The UAE 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 AED1.1 trillion ($299 billion) by 2030, a research report said.

 

Future of Trade 2030: Trends and markets to watch, a new research by Standard Chartered, projects that 22 per cent 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 reveals 13 markets that will drive much of this growth, identifies major corridors, and five trends shaping the future of global trade. 

 

UAE future growth corridors 

India and Mainland China will continue to be among the largest export corridors for the UAE, accounting for 18 per cent and 9.5 per cent 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 cent per year until 2030, the report said.

 

Growth sectors

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 machinery and electricals (share 9%, CAGR 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 Kone ($939 bn); India ($563bn); Indonesia ($347bn); Kenya ($10bn); China ($5,022bn); Malaysia ($498bn); Saudi Arabia ($354bn); Singapore ($687bn); South Korea ($971bn); UAE ($299bn); and Vietnam ($535bn).

 

The report, commissioned by Standard Chartered and prepared by PwC, 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 per cent 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 per cent 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 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 per cent of corporate leaders acknowledged the need to implement these practices across their supply chains, only 34 per cent 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.” – TradeArabia News Service