The Hottest Spot
in the World
Skyrocketing oil prices are pumping oil dollars into many oil producing Middle East countries, and this region is in abuzz with many gigantic-sized energy, construction and development projects attracting the intense interest from all over the world. A case in focus is Dubai - one of the most dynamic and tempting investment target these days.
Dubai is a sheikdom and part of the United Arab Emirates. The UAE is Korea's second oil supplier next to Saudi Arabia and Korea is the UAE's second biggest partner in terms of imports. And the economic activities between two countries are increasingly vigorous and energetic, and many big projects are underway, for example, Samsung Engineering & Construction is building the Burj Dubai which will be second to none among the tallest skyscrapers in the world with more than 700m high and Hyundai Engineering and Construction is undertaking the dredging and reclamation works in the Palm Deira project and the 700 billion-won power plant project in the UAE.
There is much room for mutual cooperation and synergetic effects between the two countries when they complement each other because the UAE is recognizing its industrial structure in the event of the post-oil age and Korea has strength in terms of manpower and technology, as Prime Minister Lee summed up his recent official trip to the Middle East countries, including the UAE.
The following is the excerpt of the interview with H.E. Abdulla Al-Ma'ainah, Ambassador of the UAE.
Q: Can you summarize the current status of bilateral trade between Korea and the UAE (Trade Balance, Export/Import Items, Ongoing Projects, etc.)?
A: The United Arab Emirates and Korea maintain a close cooperation in trade. Last year the volume of bilateral trade between the two countries totaled $9.877 billion. This year also trade exchange performed perfectly. Available data as of September showed that the volume of trade exchange between the two countries over the past three quarters of the year reached $9.086 billion.
Korean companies performing investments in the UAE as of this year are 23 with the total amount of $29.932 million. The UAE government invests $500 million in Hyundai Oil Refinery in 2001.
Korea imports from the UAE as of September this year totaled $7.067 billion of oil and natural gas and oil products, copper, aluminum while the UAE imported a total of $2.019 billion of different kinds of Korean Products.
Q: How important is the Northeast Asian countries to UAE?
A: Countries like Northeast Asia have no significant domestic oil or gas fields and have to import most of its needs from the oil producing nations including the UAE. The substantial and increasing gap between production potential and consumption in the major nations is the oil security. This resource gap is most pronounced in Northeast Asia. Asia is the largest oil consuming region in the world and oil demand in this region was projected to grow at an average annual rate of 4.0% from 1997 to 2020. Northeast Asian nations are important for marketing oil. Also this region dominates the world in terms of technology production and export.
The Middle East imports most of its needs of products from Northeast Asia. The UAE imports most of his needs from Japan as its first partner and Korea as the second partner. The UAE is the 14th country when it comes to the volume of trade with Korea.
Q: For recent years, the UAE has been pursuing positive and brilliant economic policies which are very impressive. Please outline the yesterday, today and tomorrow of the UAE.
A: Huge achievements have been attained in the United Arab Emirates over the last three decades thanks to the policies pursued by the late President His Highness Sheiks Zayed Bin Sultan Al Nahyan. In a record time the UAE had progressed into all fields to become a model for any modernized country to follow its steps.
Great achievements also continue since His Highness President Sheikh Khalifa Bin Zayed Al Nahyan assumed office last year. The country entered a new phase of development in only one year. The President't objective is to make sure that the rest of the country should not be left behind as the most developed parts surge ahead. This is based on his clear vision of keeping the country in its advanced status among other countries worldwide.
A prosperous future is also promising the UAE. It will also enter new phases of growth and development with the wise policies and strategies of openness and strengthening of relations with all nations around the world. At the national level, it maintains a policy of assuring freedom and dignity for all citizens and providing security and stability for them and for expatriates residing in the country. It also diversified economic sources through the promotion of other non-oil industries and projects.
Q: Could you tell me the outcome of "the Symposium on Korea Middle East Plant Business Cooperation"and "UAE-Korea ICT Business Forum(MOU between ICA & DIC)?A: The forum held in Dubai during the visit of H.E. Lee Hae-chan, Prime Minister of Korea to the UAE. It is attended by senior officials from the UAE and Korea to discuss business opportunities available for Korean companies in the Middle East and similar opportunities available for companies of Middle East and Korea, as well as joint information and communication technology between the two countries.
Q: Please explain the background and outline of the policies the UAE government is pursuing in an effort to promote IT industry and ubiquitous communication infrastructure (Al Ream Project and U-City project)?
A: The UAE government has consistently supported policies to create an atmosphere in which trade and industry can flourish. The government's policies regarding the advancement of information technology have been aimed at encouraging investors to establish their enterprises in the UAE and at assisting local business people. Numerous policies exist that have encouraged foreign investment in the UAE. For example, it is relatively easy to get a residence & work permit. Most countries'citizens can invest in the UAE. There is no restriction on the transfer of funds into or out of the UAE.
Customs relations are minimal, which is also an enticement to foreign firms. A flat rate of 4 percent on imported goods is levied, unless they are being sold directly to the government in which case the transaction is tax-free. No exchange controls or restrictions on repatriation of profits in the UAE are in place. This is very significant because with foreign direct investment inflows come increased technology, as well as increased technology demands.
Q: Would you specify the initiatives the UAE government is offering to Korean companies that are performing or planning business there?
A: The UAE is opening foreign direct investment (FDI) too all countries around the world. Many Korean companies are performing their businesses in different fields in the UAE. We welcome all other Korean companies planning to make investments in the country. The UAE has great investment potentials that can create several partnership opportunities and fruitful cooperation between the two countries. Of course all the fields of investment are available and they are all encouraged to undertake any project of their choice there. The UAE is an attractive land for diverse business. It made all the efforts to make the business environment easy and fruitful for investors. Korean companies will feel the provision of security. They will feel the good performance of the economy year by year. It is also needless to say that they can utilize all the facilities available in the UAE such as the free zone, sea ports and airports for distributing their products to other countries in the region.
Q: What would you suggest to Korean companies who want to participate in the UAE oil and gas projects?
A: Oil and gas reserves in the United Arab Emirates have risen sharply. The UAE is the forth largest country around the world in terms of its reserves either in oil or in gas. It produces about 2.5 million barrel of oil a day. But, the UAE has long pursued the policy of diversifying its economy away from dependence on oil and gas. The hydrocarbons sector in the country shares less than the third
Q: What would you comment as an outlook of bilateral trade between the two countries?
A: Bilateral trade between the United Arab Emirates and Korea is expected to achieve good performance in the coming years. We are convinced that the cornerstone visit by Sheikh Hamdan Bin Zayed Al Nahyan, UAE's Deputy Prime Minister and Minister of State for Foreign Affairs to Korea 2004 accompanied by cabinet ministers, senior officials and businessmen, and the recent visit by Korean Prime Minister Lee Hae-chan to the UAE heading a big delegation will help open new prospects for business opportunities in both countries and encourages business community to establish joint projects which will help promote the close relations between the two countries. As a result, the volume of bilateral trade is expected to expand in the future. nw

A panoramic view of Abu Dhabi, the capital of the United Arab Emirates

Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai, who is also the UAE Vice President and Prime Minister

Abdulla Al-Ma'ainah, ambassador of the UAE to Korea