By Soren Billing
Standard Chartered bullish over country's air and sea infrastructure schemes.
The $26bn worth of air and sea infrastructure projects under development in the UAE will strengthen the country’s position as a logistics hub, a role that may be its biggest asset outside oil, Standard Chartered has said.
Major developments include the Dubai Civil Aviation Authority’s $7bn Dubai World Central airport, the Abu Dhabi Airport Company’s $6.5bn expansion of the capital’s airport, and the Dubai Ports Authority’s $1.6bn expansion of Jebel Ali Port.
“More than a stop-off point, the UAE is becoming a logistics hub serving a vast population basin,” senior economist Philippe Dauba-Pantanacce said in a research note.
While hydrocarbons is likely to remain the country’s predominant GDP contributor in the short to medium term – it accounted for 43 percent of exports in 2008 – developing other economic sectors is seen as crucial to the UAE’s long-term growth.
One third of the world’s population is located within four hours by plane, and the country lies at the crossroads of shipping routes between Europe, Asia, Africa, and the Middle East.
Jebel Ali, the world’s largest man-made harbour and the third largest re-export hub after Singapore and Hong Kong, currently accounts for a third of Dubai’s GDP.
Dauba-Pantanacce said the economic benefits of turning the country into a logistics hub include more firms setting up regional headquarters in the UAE and the meetings, incentives, conferences, and exhibitions (MICE) sector getting a boost.
“Apart from oil, the UAE’s central location on the global map is the other natural asset it can bank on with certainty,” he said.