Interview: Ahmed bin Sulayem
How might a global trade war impact the Dubai Gold & Commodities Exchange, and what strategies exist to mitigate against this risk?
AHMED BIN SULAYEM: Our government sees challenges as opportunities to generate new business. We would love for Dubai to be the intermediary city for business between African countries and China. Around 60% of global re-exports of tea go through Dubai, in part due to the fact that India and China consume most of their own production. It is significant that Dubai is the number one worldwide exporter of this commodity, something that may be credited to factors such as the expansion of the emirate’s ports.
Regarding diamonds, the businesses can operate in Dubai without having to worry about taxes, or about security issues in diamond-producing countries. The UAE government invests heavily in safety and security because it is important that people feel the government cares about creating a healthy business environment. It is one of the most crucial factors investors take into account when choosing one country over another.
Other examples of how seriously the government takes this matter include the announcement of the 10-year visa and the removal of value-added tax on gold and diamonds. The key word is agility. The UAE government is agile and quick to act.
How can Dubai best position itself to benefit from China’s Belt and Road Initiative?
BIN SULAYEM: On a strategic level, the Dubai government had the foresight to connect with the Chinese market well before this initiative was announced, and the two have enjoyed strong diplomatic ties for some time. In a commercial sense, Dubai’s Dragon Mart has been particularly important, and was established specifically with Chinese businesses in mind. There are currently about 1300 companies from China and Hong Kong licensed through DMCC and we have hardly scratched the surface. The Chinese are keen to learn more and to expand internationally. However, although Dubai is the main gateway to the Middle East and the GCC region, there is a risk of being over-confident and relying on this fact to attract people. We must ensure that we retain the interest in this market. This is one of the reasons why we have expanded our Made For Trade Live international roadshow and focused on promoting Dubai in more Chinese cities than ever before.
Following on the success of diamonds, what other commodities do you identify as presenting significant growth opportunities for the emirate?
BIN SULAYEM: Coffee, even though it is the second most-traded commodity in the world, is still not widely traded in Dubai. Tea is covered extensively; however, the GCC is lacking a sizable coffee distribution centre, which constitutes a real opportunity. Given that approximately 80% to 90% of the world’s tea-producing regions also produce coffee, existing networks can be applied to get the ball rolling much faster. Many African tea producers are also seeking to establish their brands at a global level, as a way to compensate for the fact that as yet they do not have a proven track record.
We are currently looking at the possibilities of trading coffee futures in the Dubai exchange and focusing on specialty coffees. Certain challenges exist, however. As is the case with diamonds and tea, there is a wide range of quality, so standardisation – which is important to being able to trade futures – represents the biggest obstacle in this area.
When it comes to diamonds, the financial market currently poses a challenge due to a lack of financing and the threat of over-production. In addition, the growth of the synthetic diamond market is very disconcerting to African companies and governments that are reliant on the diamond industry. Going forward, the Dubai market for jewellery should remain one step ahead and prepared for any changes that could impact the global and regional business environment.
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