Although the global economy is flirting with recession, Dubai is recording strong growth in foreign trade, with imports, exports and re-exports more than doubling in the first six months of this year.
According to a report issued by the statistics department of state-owned corporation Dubai World (DW) on September 7, the emirate's direct foreign trade totaled $80.8bn in the six months ending June 30, a 54.4% increase on the $52.3bn for the first half of 2007.
Imports between January and June rose by 52.7%, hitting $56.1bn, while exports increased by an even higher rate, 59.1%, for a total of $5.47b, the report stated.
The list of Dubai top trading partners reflects a shift in the world economy, away from traditional markets in the West and towards Asia. India and China are currently the emirate's main source of imports, with India also the lead destination for goods exported from Dubai.
Saeed Al Qaizi, DW's director of procurement, contracts and statistics, said the growth reflected the strengthening position of Dubai as a global trading centre.
"Excellent development of infrastructure and reinforcement of its competitive potentials have helped Dubai to become an attractive economic hub for investments in diverse areas," he said in a statement accompanying the release of the figures. "This is clearly reflected in the Statistics Department report, which has been prepared from carefully documented data of the trading activity in the emirate."
Another report issued in late August by the Dubai Chamber of Commerce and Industry (DCCI) also showed the emirate was enjoying an export boom. According to the chamber's report, the value of Dubai's exports and re-exports in the first half of the year amounted to $28.2bn, an increase of 50% over the first six months of 2007.
While the two reports show strong growth in Dubai's foreign trade, the weak state of the US dollar, to which the dirham is pegged, must also be taken into account.
With the US currency losing more than 13% in value over the first half of the year, the cost of imports has been pushed up, which in turn will have had an impact on export and re-export figures. The link to the dollar has also been blamed for contributing to rising inflation in Dubai and the rest of the United Arab Emirates (UAE), with price rises surging to a record 13% in the first half of the year, according to a report by Merrill Lynch issued on September 9.
Even stronger than the overall expansion of Dubai's export trade was the rise in its re-export business, the importing and then re-sale of goods to third countries, the DW report stated, with the re-export trade generating $19.1bn in the first half.
India again headed the list of importers of re-exported material from the emirate, with trade increasing from $2.1bn in the first six months of 2007 to $6bn in the same period of this year.
Iran moved into second place in the list of re-export destinations, with shipments rising by 25.9% for a total value of $2.8bn.
The fact that Iran remains one of the main destinations for re-exported goods from Dubai may concern some, especially in the US. In December 2007, Washington claimed that electronic components re-exported from Dubai to Iran could be used in the production of improvised explosive devices similar to those used against coalition forces in Iraq and Afghanistan.
Dubai rejected allegations of "an alarming lack of oversight" in monitoring re-exported US goods destined for Iran and Syria, made by a senior US Commerce department official, with Dubai Customs issuing a statement saying it had been active in "establishing controls for dual use materials which were in line with internationally approved and accepted lists".
Should Washington increase pressure on Dubai to curb its re-export activities with Iran, the emirate's trade figures could suffer.
Perhaps ironically, the rate of US exports to Iran has boomed during the term of the Bush administration, growing from $8.3m in 2001 to $146m last year, according to US trade data.
It is also significant that Dubai's re-export figures are three and a half times those of its direct export sales. While the emirate has invested heavily to develop indigenous non-oil related industries as it seeks to diversify its economy, it is clear that Dubai has retained its traditional role in the region as a centre of trade and commerce, rather than of production.