Dubai exports looking good
Ambitious export growth has been targeted for 2011 by officials, but export dumping by other countries could yet rock the boat.
December 15, 2010 3:33 by Samuel Potter
Dubai’s non-oil exports could grow as much as 20 percent next year, according to the latest reports. The expected jump is attributed to emerging African markets and is expected to help drive a wider recovery.
In contrast to the predictions of some (Standard Chartered, we’re looking your way), Saed Al Awadi, chief executive of the Dubai Export Development Corporation (EDC), said on the sidelines of the exporters forum, “For 2011, it won’t be less than 2010. Growth of total exports will continue and we hope it will not be less than this year, which is 20 percent.” Earlier this week Standard Chartered’s predictions for the year ahead said trade and re-export in Dubai would grow, but will not sustain the huge growth of 2010.
Al Awadi has a vested interest in talking things up of course, but his confidence could be justified. According to the Gulf News, Dubai’s direct exports increased by 35 percent in the first three quarters of 2010, and re-exports leapt 25 percent (ie goods from abroad just traveling through Dubai. Re-exports account for most of Dubai’s export industry). Imports, meanwhile, posted a 17 percent increase.
Director of Dubai Trade, Mahmoud Bastaki, told Gulf News he agreed with Al Awadi. “In 2010 there was an increase over 2009 of more than 20 per cent and in 2011 we expect more to happen in terms of value and opening new markets and new products.”
Well, you can’t say they don’t talk a good game. “Our main objective is to place the UAE as one of the leading exporting countries in the world,” says Al Awadi, before adding a caveat. “Although this vision is still far-fetched due to a major challenge posed by the dumping policy of some major industrial countries and with their long history in manufacturing that is hard to compete with, our Government is willing and able to overcome such challenges.”
Ah ha, the plot thickens. Al Awadi is referring to Dubai’s (and the UAE’s) ongoing concerns over other economies supporting their own exporters. Dumping means exporting goods abroad for below cost of production, or selling products for less abroad than at home.
It’s a policy often pursued by countries in economic difficulty – the domestic economy needs propping up, and this is done via trade with other countries. The cheaper the exports, the more trade is generated; long term it is not necessarily sustainable, but short term it can be a valuable crutch. But it means producers in other countries are undercut, and thus it damages their exports.
Given the dire financial straits many countries in the world still find themselves in – in the European Union for instance – this practice could yet put paid to Dubai’s ambitious export targets for 2011.