Business Intelligence