Saudi Arabia and UAE set to emerge as global trade hubs, says WEF panel

Saudi Arabia and UAE Poised to Become Global Trade Super-Connectors Amid Disruptions

Saudi Arabia is positioning itself to become a key global trade hub, benefiting from the ongoing global trade disruptions, according to experts at the World Economic Forum in Davos. Henadi Al-Saleh, chair of Agility’s board, emphasized the importance of the Gulf Cooperation Council’s infrastructure investments, particularly in warehouses and key platforms in Saudi Arabia and the Emirates, as critical factors driving this transformation.

In recent years, there has been a significant increase in cargo operations in particular. Al-Saleh stressed that these investments are transforming Saudi Arabia and the UAE into super-connectivity hubs due to increased activity and improved infrastructure. Another important factor is digitalization, which gives companies visibility and clarity in unpredictable times, allowing them to effectively adjust to developments.

Political and socioeconomic issues are disrupting global trade, which is still growing after the pandemic. Experts predict that US trade policies, especially during President Trump’s second term, could worsen the situation by raising trade tariffs on several countries.

However, there are opportunities arising from these disruptions. Chile’s Foreign Minister, Alberto van Klaveren, pointed out that some economies, such as the UAE, are opening up new markets. Chile has signed a Comprehensive Economic Partnership Agreement (CEPA) with the Emirates and is keen on exploring similar agreements with Saudi Arabia.

Despite these obstacles, experts warned that disruptions could have an impact on the global energy transition, especially in the green energy sector. While acknowledging that trade disruptions could hurt some companies and technologies in this market, Al-Saleh stressed the value of long-term planning, without temporary tariffs, and the private sector’s contribution to the advancement of green energy.

In conclusion, Al-Saleh stressed the value of adaptability and resilience in international trade. Despite trade disruptions, he said, countries’ economies will continue to depend on imports and exports. Diversification and technology investment are crucial to overcoming barriers, in order to ensure a strong and resilient global trade infrastructure.