UAE reforms seen as magnet for further US investment

UAE Embassy US

• Projects of the 50 include new and amended visa schemes
• US exports to UAE totalled $17.1bn in 2021, a 16 percent increase
• US imports from the UAE totalled $6bn, nearly double that of 2020
• Relationship has come under strain with China’s growth in region

A series of new economic and social reforms, known as the Projects of the 50, will make the UAE an even more attractive environment for American businesses.

According to Danny E Sebright, president of the US-UAE Business Council, the UAE is already widely recognised by American businesses for these strengths.

“Another important strength of the UAE is its business-friendly regulatory environment,” he said. “These new reforms will help make the UAE not just a regional business hub, but a truly global one.”

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The first initiatives under the Projects of the 50 strategy include new and amended visa schemes, comprehensive global campaigns to attract foreign investment, national initiatives to support emerging Emirati companies, and partnerships with major economies across the world.

All seek to establish the UAE as a global hub and a testbed for technologies and innovation.

Sebright added in comments published by UAE state news agency WAM that bilateral trade between the US and the UAE recovered last year from a dip during the coronavirus pandemic.

WAM

“The UAE is an important investor in the US economy,” he said. “Last year, it was estimated that the total 2020 stock of UAE foreign direct investment (FDI) in the US was $65 billion, of which more than $33bn are a direct investment.”

The UAE is one of America’s oldest allies in the Middle East. For decades, its elite have been educated in the US.

However, in recent years this relationship has come under increased strain while the rise of China and its growing penetration of the region is posing significant challenges to American primacy.

Dr Mordechai Chaziza, the author of China’s Middle East Diplomacy: The Belt and Road Strategic Partnership, told AGBI that the economic influence of China through its oil and gas imports from the Gulf and technology transfer provide influence and leverage that runs counter to US interests in the region. 

“In the age of strategic rivalry, the question is whether China is already well on its way to becoming the most prominent technology partner of the GCC countries,” he said.

Dr Thani bin Ahmed Al Zeyoudi, the UAE Minister of State for Foreign Trade, said in April that the UAE intends to stimulate the flow of mutual investments with China, especially in the sectors of AI, clean energy, and infrastructure, as well as developing a joint strategy to attract talent in the fields of technology research.

According to latest figures released by the Bureau of Industry and Security, part of the US Department of Commerce, US exports to the UAE totalled $17.1bn in 2021, a 16 percent ($2.4bn) increase from 2020 while US imports from the UAE totalled $6bn, nearly double that seen in 2020.

The US trade surplus was $11.1bn, down by 4.6 percent ($539.9 million), but still America’s sixth largest trade surplus globally. In the prior six years, the US has maintained a trade surplus with the UAE.

Of the $17.1bn in US exports, the top commodity sectors were machinery and mechanical appliances, transportation equipment and stone, glass, metals and pearls while the US also exported $388.8m worth of arms and ammunition.

The most commonly traded goods going in the opposite direction were base metals, iron, steel and oils, minerals and cement. 

Mubadala Investment Company has invested over $100bn alone in the US while major Emirati companies such as DP World, Gulftainer, First Abu Dhabi Bank, Mashreq Bank, Emirates, Etihad and Masdar have also invested heavily.

Dubai’s biggest carrier, Emirates, and Chicago-based United Airlines also announced a codeshare agreement last week with airline president Sir Tim Clark saying it would “unlock tremendous consumer benefit” and bring the UAE and US even closer.

Earlier this month, Etihad Airways held an event in New York to celebrate its continued commitment to the US market and its North American partners. The airline has increased flights from New York’s JFK International Airport as well as expanding its partnership with JetBlue.

US-based Amazon Web Services announced its second region in the Middle East, the AWS Middle East (UAE) Region, in 2020 which is expected to support nearly 6,000 jobs annually, with a planned $5bn investment in the local economy through to 2036.

Sebright said that the UAE has an ideal location for regional headquarters and hub trans-shipment facilities, adding that more than 1,500 US companies have set up offices in the country.

Looking forward, he said that there is “tremendous potential” for growth in the bilateral relationship, particularly in the areas of healthcare, energy, space, advanced manufacturing and the digital economy. 

Sebright’s comments come as the UAE Minister of Economy, Abdullah Bin Touq Al Marri, hailed the UAE as a hub for commercial expansion, trade and economic growth during an address to over 2,000 global investors, entrepreneurs, policymakers, and industry leaders at the SALT New York conference.

While in the US, the minister promoted the UAE Government’s Investopia Initiative, a campaign aimed to highlight investment opportunities in future sectors such as digital and virtual technologies, artificial intelligence, space exploration and the green economy.

This month, a delegation from the US state of Utah visited Dubai to discuss new economic partnerships with the UAE.

Led by Governor Spencer J Cox, the delegation included over 60 prominent Utah government officials, business executives, and community leaders, including First Lady Abby Cox, House Speaker Brad Wilson and Senate President J Stuart Adams.