Since a very long time, Dubai has occupied an outstanding position on the trade map of this region. It has always been a flourishing business centre, and its Creek has played a major role in the economic development achieved by this city. The Creek has constantly been an important and a safe harbor for small and medium size ships which sail to the ports of the Arabian Gulf region, the countries of the Indian subcontinent and East Africa, loaded with different goods which are re-exported to these various regions.
Business Activities in Dubai
Dubai is distinguished as one of the trade centers in the Arabian Gulf region. It has acquired this position for several reasons which can be summarized as follows:
Firstly: It occupies a strategic competitive location in the middle of the U.A.E. coast stretching along 400 miles. Its distinct location in the south – western part of the Arabian Gulf enabled it to play an active trading role in linking the maritime lines on one hand, and facilitating transportation of goods between the East and the West on the other hand.
Secondly: Dubai has strengthened its distinguished strategic location by pursuing a free and balanced economic policy that has given it a good reputation in the international, commercial and economic communities, which encouraged national and foreign capitals to enter into successful investment ventures in different commercial, industrial and services fields.
Thirdly: Dubai has boosted the importance of its strategic location and emphasized its free economic policy by setting up complete infrastructural projects along with other services and utilities. Dubai has put in operation these facilities with high efficiency which had an immediate and positive impact on growth rates in the economic sectors, social development and improving living standards of the individual.
In general, the economy of the Emirate of Dubai is based on two main activities which are non-oil trade and oil producing and exporting. Dubai has witnessed, during the last three decades, rapid growth of its trade and industrial activities taking advantage of its several characteristics including its strategic location over-looking the Arabian Gulf, the completion of its infrastructural projects and the running of these facilities according to the latest standards. This has enabled Dubai to become one of the most important centers for imports, exports, and re-exports in the region. During the last two decades Dubai has worked to strengthen its industrial base with the aim of diversifying the sources of income. Therefore, it has established heavy industrial projects in the Jebel Ali Free Zone, and the active private sector has contributed to setting up medium and small manufacturing industries achieving a kind of self sufficiency in some commodities, and even in certain commodities local needs are exceeded and the surplus is exported to overseas markets.
Dubai Foreign Trade
During previous years, foreign trade in Dubai was very active and achieved a considerable rise in the rates of trade exchange growth locally, regionally and internationally. This active movement was a reflection of the requirements of the local and regional markets covered by trading channels which are the free import of most consumable, intermediate and capital goods.
A. Nature of Commodity Exports (Non-Oil) and their Geographical Location
Dubai takes the lead among the other Emirates in the volume of exports as Dubai’s exports constitute around 82.2% of the country’s total exports. The non-oil exports consist of two main groups namely: export of traditional commodities which include dates, hides, frozen and dried fish, iron scrap and other metals. This group represents a minor percentage of the total exports value, the most of which is directed to the Gulf States and the countries of the Indian subcontinent.
The second group is the export of manufacturing industries which are imported by the Arabian Gulf countries and other international markets. Dubai exports aluminum ingots, liquefied gas and readymade garments to Japan, the People’s Republic of China, India, Taiwan, the United States, and some industrial countries in Western Europe . The AGCC markets consume most of the remaining of the U.A.E. exports from manufactured commodities such as foodstuff, chemicals, plastic products, building materials and metallic products. It is noticeable that Dubai’s exports of traditional agricultural commodities or modern manufactured goods are minimal. Nevertheless, it is hoped that Dubai’s exports of manufactured goods such as aluminum ingots, liquefied gas, cement, electric cables and others will increase in the near future due to the expansion of the industrial activity in the country. As to the geographical distribution of Dubai’s commodity exports, Japan occupied the first rank in 1998 with a share of 10% of Dubai’s total exports, while the share of the AGCC countries in the same year was 9%.
B. Nature of Commodity Imports (Non-Oil) and their Geographical Distribution
The volume and value of Dubai’s annual imports is an important indicator of the whole commercial activities in the U.A.E. since Dubai imports more than two thirds of the U.A.E. requirements of all kinds of consumable, intermediate and capital goods in addition to a part of the requirements of the AGCC countries.
