China and India accounted for almost one quarter of the UAE's imports and total bilateral trade value in 2008, according to a government report released on Sunday.
The report, released by the Ministry of Foreign Trade, shows the UAE has relied on non-Arab Asian countries for about 44 per cent of its bilateral trade volumes from 2005 to 2008, when its economy was nearing a double-digit annual growth rate. European and American countries made up the next two major groups of trading partners for the UAE.
Although not entirely new, the figures released yesterday by the ministry represent the first official compilation of trade statistics for last year. In its report, the ministry said the report will "eventually" be published on a quarterly basis.
The ministry's move comes less than two weeks after the Federal Customs Authority (FCA) released non-oil trade figures for the first half of this year. The authority also promised its reports would be issued quarterly, but did not specify beginning when.
The report shows the UAE's total non-oil trade topped $214.6 billion (Dh792 billion) last year, a 42 per cent jump from 2007. Despite government efforts to increase trade with regional partners, only Iran and Turkey made the top 10 list of trading partners in 2008, comprising just over 7 per cent of total trade value. Saudi Arabia, which had ranked seventh in 2007, dropped out last year.
Imports increased year-on-year by 46 per cent in 2008 to $154 billion (Dh568 billion). Despite a 35 per cent surge in exports, the UAE's non-oil trade deficit widened from $61 billion (Dh225 billion) to $93 billion (Dh343 billion).
"Part of what's driving import growth is the process of diversification," said Giyas Gökkent, chief economist of the National Bank of Abu Dhabi's Asset Management Group. "For the time being, one has to recognise that yes, it's a very energy-endowed country but the only way to move forward is to generate these trade deficits."
Lower commodity prices and global trade volumes have already impacted the UAE's trade figures for this year.
According to FCA, bilateral trade for the first half reached just Dh310 billion.
Meanwhile, total imports declined by 5 per cent in the second quarter to Dh104 billion compared with the first three months of the year and re-exports declined by 9 per cent to Dh32 billion.
Minister of Economy Sultan Al Mansouri has said he expects re-exports to decline as a result of the global recession, but for stabilisation to begin taking shape in the fourth quarter and for positive growth to return next year.
"Even though [the trade deficit] looks large, you have to put it into perspective," said Gökkent, adding the increase in government spending on infrastructure projects and increased private sector investment in the industrial sector have had a direct impact on the growing gap between imports and exports.
UAE Foreign Trade was concentrated at 57 and 59 per cent, respectively, in 10 countries in 2007 and 2008. The rest of the 180 countries contributed 43 and 41 per cent, respectively, with a growth rate of 37 per cent.
The top 10 countries contributed 65.2 and 70.7 per cent to the UAE's total non-oil export volume in 2007 and 2008, respectively, while the rest contributed 34.8 and 29.3 per cent during the same years. India ranked first in UAE exports with a total of $4.9 billion, comprising 29.7 per cent of UAE non-oil exports in 2008.
Seven Arab countries occupied the top 10, five of which were GCC countries. ***Egypt, the sixth Arab country, held on at sixth with a contribution of 3.7 per cent in 2008, while the seventh Arab county on the list is Iraq at ninth with a contribution of 2.4 per cent. Kuwait is the only country among the top 10 that recorded a decline in its UAE export growth in 2008 while Egypt, Bahrain and Oman joined the top 10 list in 2008 instead of Pakistan, China and the US. Arab countries are not key exporters to the UAE with the exception of Saudi Arabia, whose exports reached $3.5 billion.
Revenues: Oil exports make up 74%
UAE oil exports accounted for about 74 per cent of its total for 2008. According to figures released in August by the Inter-Arab Investment Guarantee Corporation, an affiliate of the Arab League, the UAE's total exports reached $231.5 billion (Dh854 billion) in 2008.
Combined with non-oil export data released yesterday by the Ministry of Foreign Trade, the country's oil exports last year came to $171 billion (Dh 630 billion).
The UAE saw oil exports surge by 28 per cent last year on the back of record oil prices that were, on average, about 40 per cent higher than in 2007.