The UAE betting on gold to reduce its dependence on oil
The United Arab Emirates has launched a project to promote the gold business in its territory and become an international trading centre for precious metals. The objective is to take advantage of its privileged geographical location and its experience and infrastructure as a business centre to increase the importance of gold in its economy and reduce dependence on oil.
According to a statement issued by the Minister of the Economy of the United Arab Emirates, the country currently accounts for 11% of global gold exports. The report highlights the Government’s strategy to develop the precious metal trade sector, following international practices.
To develop this business, the Ministerial Development Council has launched a new policy for the gold sector, aiming to standardize the country’s metal trade with the best international practices.
This policy comprises four main initiatives. It aims to establish an Emirates standard for bullion in the London Bullion Market Association (LBMA) style. Besides, developing a federal platform for the gold trade; establishing a committee to regulate the precious metal market in the Emirates, and to set up a database in which all companies and individuals participating in the gold trade will be registered.
Abdulla Bin Touq Al Marri, the Minister of the economy of UAE, states that the new policy will strengthen the UAE’s position as a leading center for the global gold trade. On the other hand, it will maximize the sector’s contribution to non-gross Domestic Product from oil, and lead the national economic growth.
UAE represents a desirable destination for precious metals’ international trade
Among the advantages that the United Arab Emirates have to position themselves as an influential player იn the global gold business, the Minister of Economy cited its strategic location. This business environment attracts investors.
Thani bin Ahmed Al Zeyoudi, Minister of Foreign Trade, pointed out that the Emirates represent a leading and very attractive destination for gold and precious metals’ international trade.
At present, gold represents more than 29% of total national exports not related to oil and enjoys a significant share in the country’s commercial activities abroad.
Despite the challenges posed by the pandemic in international trade, gold has contributed to the 6% increase in exports from the United Arab Emirates between January and August 2020 compared to the same period in 2019. During July and August 2020, the growth of gold exports in terms of value and quantity grew by 84% and 38% respectively, compared to the same months last year, Al Zeyoudi said.
The Government of the United Arab Emirates aims to diversify its economy, reducing its dependence on oil. In the first months of the pandemic, the black gold prices plummeted to record lows.
