UAE Manufacturing Sector Urged To Pursue Open Trade Policies

A recent Dubai Chamber of Commerce and Industry (DCCI) study has urged the UAE to continue promoting open trade policies that will increase manufacture exports to developing countries.

The study also recommended the use of advanced technologies that would raise the international competitiveness of the country’s manufacturing sector.

The UAE’s manufacturing sector is one of the largest contributors to the nation’s non-oil GDP growth, with a stable percentage contribution of 14 per cent over the last decade.

Manufacturing exports from the emirates accounted for 53 per cent of the UAE’s total non-oil exports of merchandise goods and 22 per cent of its total exports.

The UAE’s manufacture exports rose from $8.3 billion in 2000 to about $59.2 billion in 2012 registering an annual growth rate of about 18 per cent, the study found.

Asia was the biggest market for the UAE receiving 77 per cent of its manufacture products while Africa followed with a 10.4 per cent share. Europe and the U.S. absorbed the rest of manufacture exports from the country.

The sector profitability had a robust growth until 2008 but declined slightly due to the economic downturn.

According to the study, the gross operating surplus of the UAE’s manufacturing activity grew around 8.2 per cent between 2001-2008 before dropping to -19 per cent in 2009, picking up again in 2011 and 2012.

Dubai was found to house more light and service manufacturing industries while Abu Dhabi’s competitive advantage was more towards heavy industries owing to its availability of cheap energy, the study said.

The development of free zones was found to have fuelled investment in the UAE’s manufacturing sector with just Dubai’s Jebel Ali free zone hosting 6,000 businesses from 110 countries.

Out of them, 75 per cent are involved in trading, warehousing and distribution while 20 per cent are focused in manufacturing and the rest in service industries.

As per the data released by the UAE ministry of economy, the country’s main industries include food and beverages, tobacco, chemicals, metals and paper. The largest individual manufactured products include aluminium, cabling, petrochemical, steel and marine industry products.