The UAE’s logistics industry is gearing up to take advantage of China’s Belt and Road initiative (BRI), under which projects worth $1.1 trillion are at various stages of development in more than 132 countries around the world.
The major initiative, which was launched in 2013 to develop a modern-day version of the land-based Silk Road Economic Belt and the Maritime Silk Road of the 21st Century, will promote the UAE as an international trading hub, as well as a crucial destination linking Asia, Africa and Europe through its state-of-the-art infrastructure for air, shipping and road facilities.
Experts said the BRI initiative will benefit the UAE economy, trade in general and logistics and transport sectors in particular. Referring to the Federal Competitiveness and Statistics Authority’s recent report, they said the logistics sector’s gross output amounted to Dh219 billion last year and the sector’s contribution to the UAE’s gross domestic product is projected to increase to 8 per cent by 2021.
With over 20 per cent of Arab-China trade and more than 25 per cent Chinese exports to Arab countries already passing through the UAE, the Emirates are positioned to take centrestage of the BRI initiative because of its strategic location, excellent infrastructure and stable economic policies.
The UAE and China have already announced many initiatives due to which the UAE will consolidate its position as a key transit point for Chinese exports to African and European countries. One such example is setting up a Traders Market in Jebel Ali Free Zone (JAFZA) that will create the first smart free zone market place in the Middle East for the retail and wholesale industries and aims to serve the wider region with a population base of over two billion. This is augmented with the diversion of COSCO vessels to call at JAFZA as part of this partnership.
DP World and China Commodity City (CCC) Group Company will develop this $150 million Traders Market project by 2021. Zhao Wenge, group chairman of CCC Group, said the Middle East and Africa region is critical for the BRI and his group is ready to serve this high-growth market through the Traders Market.
Sultan Ahmed bin Sulayem, group chairman and CEO of DP World, said this deal highlighted DP World’s ability to attract trade through its best-in-class infrastructure and emphasising Dubai’s position as the regions premier trading hub.
In addition to this, a 2.1 million sqft e-Commerce City is also under construction in Dubai that will cost Dh3.2 billion and ultimately promote trading and logistics in the country.
Experts said the UAE will continue as a strong trading hub for the BRI and the logistics industry will be its major beneficiary.
Referring to a recent report of the Dubai Chamber of Commerce and Industry, they said the UAE’s air freight market will expand by a compound annual growth rate of 4.8 per cent over the 2017-21 period while container port traffic in the UAE is expected to rise from 22.4 million twenty-foot equivalent units (TEU) in 2017 to 28.4 TEU by 2021.
As the BRI develops, the UAE in general and Jebel Ali Port in specific will gain further prominence as an international trade hub for several countries serving as a connecting centre between Asia, Europe and Africa. Pundits continue to espouse that cities along the way of the BRI corridors are set to flourish due to increased trade, investment and job creation and the UAE is juxtaposed to benefit from this as well as the UAE is a crucial connector between Asia, Africa and Europe
It is undoubted that the UAE is strategically and best-positioned among all of its Arab World counterparts to continue being the crucial connector between Asia, Africa and Europe and to support this LogiSYM Dubai 2020, which will be held in June 2020 will continue to support, advocate and develop this with the industry into 2020 and beyond.