The United Arab Emirates (UAE) has firmly established itself as a world leader in industrial performance, thanks to sound government strategies and ambitious growth targets. Keen to diversify its economy and reduce its dependence on oil, the UAE is positioning itself as a hub for the industries of the future. Here are the key points that underline this transformation:
Solid industrial performance
The UAE occupies a prominent place on the global industrial competitiveness stage, ranking 27th in UNIDO’s Competitive Industrial Performance Index. Initiatives such as ‘Make it in the Emirates’ and the national ‘In-Country Value’ (ICV) programme have significantly boosted local production capacity. These strategies not only better support local businesses, but also attract international investment, demonstrating the UAE’s commitment to a diversified economy.
Ambitious growth targets
The United Arab Emirates’ Operation 300bn initiative aims to triple the industrial sector’s contribution to GDP, from AED 133 billion in 2021 to AED 300 billion by 2031. In parallel, Abu Dhabi’s industrial strategy aims to double the size of the manufacturing sector to AED 172 billion. These ambitious targets reflect the UAE’s determination to become a central player in global industrial markets.
Priority sectors
The United Arab Emirates is focusing on value-added sectors that are key to sustainable growth. Key industries include
- Food and drink: The focus is on processed foods and beverages.
- Pharmaceuticals: Strengthening local production capacity.
- Chemicals: Including basic and speciality chemicals.
- Electronics and machinery: Promoting innovation and technology.
- Hydrogen and low-carbon technologies: Research into renewable energy sources, in particular the manufacture of photovoltaic solar panels.
By prioritising these sectors, the UAE aims to build a more resilient economy while creating employment opportunities for its citizens and residents.
An investment destination
The United Arab Emirates’ favourable investment climate is reinforced by high levels of foreign direct investment (FDI), a strategic location and a strong logistics infrastructure. By 2023, FDI inflows had reached an estimated US$30.69 billion, making the UAE a destination of choice for international investors. Economic hubs such as Dubai and Abu Dhabi, with free zones such as DMCC, Jebel Ali Free Zone and KEZAD, offer an ideal environment for business operations.
Government support
The UAE government actively encourages industrial growth through initiatives such as revised tax rates, streamlined business procedures and world-class infrastructure. Industrial clusters such as TA’ZIZ and KEZAD offer specialised support to various sectors, encouraging local and foreign investment.
Market access routes
The UAE offers a wide range of market entry opportunities for foreign investors. These include
- Partnerships with local companies: Facilitating access to the market.
- Onshore investments: Direct investments in local companies.
- Use of free trade zones: Benefit from tax exemptions and regulatory advantages.
- Merger and acquisition opportunities: Acquiring existing companies for an immediate market presence.
- Greenfield investments: Setting up new operations tailored to the specific needs of businesses.
Positive outlook for the future
The future of the UAE’s industrial landscape is promising, with continued growth in FDI. The Government aims to attract $150 billion in FDI by 2031, leveraging the resilience and dynamism of the UAE’s business ecosystem. While the region continues to evolve, the UAE stands out as a hub for the industries of the future.
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Region-specific value propositions for Pakistan
- Strategic location: The UAE’s proximity and efficient connectivity to Pakistan’s markets make it an ideal springboard for companies looking to expand.
- Growing economy: The UAE’s strong economic growth offers Pakistani companies many opportunities to prosper and expand their businesses.
- Ease of doing business: The simplified processes for setting up a business and the investor-friendly regulations in the UAE create a favourable environment for Pakistani companies.
By taking advantage of these benefits, Pakistani companies can leverage the dynamic UAE market to strengthen their global presence.
