Dubai as a crossroad for trade
By Virginia F. Bodmer-Altura
Dubai has established itself not only as a trade centre but also as a regional re-export hub (No. 3 worldwide) serving both the Middle East and South Asia. The development in the last five years is impressive. In 2010 Dubai’s re-exports increased by 22.5 % to USD 39.2 billion and surpassed the pre-financial crisis level of USD 35 billion (2008).
Making a comparison between 2006 and 2010 the enormous development is evident. 2010 re-exports worth USD 14.0 billion or a share of 35.7 % went to India (to a high degree diamonds and India has a share of around 50% in diamond processing of Dubai), in 2006 the value for India was USD 3.0 billion or a share of 13.9%. To Iran there were re-exports (more than 3000 different types of goods) in 2010 in the order of USD 6.5 billion (2006: USD 4.0 billion) representing a share of 16.7 % (18.8 %), then Iraq with USD 2.0 billion (USD 1.6 billion) or a share of 5.0 % (7.2%). In 2006 Switzerland showed re-exports of USD 1.9 billion (8.8% share) but in 2010 is no longer amongst the five leading countries. Afghanistan was 2010 the destination of re-exports of USD 1.6 billion (4.2 %) to be followed by Hong Kong with USD 1.2 billion (3.0 %), in 2006 the value was USD 0.3 billion (1.5%). Re-exports to others amounted 2010 to USD 13.9 billion (35.4%) and in 2006 the figures were USD 10.6 billion (49.7 %).
In the first quarter of 2011 Dubai’s trade increased by 34 % on yearly basis and thereof re-exports grew by 44%. The unrest in the Middle East and North Africa had less effect on Dubai, however affected were Egypt, Libya, Tunisia, Bahrain, Yemen and Syria but those have only a insignificant share (USD 2 billion or 5% of all re-exports) in Dubai’s re-exports.
If we compare the regional share 2006/10 we discover that in 2006 38.4 % went to South and West Asia, 2010 it increased to 58.3 %. Arab Countries (including GCC) accounted for 25.7 % (2006) and 16.9 % (2010), Western Europe for 15.6 % respectively 7.7 % and others 20.2% respectively 17.1 %.
Lately the price level for Dubai’s domestic production of goods and services were decreasing a fact that makes Dubai even more interesting for re-exports, amongst also textile machinery, textiles and clothing.