- Why is Dubai stated as Dubai’s hub? Justify it.
A hub is a centre of activities, be it social or economic activities. Dubai is a centre of economic and financial activities for many economic sectors and industries, such as tourism, gold, diamond, trading, retail and financial activities.
Businesses in large economies, such as China, India, the United States, United Kingdom, Germany, Japan, France, Italy, Australia, as well as other countries in Asia and Africa, trade their goods through Dubai due to a number of factors, such as the world-class infrastructure, global non-stop connectivity to more than 200 cities in more than 120 countries through airlines, convenient and fast shipping routes, efficient logistics facilities, business-friendly environment, safety and security, among others.
Although the population of Dubai is under 3 million, its annual foreign trade volume exceeded US$196.81 billion in the first half of 2021. This means, the full-year total foreign trade value could exceed an estimated US$393 billion. This reflects the fact that more than 90 percent of the traded goods are routed through or centred around Dubai – using it as a hub.
Most traders import, export and re-export goods from different countries such as India, China, Germany, United Kingdom, France, Spain, Egypt, Lebanon, Iran and re-exports these goods to countries where the demand is high. So, Dubai is used as a hub by the business community due to its business-friendly policies, connectivity, sound logistics base and other benefits.
Businesses evolve around key cities such as Singapore, Hong Kong and Dubai. So, Dubai is an economic hub or centre in its real sense.
- What does Dubai trade the most?
Foodstuff, commodities, fast-moving consumer goods, personal care, toiletries, gold, diamonds, precious metals, jewellery, automobiles, spare parts, clothing, garments, spices, nuts, electronics, electricals, mobile phones, building and construction mateirals, etc
- Why trade is so vital in Dubai?
Dubai is not known for manufacturing goods, So, it doesn’t produce much of the products its consumers consume or traders deal in. Trade, tourism and retail sectors provide economic lifeline to Dubai. It mostly imports, exports and re-exports goods to different countries. Traders use Dubai to source products from different countries, as it hosts businesses who can supply any products to anywhere due to its connectivity and geographic proximity.
- How does trade affect the economy of Dubai?
Trade provides the economic lifeline to Dubai’s economy. Dubai is predominantly a trading economy and its economic growth depends on trade activities.
- Who is the biggest trading partner of UAE and other major trading partners?
China, India, United States, Germany, Japan, United Kingdom, France, Iran, Saudi Arabia are the top trading partners of the UAE. However, India and China are the top two and they keep changing positions between No 1 and No 2 from time to time.
- What are the types of trade that are present in Dubai? Elaborate please.
It is mostly limited to import, export, re-export, wholesale, direct supply, distribution, retail and e-commerce activities. Most imports, exports and re-exports are done through banks’ Letter of Credit (LC) system that helps importers and exporters to trade in goods across borders. However, wholesale and retails are done the traditional ways – through bank cheques, credit facilities or cash, depending on the relationship one enjoys with customers.
- How did Dubai Logistics Corridor transform into a Global Logistics Hub?
Even before the establishment of Dubai Logistics Corridor, Dubai historically has been a great logistics corridor itself.
In the olden days, wooden dhows/boats used to carry goods from Mumbai, Karachi, Bandar Abbas, Nairobi, Mombasa, Dar Es-Salam, Cairo, Kuwait, Iraq, Bahrain, Qatar and Oman, etc, which they still do, to a certain extent. It was part of the old spice route. Later, when Port Rashid started to receive ocean-going vessels, most trade started to land at Port Rashid.
Since the early 1980s, trade and logistics started to concentrate around the newly-built Jebel Ali Port and Jebel Ali Free Zone where most large companies set up warehouse and logistics base. So, it has now become the largest port, freezone and the logistics base in the Middle East and Africa, catering to more than 3 billion people in Asia, Africa, Middle East and parts of Europe.
With the new Dubai South city and Al Maktoum International Airport at its centre-piece, an air-to-sea logistics corridor – perhaps the world’s largest such facility has evolved that will continue to grow once the airport runs at full capacity.
- How does this huge trading hub in Dubai help the society? (Like employment, reforms etc.)
Trading is one of the largest employers of professionals in Dubai as this sector dominates the economic activity. It helps employment and the employees support their families – children’s education, entertainment and recreation. So, this has a direct impact on Dubai’s economy and society.
- Is Dubai a free-trade country? Please discuss.
Dubai largely remains a free port. Other than 5 percent import duty and 5 percent vat, it remains free from other taxes. Other than these, there is no restrictions on trade.
- What is the future of trade in Dubai?
Bright. As long as other countries source products through Dubai, the emirate will continue to supply goods and services to other countries and will remain a vital supplier of produces. Hence, the trade will continue to thrive.