Abu Dhabi: A new initiative between the UAE and Japan is expected to boost SME contribution to the UAE’S gross domestic product (GDP), according to the UAE economy minister.
Japan and the UAE on Sunday launched a new SME (small and medium enterprise) platform to promote this vital sector of the economy. This is the first SME platform by Japan in the Middle East.
“We are taking the relationship to another dimension through SMEs,” said Sultan Bin Saeed Al Mansouri during an event in Abu Dhabi.
“Currently, SME contributes about 60 to 65 per cent to UAE’s GDP and we are targeting about 90 per cent,” he said without giving a specific timeline for achieving that target.
Al Mansouri also emphasised the strong relationship between the UAE and Japan saying that there is a lot of trust on both sides at all levels - political, social and economic.
The UAE is the second largest exporter of oil to Japan. Non-oil trade between the two countries stands at around $15 billion (Dh55 billion).
“This is likely to grow further with SME participation and SME cooperation. We have identified the roadmap,” Al Mansouri said.
He further pointed out that there are more than 450,000 SMEs in the country, and that the national target is to raise the share of SMEs in the UAE’s GDP to 70 per cent by 2021.
The launch of the UAE-Japan SME platform in the UAE aims to offer a wide range of opportunities for the private sector and entrepreneurs of the partner countries, especially in the fields of innovation and high technology which he referred to as among the top priorities of the national vision’s approach to development, Al Mansouri said.
A number of Japanese companies are investing in the UAE in various sectors including oil and gas, construction among others.
Japan Oil Development Company (Jodco) holds 12 per cent stake in Abu Dhabi Marine Operating Company (Adma-Opco) and Zakum Development Company (Zadco) which will be integrated into a single entity by early 2018.
Inpex, the parent company of Jodco also has a five per cent participating interest of concession to develop Abu Dhabi’s onshore oilfields for forty years.
Hiroshige Seko, Minister of Economy, Trade and Industry of Japan said the UAE is an important partner and trade between the two countries reached 32.4 billion yen in 2016, which is four times higher than the previous year.
“UAE-Japan SME platform will attract more Japanese businesses and entrepreneurs to the UAE, which will in turn deepen economic and trade partnerships between the two countries and open wider investment horizons within the coming years,” Al Mansouri said.
The two sides also signed a Memorandum of Understanding (MoU) to enhance trade and investment in the SME sector.
Factbox: UAE economy to grow in 2018
The UAE economy is expected to grow about 3 per cent this year, the UAE Economy Minister Sultan Bin Saeed Al Mansouri said on Sunday, further expressing optimism about the growth of the economy in 2018.
“It all depends on the political situation worldwide and also how the recovery of major economies is such as US, EU and China. They are moving in the positive side,” he said.
He added that some new IPOs (initial public offerings) may hit the market by the end of this year and that next year will be an active one as a number of companies are submitting for evaluation.