As part of the UAE’s efforts to enhance long-term economic resilience, the country has unveiled numerous strategic initiatives to support the growth and diversification of export products and markets. Notably, the federal government has stepped up efforts to develop comprehensive economic partnership agreements (CEPAs) with high-potential overseas markets, while supporting manufacturers to enhance their production and trade capacity through initiatives such as the 10×10 programme, Operation 300bn, Make it in the Emirates and the National In-Country Value (ICV) programme. With Abu Dhabi responsible for 49.9% of the UAE’s industrial GDP, these federal efforts hold promise for Abu Dhabi-based manufacturing enterprises seeking to thrive in the evolving economic landscape.
Since 2021 the UAE has made concerted efforts to strengthen international trade relationships and pursued CEPAs with strategically significant partners, such as India, Israel, Indonesia and Turkey. India stands out as a lucrative export market for Abu Dhabi at the emirate level, with the country ranked as its third-largest non-oil export market in 2022, with shipments totalling Dh5.9bn ($1.6bn).
These agreements are expected to provide opportunities for small and medium-sized enterprises (SMEs) to expand their businesses in those markets, catalyse non-oil trade, stimulate investment and fortify bilateral cooperation. A notable hallmark of CEPAs is the removal of tariffs on the exchange of goods and services between the participating countries, effectively dismantling trade barriers.
Looking ahead, the UAE government is aiming to sign 26 CEPAs by 2031. These agreements are expected to support the overarching mission to increase the country’s foreign trade to Dh4trn ($1.1trn) by 2031. In addition to the four CEPAs already in place, the UAE is working to conclude six additional CEPAs by the end of 2023 with Pakistan, South Korea, Thailand, Costa Rica, Vietnam and Chile – further expanding the country’s network of strategic partnerships and reinforcing its commitment to growth and global engagement.
As it seeks to take advantage of the trading environment created by the growing network of CEPAs, the UAE launched the 10×10 programme in September 2021 as part of the Projects of the 50, a series of initiatives aimed at securing the country’s long-term prosperity. The 10×10 programme aims to achieve a 10% annual increase in the UAE’s exports to 10 strategic global markets through to 2030. These markets include China, the UK, the Netherlands, Italy, Russia, Poland, Luxembourg, Australia, New Zealand and Indonesia, underlining the UAE’s commitment to expanding its export horizons.
In collaboration with the Ministry of Industry and Advanced Technology (MoIAT), Etihad Credit Insurance (ECI), the UAE’s national export credit company, introduced a series of incentives to underpin the 10×10 initiative in July 2021. These incentives span financial support to fortify export endeavours, funding for new technology and manufacturing, loan guarantees to facilitate industrial ventures, export and equity insurance tailored for SMEs, and assistance in securing intellectual property rights for start-ups.
In addition to meeting its trade objectives, the 10×10 programme aims to achieve 14% growth in foreign direct investment (FDI) outflows by 2030 and a 24% boost in FDI directed to its target countries by the same year. Notably, at the emirate level, none of the 10 countries targeted in the programme were ranked among Abu Dhabi’s top-five non-oil export markets in 2022, which suggests that there is considerable room for growth as part of the initiative.
To stimulate the manufacture of goods for both domestic and international markets, initiatives have been introduced at both the federal and emirate level to improve local production capacity and add value. Operation 300bn, launched in March 2021, is a comprehensive decade-long federal strategy spearheaded by the MoIAT, designed to enhance the UAE’s industrial growth. The strategic blueprint focuses on ramping up productivity, enhancing local skill sets and fortifying national competitiveness across highvalue subsectors. The overarching goal is to increase the industrial sector’s contribution to GDP from Dh133bn ($36.2bn) in 2021 to Dh300bn ($81.7bn) by 2031. At the same time, the strategy aims to support the creation of 25,000 jobs, nurture 13,500 industrial SMEs, and raise research and development (R&D) spending in the industrial sector from Dh21bn ($5.7bn) to Dh57bn ($15.5bn), or 2% of GDP, by 2031.
In parallel, Emirates Development Bank is a key enabler of this strategy, facilitating access to trade finance and support services with a lending portfolio of Dh30bn ($8.2bn) dedicated to bolstering priority sectors such as manufacturing, infrastructure, technology, health care and food security.
At the emirate level, Abu Dhabi launched its own industrial strategy in July 2022 to align with the national strategy (see Industry & Retail chapter). The Abu Dhabi Industrial Strategy sets forth the emirate’s objectives of doubling the manufacturing industry’s size by 2031, enhancing access to finance and the business environment, and fostering an increase in FDI.
To promote the expansion of both local and international businesses, the Make it in the Emirates initiative was introduced at the federal level to complement Operation 300bn. Among its key goals, Make it in the Emirates supports manufacturing companies through export financing, loan repayment guarantees for SMEs, as well as programmes aimed at safeguarding intellectual property rights for emerging start-ups. The initiative has clear strategic objectives, including harmonising a national brand identity for products made in the UAE, fostering a sense of pride in local production, strengthening the industrial base, elevating product quality standards, promoting diversification across industries and nurturing local talent.
Recognising the pivotal role played by SMEs in the UAE’s economic landscape, the MoIAT has partnered with US consumer goods giant P&G to establish the Make it in the Emirates Lab. This public-private initiative offers corporate training customised for SMEs operating in the industrial sector. SMEs make up approximately 94% of companies in the UAE, with an 11% presence in the industrial sector.
The UAE and Abu Dhabi present an appealing value proposition for international businesses seeking a production base in the Gulf. Notably, the country has reliable sources of energy and raw materials, as well as advanced digital and physical infrastructure. Abu Dhabi, specifically, has the deepwater Khalifa Port and Abu Dhabi International Airport to support exports, as well as a wide network of industrial parks and zones. Moreover, Abu Dhabi is home to the Mohamed bin Zayed University of Artificial Intelligence, the world’s first artificial intelligence university, and Hub71, a globally connected tech start-up ecosystem.
Supply Chain Localisation
The ICV programme is a key federal initiative aimed at enhancing productivity, resilience and sustainability in the UAE’s industrial landscape to promote export growth. Launched in 2018, the programme supports supply chain localisation and redirects government expenditure to domestic suppliers. By strengthening local supply chains, the ICV programme aims to enhance the attractiveness of the country to global manufacturers seeking a production base in the Gulf. Furthermore, aligning with ICV criteria not only earns UAE-based businesses coveted ICV certificates, but also unlocks access to contracts and financial incentives from Emirates Development Bank.
The ICV programme targets include increasing demand for local products and services from Dh33bn ($9bn) to Dh55bn ($15bn); catalysing diversification in local manufacturing capacity; redirecting 50% of public expenditure towards UAE-based companies by 2031; attracting more than $70bn in industrial investment; increasing the industrial sector’s contribution to GDP to 25% by 2025; and promoting the acceleration of R&D endeavours, advanced technology adoption and Industry 4.0 solutions to foster the growth of a hightech, knowledge-based economy. As of September 2023 the programme had seen more than Dh88.5bn ($24.1bn) of procurement funds redirected into the economy, certified more than 5000 local suppliers and generated 2000 skilled jobs in the private sector.
Abu Dhabi-based manufacturers stand to benefit from the numerous federal initiatives unveiled in recent years to support domestic production and export growth. With a robust industrial base, advanced trade infrastructure and complementary strategies at the emirate level, businesses have a solid foundation for expanding into international markets. At the same time, the emirate’s vibrant technology and innovation ecosystem is set to support companies in developing and delivering new technology-based solutions to the global market. This is further aided by a growing network of CEPAs that will facilitate access to goods and services in high-potential markets around the world.