The ongoing coronavirus pandemic will likely be a catalyst for Dubai and the UAE to diversify its supply chain beyond China, with which it has been largely reliant, according to a senior official from the Dubai Future Foundation (DFF).
At the moment, China is the UAE’s leading trade partner, accounting for more than 9 percent of the UAE’s non-oil trade.
According to Peter Noack, the DFF’s executive director for future foresight and imagination, the Covid-19 pandemic and supply chain disruptions from China may lead to the UAE and other countries re-assessing the diversify of its suppliers and trade partners.
“Places like Dubai have been very successful at diversifying in terms of their generation of GDP,” he told Arabian Business. “But what this crisis has highlighted is that there is still a reliance on a single supplier.”
“Going forward, having lived through the stark isolation, there will be a greater segmentation of supply chains and supply countries,” he added. “The question is how quickly we move from a single country supplier to lots of different countries, which may be closer to target importers.”
Noack added that he believes discussions about diversifying the UAE’s supply chain are already taking place.
“If not, they should be happening,” he added. “There is an opportunity right now for countries and communities to, in a sense, fill the void this situation has created.”
Additionally, newly released research from the DFF suggests that the Covid-19 may ultimately lead to the development of further domestic and manufacturing during and after the crisis.
“We might see production and manufacturing centres pop up in the region, in countries that were not customarily manufacturers,” he said.
Noack added that Dubai’s ports of entry – such as Jebel Ali and Dubai International Airport – will be “critical” if this happens.
“They will likely play the role of storage centres, and not just distribution centres,” he explained. “There will be a whole re-assessment of where we import from, how long it takes, and long we can store what we need for our immediate survival and also for production lines.”
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