EIU: Here’s one area of trade the UAE needs to improve on
The UAE ranks 34th in The Global Illicit Trade Environment Index created by The Economist Intelligence Unit (EIU) and first published in June of this year.
The Index, sponsored by The Transnational Alliance to Combat Illicit, looks at 84 economies across four categories: government policy, supply and demand, transparency and trade and customs environment. The UAE ranks 2nd among the nine economies from the Middle East and Africa covered by the index.
The UAE comes 58th in the transparency and trade category with a score of 44 out of 100. This is largely due to it receiving a score of zero out of two on the FTZ governance indicator, which is a measure of expert perception of the monitoring and oversight of the economy’s free trade zones. It comes 54th in the customs environment category, not far behind Canada and Hong Kong, with a score of 72.
The UAE performs better in the other two categories in the index and especially in supply and demand, where it ranks 3rd overall on the strength of its tax environment.
For the UAE to improve its environment for combatting illicit trade, there are a number of fixes available.
The most important is to improve oversight of its free trade zones, especially Jabal Ali, one of the largest such zones in the world.
It could also add security certification processes to its authorized economic operator programme, bolster the level of automation at customs and sign and ratify the five illicit trade treaties that it hasn’t yet.
Chris Clague, the author of the paper, said: “The UAE, like Singapore and Hong Kong and the world’s other trade and financial hubs, has a responsibility to do more on illicit trade. The UAE doesn’t lack the resources to do what is necessary. It just needs to find the will.”
The index, online data visualization tool and the various reports that are being published can all be found at http://illicittradeindex.eiu.com/.
The 84 economies were selected in order to obtain a representative mix of geographies, population, and level of development.
A full explanation of the index methodology can be found in the appendix of the main report and the recently published paper on the UAE’s results.
The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group.