COUNTRY REPORT: UAE
Logistics industry-related investments gravitate to and surge in the UAE Transportation and storage sectors contributed nearly US$ 20 billion to GDP, accounting for more than 5 % of UAE GDP in 2021—Frost & Sullivan Strong recovery during the post covid growth, improved oil prices, and e-commerce are some factors leading the growth in the UAE in 2022. Freight activity improved significantly in 2021, Jebel Ali Port handled 13.9 million TEU in 2021, and overall economic growth picked up to 3.2 % in 2021, asserts TJ Sivan, Senior Consultant, Supply Chain & Logistics Practice, Frost & Sullivan, the respondent to our questionnaire.
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lobal Supply Chain got the lowdown on the UAE logistics landscape for this special country report in an exclusive Q&A with Frost & Sullivan’s TJ Sivan, our regular contributor, analyst, and consultant. Global Supply Chain (GSC): What is your preliminary assessment of the logistics landscape of the UAE? TJ Sivan (TJS): The impact of Covid-19 on the logistics sector has been severe due to supply chain ‘disruptions,’ stringent restrictions on movement, and border control measures. GDP growth declined by 2.8% in 2020, the non-oil sector, which contributed 73% of the GDP, was declined by 3.9% in 2020, and export growth declined by 20% in 2020. Improved oil prices positively impact government finance and overall GCC growth. Policies are targeted toward easing restrictions and making UAE an attractive destination for investment. With improving economic and trade growth, the logistics landscape is shifting towards an investment-friendly environment with increasing participation of the private sector, and prospects look bright for the logistics sector.
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GSC: Why, in your evaluation, does the UAE occupy a place of pride as a premier logistics hub in the region? TJS: Transportation and storage contributed nearly US$ 20bn to GDP, accounting for more than 5% of UAE GDP in 2021. Being a major logistics hub in the region, connectivity with regional neighbours has improved significantly, driven by growth in trade. GCC is a major destination for non-oil exports and re-exports, accounting for 20% and 29%, respectively. Major re-export markets for UAE include Saudi Arabia, Iraq, Oman, Kuwait, India, and China, accounting for 50% of total re-exports. The recently signed landmark Comprehensive Economic Partnership Agreement (CEPA) with India, is expected to increase bilateral trade by US$ 100bn, and a separate agreement with Israel is also expected to further boost bilateral trade by US$ 10bn by 2027. With a focus clearly on trade expansion and economic diversification, expansion and modernization of transportation and logistics infrastructure will be given priority and UAE will remain a hub for not only for logistics but also for other
