UAE's Record Non-Oil Trade 2023
In 2023, the United Arab Emirates (UAE) witnessed a remarkable milestone in its economic landscape as its non-oil trade surged to an unprecedented high of 3.5 trillion dirhams ($952.93 billion). Prime Minister Sheikh Mohammed bin Rashid al-Maktoum announced this significant achievement, underscoring the nation's strategic endeavors to diminish its dependence on oil revenues. The surge in non-oil trade, representing a notable 12.6% increase from the previous year, was accompanied by a remarkable milestone: exports of goods and services exceeded 1 trillion dirhams, setting a new record in the UAE's economic narrative.
The surge in non-oil trade is attributed to the UAE's proactive initiatives to diversify its income sources and bolster economic sectors beyond oil. Since 2021, the nation has been actively engaging in bilateral trade, investment, and cooperation agreements, collectively known as Comprehensive Economic Partnership Agreements (CEPAs). These agreements have been instrumental in expanding the UAE's economic horizons and mitigating the risks associated with over-reliance on oil revenue.
Despite external challenges such as disruptions to Red Sea shipping routes due to Houthi attacks, the UAE has demonstrated resilience and adaptability in navigating these obstacles. Thani Al Zeyoudi, the Minister of Foreign Trade, expressed confidence in the nation's ability to withstand such disruptions, emphasizing the robustness of the UAE's economic ecosystem and its capacity to confront global and regional challenges head-on.
The non-oil sector emerged as a key driver of economic growth, significantly outpacing overall GDP growth in the first half of 2023. With a remarkable surge of almost 6%, the non-oil sector demonstrated its pivotal role in propelling the UAE's economic trajectory forward. Zeyoudi highlighted the pivotal role of CEPAs in shaping the future of the UAE's foreign trade landscape, citing substantial growth in trade with key partners such as India and Turkey.
The expansion of services sectors in the UAE, including travel and tourism, information and communication technology, financial services, and professional services, has contributed significantly to the diversification of the economy. Moreover, the nation's non-oil exports, encompassing commodities such as gold, aluminum, jewelry, copper wire, and ethylene polymers, have experienced robust growth, underscoring the UAE's expanding role in global trade dynamics.
Non-oil commodity exports witnessed a notable uptick of 16.7% in 2023, reaching 441 billion dirhams and accounting for 17.1% of foreign trade. This represents a substantial increase from 2019 when non-oil commodity exports contributed 14.1% to the UAE's foreign trade. Additionally, re-exports registered a commendable growth rate of almost 7%, totaling 690 billion dirhams, further reinforcing the UAE's position as a key re-export hub in the region.
In conclusion, the UAE's record-breaking non-oil trade performance in 2023 reflects the nation's steadfast commitment to diversifying its economy and reducing its reliance on oil revenues. Through proactive measures such as CEPAs and the expansion of key economic sectors, the UAE has positioned itself as a resilient and dynamic player in the global economic arena, capable of weathering external challenges and seizing opportunities for sustainable growth and development.
By: Sahiba Suri
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