Why is the UAE showing a keen interest in South Korea?
Looking for unconventional sectors of growth, the UAE and South Korea are vigorously working to enhance the bilateral trade volume. Some of the key areas of mutual interest include energy development, technology, innovation, shipping, and logistics. Even during his last visit to the UAE (in March), South Korean President Moon Jae-in pledged to enhance the common trade and emphasized on increasing direct intra-line air routes between the countries to facilitate trade activities.
According to the WAM’s report, South Korea is Dubai’s eighth largest trade partner in terms of imports and ninth in exports. Non-oil bilateral trade grew by 8% year-on-year to reach $7.47billion in 2017. Out of this, imports accounted for $6 billion of the total value, while exports accounted for $1.2 billion. This number is expected to escalate further in 2018, with the presence of more than 170 Korean businesses operating in Dubai alone.
DAFZA joins hands with DGFEZA
In one of the latest initiatives aimed at increasing bilateral trades, Dubai Airport Freezone Authority (DAFZA) inked a strategic partnership with Daegu Gyeongbuk Free Economic Zone Authority (DGFEZA) in South Korea. The pact will increase collaboration between the two parties and expand bilateral trade between the free zones.
As part of the agreement, DAFZA and DGFEZA will work together to promote mutually beneficial investments and increase levels of knowledge transfer and information sharing on both markets and trade. A major focus of the partnership will be on cooperation within information technology, innovation, cross-border e-commerce, shipping, and logistics.
Dubai’s non-oil trade with South Korea has steadily increased in recent years. South Korea is a major source market for electric and electronic products and machinery that are re-exported through the Emirate to key markets in the region such as Saudi Arabia. South Korea’s Korea Electric Power Corporation (KEPCO) is also the prime contractor for the UAE’s peaceful nuclear energy program.
“This strategic agreement will create new trade and investment opportunities and allow us to showcase our world-class infrastructure and services. We will support South Korean companies interested in Dubai to set up operations and advise them on market conditions and opportunities. Ultimately this will support Dubai’s long-term vision of creating sustainable economic development, a diversified and balanced economy as well as increased foreign investment from key international markets,” said Mohammed Al Zarooni, Director-General of DAFZA.
Out of all business sectors, the energy industry is expected to gain the lion’s share. According to Korea Herald, South Korean firms may soon close deals valued up to $25 billion in UAE energy development projects. The sum will mark a remarkable increase from the $21 billion worth of UAE projects awarded to South Korean firms between 2009 and 2016.
“The fact that they mentioned how much they (UAE) will give us immediately is very exceptional,” the newspaper quoted Cheong Wa Dae, an official from South Korea’s presidential office, as saying in March this year.
Recently, to explore innovative business opportunities, Dubai Chamber of Commerce and Industry organized a forum in association with the Korean International Trade Association.
“Dubai is well-positioned to serve as a strategic gateway for Korean companies that are keen to expand their global footprint and access markets across the Middle East, Africa and Europe,” a local daily quoted Majid Saif Al Ghurair, Chairman of Dubai Chamber, as saying.
Ghurair added that both nations shared many synergies, as economies geared toward trade and foreign direct investment.