The UAE National Export Community is United and Stronger than Ever
Abu Dhabi ,01 Jul 2020
Since kicking off the Abu Dhabi Exports Office (ADEX) strategic partnership initiative just a few months ago, we’ve had direct conversations with thousands of business leaders from the public and private sector across the UAE. Two very important key learnings have come from those conversations.
First, the UAE export community is primed to lead the COVID-19 economic recovery and far beyond as we look to build the nation’s economy of the future for the next 50.
Second, UAE companies today have unprecedented access to a deep, strong and committed network of export community partners standing at the ready. Exporters can go to global markets today backed by a broad range of innovative and highly valuable strategic products, support services and data to empower and enable them to rapidly expand their international buyer networks.
Through these conversations, we’ve also picked up important insights into perceived challenges, concerns and fears keeping some of our exporters from reaching their full global growth potential. Topping our list of insights is risk of exposure, particularly in today’s uncertain climate. Those risks include perceived high initial investment, barriers to entry into international markets that are still early in the recovery and opening cycle, and limited access to capital to fund transactions at a time when maintaining liquidity is the number one business priority.
While those concerns are understandable, particularly given what our business leaders have endured over the past three months, they can be overcome. The UAE has built a strong and robust national export community support system structured to mitigate those risks through direct export transaction funding and insurance options as well as access to an extensive network of international market data and importer data bases.
Along with our network of strategic partners such as Etihad Credit Insurance (ECI), Abu Dhabi Global Market (ADGM) and Chambers of Commerce and Industry across the emirates, ADEX is working on two fronts. First, we want companies across the UAE to fully understand and embrace the export opportunity for the future of their businesses. From there, we need to unite the national export community to educate all our business leaders to fully understand the broad range of high-impact resources the UAE brings to the table on their behalf.
The case for why an export strategy matters to a company’s immediate economic recovery strategy as well as long-term sustainable business growth is well documented. Having that export strategy in place is particularly significant in a country like the UAE, that despite its relatively small population, roughly 0.13% of the global population, has established an incredibly powerful international brand and is viewed around the world as a highly trusted international trading partner.
There is a plethora of research quantifying the exporter productivity premium, growth and profitability opportunity. One UK study shows that companies who begin to export see a 34% increase in productivity in the first year alone and overall are 59% more productive on average than non-exporting companies. Similarly, a US study showed that SMEs moving into exporting see an average increase in revenue of more than 26% in the first three years and more than 42% within five years.
Research shows that investing in an export strategy actually reduces overall business risk while balancing growth and lowering unit costs through economies of scale. Companies can leverage export strategies to minimize the effects of seasonal fluctuations in sales and better weather economic ups and downs. They are viewed as more innovative, attract more highly skilled employees and stay in business longer.
We need to help UAE companies fully maximize their export opportunity by understanding how to access and leverage the great power and extensive resources of the UAE export community support network. To that end, as part of the ADEX partnership initiative we launched a national exporter education campaign starting with a series of educational workshops with Chambers of Commerce partners in Abu Dhabi, Sharjah and Fujairah as well as jointly with ADGM and ECI that drew more than 2,000 participants. And more workshops are in the planning stage.
Through our strategic alliance with ECI, we are combining a highly complementary suite of financial and insurance products to bring to UAE businesses a full range of credit facilities – direct financing, guarantees and export credit insurance – to help exporters maximize their competitiveness in the global marketplace. ADEX also provides indirect financing options through lines of credit for partner banks overseas to exclusively fund imports from UAE companies.
The UAE and Abu Dhabi Fund for Development invested in the development of ECI and ADEX respectively over the past three years as part of the larger long-term economic diversification and sustainable growth vision. Both groups play unique roles that can help companies safely and securely enter new global markets and add value to overseas buyers that make our exporters more competitive. Together, we directly fund and insure large export transactions from UAE companies while protecting the exporter from risk of non-payment or the kind of extended payment delays that today seriously threaten supply chain cash flow and liquidity.
UAE exporters can access the AED 550 million allocated by ADEX to drive export transactions either directly through ADEX or through a new offering that provides direct loans to overseas buyers to import UAE goods and services that are guaranteed by ECI. We are also working together to explore potential development of new joint products to both stimulate export growth as well as ease supply chain liquidity challenges.
We need to strengthen and expand these collaborative efforts to ensure everything we do across the UAE national export community results in action and impact. Action that directly supports and empowers our export companies to enter new global markets and impact that drives real growth for UAE export companies and expansion of our national export economy.
The export opportunity for UAE companies is very real. It can anchor their COVID-19 business recovery efforts as well as long-term sustainable growth strategies. They can do that with absolute confidence that they are backed by a powerful, diverse national export community support network that is united together behind them and the nation, today as well as for the next 50 and beyond.