<h6><strong>Eduardo González</strong></h6> <h4><strong>The Minister of Foreign Affairs, José Manuel Albares, received the Minister of Economy of the United Arab Emirates (UAE), Abdullah bin Touq Al Marri, in Madrid this Thursday, with whom he discussed the promotion of bilateral trade and investment between the two countries.</strong></h4> During the meeting, according to the Ministry in a press release, the ministers were able to review the progress made in the Spain-UAE Strategic Partnership, signed in February 2022 by the President of the Government, Pedro Sánchez, and the President of the United Arab Emirates, Mohammed Bin Zayed bin Sultan Al-Nahyian, during an official trip by the Prime Minister to Dubai and Abu Dhabi. Albares also highlighted that the United Arab Emirates is the leading destination for Spanish exports to the Gulf Cooperation Council countries, as well as the second-largest regional supplier and the largest investor in Spain in the energy sector. He welcomed the achievement of "greater balance and dynamism" between sectors of particular importance to both countries, such as infrastructure, transportation, and the development of renewable energy. The two ministers also discussed the UAE's growing participation in the international tourism market and investment efforts in new growth sectors, such as agrotechnology, green hydrogen, and aerospace. Exactly one year ago, the Council of Ministers authorized the signing of the agreement between Spain and the United Arab Emirates for the Reciprocal Promotion and Protection of Investments, which was signed by Pedro Sánchez during the aforementioned official visit to the UAE. During that trip, which was accompanied by Albares, the then Minister of Industry, Trade, and Tourism, Reyes Maroto; and the then Secretary of State for Trade, Xiana Méndez, Sánchez also signed a Memorandum of Understanding (MoU) between Mubadala (Abu Dhabi's large sovereign wealth fund) and COFIDES (the Spanish Development Finance Company) for the joint identification and financing of projects. <h5><strong>Economic Relations</strong></h5> The United Arab Emirates is currently undergoing a process of economic diversification to reduce its dependence on oil, which still generates a third of its GDP. For this reason, its government is particularly interested in attracting foreign investment, which represents a significant opportunity for Spanish companies in sectors such as renewable energy, transportation, air traffic, and tourism. The UAE is the world's third-largest oil producer and has the second-largest GDP in the region, after Saudi Arabia, and the third-largest per capita income (PRC), after Kuwait and Qatar. According to the Foreign Investment Registry, the stock of Spanish investment in the Emirates stood at €2.989 billion as of December 31, 2018 (latest data available), placing the country as the twenty-first destination for Spanish investment. However, gross Spanish investment flows to the Emirates are low (€10.4 million in 2019) due to the impossibility, until recently, of opening wholly Spanish-owned subsidiaries in the Emirates. For this reason, many of the companies operating there have resorted to legal entities (branches or representative offices) that do not require capital outlays, or have opted to open subsidiaries in free trade zones, where they can hold 100 percent ownership but whose scope of operations is limited to that free trade zone. In contrast, Emirati investment in Spain is much more significant. The investment stock in 2018 (latest available figure) reached €5.851 billion, placing the UAE as the thirteenth largest investor in Spain. In 2020, gross Emirati investment in Spain amounted to €64 million. The main Emirati investments in Spain have been made through sovereign wealth funds or private funds, mostly owned by the royal family. By far, the largest Emirati investment in Spain has been in the Spanish Petroleum Company (CEPSA), in which Mubadala Investment Company controls 60% of the capital. Mubadala also controls 3% of the capital of ENAGÁS, valued at market prices at around €160 million, and Dubai Ports World has been the concessionaire for the management of the Port of Tarragona since mid-2008. On the other hand, the trade balance is clearly favorable to Spain. According to 2020 data, the UAE is Spain's thirtieth largest customer and the second largest in the Middle East after Saudi Arabia. Spanish exports are highly diversified: machinery and mechanical equipment, electrical equipment and supplies, vehicles, and perfumes. Imports, on the other hand, are much more concentrated in fuels, aluminum, plastics, aircraft, and electrical equipment and supplies. In 2020, Spanish exports of goods amounted to €1,509.5 million, and imports reached €300.4 million. In 2020, the number of Spanish companies exporting to the UAE reached 5,101, 2,190 of which were regular exporters (exports for four consecutive years).