The (non-oil) commodity imports of Dubai registered an increasing growth in recent years. Dubai occupies the first place among other Emirates in terms of its share of imports which equaled 73.8% of the value of the U.A.E. total imports in 1999.
During 1999, Dubai imported from 171 countries all over the world. Most of Dubai imports originated from the United States of America, Japan, China, United Kingdom, Germany, South Korea, India, Italy, France and Taiwan. The total share of these countries represented 71% of Dubai’s imports.
C. Nature of Re-exported Commodities and their Geographical Distribution
Over its long commercial history, Dubai has been well known as an active centre for re-export trade to the neighboring Gulf countries. Dubai’s re-exports have gone beyond that to reach the Indian subcontinent and the Eastern coasts of Africa. Dubai has recently been able to invest its own abilities and take advantage of its several diversified facilities to expand its re-export activities to cover all the Gulf and Arab countries and countries of Asia, Europe, America and some African states, re-exporting about 30% of its annual total imports.
The re-export trade in Dubai plays an important role in its foreign trade as its share amounted to 70% of the U.A.E. total re-exports in 1999, excluding the goods re-exported from the Jebel Ali Free Zone which were worth Dhs. 15,031 million.
Destinations of Dubai re-exports totaled 167countries, most important of them are Iran, India, Saudi Arabia, Kuwait, Turkey, Algeria and Turkmenistan. The total value of goods re-exported to these countries amounted to Dhs. 6,830 million or 44% of the value of re-exported goods. The value of re-exports to the AGCC countries amounted to about Dhs. 2,500 million or 15% of the re-exports value.
The Government of Dubai has given top priority to complete infrastructural utilities on the basis of which the drive of economic and social development in the Emirate depends. Here are brief notes on the most important facilities in Dubai:
Dubai International Airport Duty Free Complex Cargo Village B. Seaports
Port Rashid Jebel Ali Port
Jebel Ali Port is the world’s largest man-made harbour and the biggest port in the Middle East in terms of size. Construction of the port commenced in August 1976 and was officially inaugurated in July 1979 with a total construction period of three years.
Historically Dubai Creek had tremendous commercial importance locally and regionally. It has always been a safe harbour to the sailing ships and dhows visiting the Creek from the Arabian Gulf, Indian sub-continent and East African Ports. Those ships used to be loaded with various cargo either for local distribution or re-export. The importance of Dubai Creek as an efficient means for upgrading the commercial activity in Dubai was a justification to introduce some necessary improvements.
Dubai Government considers the possibility of setting up another port in order to handle small fishing ships and to accommodate part of the wooden commercial ships.
Hamriyah Port provides many facilities, for example, the wooden ships visiting the port are exempted from all fees as an encouragement to this type of ships which is closely linked with the active commercial history of Dubai.
Container Repair Container repair workshops are located adjacent to Port Rashid’s Container Terminal. These workshops provide integrated repair facilities to the shipping companies and chatterers while the containers are in the free storage area which minimizes any additional costs.
D. Internal Roads & Highways
Dubai Government constructed a network of modern internal roads to link the various parts of the city with each other. The Government also constructed a number of bridges and tunnels on cross roads. Meanwhile, highways were paved to link the Emirate with the rest of the U.A.E., and with the neighboring Gulf countries. The length of these roads totaled 657.4 kms. The construction cost of these roads, bridges and tunnels exceeded Dhs. 4.5b. E. Telecommunications (Etisalat) F. Electricity Water (DEWA) Dubai Electricity Water Authority
G. International Trade Fairs Exhibitions
Dubai is considered an ideal venue to hold any seminar, conference or trade exhibition, whatever its size, since large halls and spacious showrooms are available in all major hotels and some public bodies such as Dubai Chamber of Commerce & Industry, Dubai Municipality, Dubai World Trade Centre and Dubai International Airport. These halls are equipped with all facilities such as interpretation, telex, secretarial and audio visual services.