Standard Chartered Says UAE Exports To Cross $299 billion by 2030
The UAE, which is focusing on expanding its exports beyond petroleum and reinforcing its position as a gateway to MENA, will be a key driver of the global trade growth this decade, with its exports projected to grow at an average annual rate of more than 6 per cent to cross $$299 billion by 2030, a research report from Standard Chartered said.
The report entitled “Future of Trade 2030: Trends and markets to watch,” projected that 22% of global corporates currently do or plan to source in the UAE within the next five to 10 years. This is evidence that the UAE will be a major driver of global trade growth over the next decade, it said.
The report said global exports will almost double from $17.4 trillion to $29.7 trillion over the next decade. The report said 13 markets that will drive much of this growth, identifies major corridors, and five trends shaping the future of global trade.
UAE’s future growth corridors
India and Mainland China will continue to be among the largest export corridors for the UAE, accounting for 18% and 9.5% of total exports in 2030, respectively. Singapore is a regional trade hub and strategic corridor for the UAE and is projected to grow at an average of 6.2% per year until 2030, the report said.
The UAE is focusing on expanding its exports beyond petroleum and reinforcing its position as a gateway to MENA. The following sectors will dominate exports in 2030: Metals and minerals (share of exports 60%, CAGR growth 7.6%); gold (share 14%, CAGR 8.3%) and share of machinery and electrical would be 9% at a CAGR of 6.4%.
The 13 markets driving the future trade growth, according to the report, are (expected export figures in 2030 in brackets): Bangladesh ($51 billion); Hong Kong ($939 billion); India ($563 billion); Indonesia ($347 billion); Kenya ($10 billion); China ($5,022 billion); Malaysia ($498 billion); Saudi Arabia ($354 billion); Singapore ($687 billion); South Korea ($971 billion); UAE ($299 billion); and Vietnam ($535 billion).
Standard Chartered commissioned the report and PwC prepared it and is based on an analysis of historical trade data and projections until 2030, as well as insights from a survey of more than 500 C-suite and senior leaders in global companies.
Global trade will be reshaped by five key trends: the wider adoption of sustainable and fair-trade practices; a push for more inclusive participation; greater risk diversification; more digitisation and a rebalancing towards high-growth emerging markets. Almost 90% of the corporate leaders surveyed agreed that these trends will shape the future of trade and will form part of their five to 10-year cross-border expansion strategies.
Globalisation will drive the next decade of growth. Despite the recent push towards onshoring, growth corridors of the future will not just be intraregional – they will be global spanning Africa-East Asia; ASEAN-South Asia; East Asia-Europe; East Asia- Middle East; East Asia-Europe; South Asia-US.
Asia, Africa and the Middle East will see a ramp-up in investment flows, with 82% of respondents saying they are considering new production locations in these regions in the next five to 10 years, supporting the trend towards rebalancing to emerging markets and greater risk diversification of supply chains.
Enabling sustainable supply chains
The research also found a significant trend towards the adoption of sustainable trade practices in response to climate concerns and a rising wave of conscious consumerism. However, while almost 90% of corporate leaders acknowledged the need to implement these practices across their supply chains, only 34% ranked it as a ‘top three’ priority for execution over the next five to 10 years.
Standard Chartered, in line with its commitment to help make global trade more sustainable and drive the transition to Net Zero, launched a Sustainable Trade Finance proposition to enable companies to build more sustainable and resilient supply chains. In addition, we offer a suite of sustainable finance solutions to channel capital towards helping companies achieve their Net Zero goals.
Syed Khurrum Zaeem, Managing Director, Head of Trade & Transaction Banking, Africa & Middle East, Standard Chartered Bank, said: “As part of its ambitious diversification plans from hydrocarbons, the UAE is successfully working towards cementing its position as the key trade gateway.”
“India and Mainland China will continue to be among the largest export corridors for the UAE, accounting for 18% and 9.5% of total exports in 2030, respectively. With global trade expected to double by 2030, trade practices will need to be reviewed to be more equitable and sustainable. As an international bank with a unique footprint we are continuously looking to innovate our products to help our clients implement fair-trade practices across their supply chains.”