UAE seeks to bolster economic, investment ties with South Korea

The UAE and South Korea have explored ways to strengthen economic and investment cooperation to promote entrepreneurship and support small and medium enterprises (SMEs) in the two countries’ markets.

The two countries agreed on new plans in the field of entrepreneurship, including programs and facilities to foster startup growth, enhance investments and facilitate exports to new markets at a bilateral meeting held between Abdullah bin Touq Al Marri, UAE’s Minister of Economy and Lee Young, South Korea’s Minister of SMEs and Startups.

Bin Touq and Young discussed ways to incentivise and encourage SME owners and entrepreneurs to invest in the emerging sectors of the economy to enhance their contribution to GDP growth.

“The UAE is South Korea’s second-largest trade partner in the GCC and the Arab regions as of 2022. The UAE-Korean non-oil foreign trade totalled $917m (Dhs3.4bn) in the first two months of 2023, up 9 per cent from the previous year,” Bin Touq said, adding that the volume of our non-oil trade exchanges totalled Dhs19.5bn, in 2022, reflecting a 14 per cent year-on-year increase.

The UAE’s SME sector plays a pivotal role in driving national economic growth and ensuring its sustainability. Small enterprises contributed approximately 63 per cent to the country’s GDP, exceeding Dhs734bn in 2020.

Twitter En #UAE and #SouthKorea discuss enhancing economic and investment cooperation and new mechanisms to drive startup growth in both countries at the #KoreanBusinessDay in the Middle East 2023′ event. #MoEc pic.twitter.com/WYGP6bjfoQ

— Ministry of Economy – UAE (@Economyae) June 12, 2023

SMEs make up 94 per cent of the total private sector companies operating in the UAE, with a staggering 557,000 companies. The UAE’s Ministry of Economy aims to increase this number to one million by 2030.

The SMEs sector accounts for 86 per cent of private sector employment, which underscores their significance and remarkable contribution to employment creation across various economic and commercial sectors.

South Korea extended a special invitation to the UAE to participate in “2023 COMEUP”, the largest entrepreneurship and startups event in the country, which is scheduled to take place from November 8 to 10, 2023.

The UAE recently unveiled plans to invest approximately Dhs110bn in South Korea over the next few years. UAE’s investments in South Korea are concentrated in several key sectors such as industry, trade, shipping, communications, real estate, and commerce.

Meanwhile, South Korean FDI in the UAE reached approximately Dhs8.1bn as of early 2021, marking a remarkable growth of 73 per cent since the beginning of 2013.

UAE expands trade corridors

Meanwhile, the UAE has so far concluded five Comprehensive Economic Partnership Agreements (CEPA) with India, Israel, Indonesia, Turkey and Cambodia, and the first two have already come into force. The country is currently in talks with more markets of strategic importance at the regional and global levels to establish similar agreements.

The UAE agreed to start preliminary negotiations on a bilateral trade deal with Costa Rica, Thailand, Malaysia and Vietnam.

Earlier in June, the UAE and Cambodia signed a CEPA agreement that is expected to more than double non-oil bilateral trade from $407m in 2022 to $1bn within five years.

The World Trade Organisation’s (WTO) Global Trade Outlook and Statistics Report 2022, said that the UAE’s trade in goods with the rest of the world hit $1.024tn in 2022, as the share of both exports and imports increased on the back of higher oil prices.

Read: UAE signs bilateral trade deal with Cambodia