The UAE becomes one of Russia’s 20 largest trading partners
For the first time, the UAE has become among Russia’s 20 largest foreign economic partners, according to Moscow’s official in 2022, which were announced by Deputy Prime Minister and Minister of Industry Denis Manturov, bringing Abu Dhabi to a record level of trade exchange with Moscow, amounting to $9 billion.
The volume of exports from Russia to the UAE increased by 71%, to $8.5 billion, and imports by 6% to $500 million, making the UAE the first Arab trading partner of Russia.
The record trade jump figures between the two countries came within the framework of a significant increase in the pace of economic cooperation between them over the past years, as the UAE markets host more than 4,000 Russian companies, while it owns 60 projects in Russia.
The UAE is Russia’s largest Gulf trading partner, accounting for 55% of the total Russian-Gulf trade.
It is also the first Arab destination for Russian investments, accounting for 90% of Moscow’s total investments in Arab countries, according to official data.
Last December, the UAE Minister of State for Foreign Trade, Thani bin Ahmed al Zeyoudi, stated that the proportion of non-oil trade between the UAE and Russia increased by 57% in 2022, according to the Emirates News Agency.
The UAE’s adoption of a position of neutrality regarding the Russian invasion of Ukraine represented the major gateway to the trade jump, as Western sanctions put pressure on Russia’s economy after the invasion of Ukraine strongly, and cooperation with the UAE came as a haven to mitigate the impact of sanctions, which had a great impact on the contraction of the Russian economy during the past year only by 2.1% of GDP, which is far below international expectations, according to Bloomberg.
The Russian official expectations indicated that the economy would contract by 3%, while the expectations of many Western analysts revolved around a contraction of 10% at the beginning of the imposition of sanctions on Russia, about a year ago.
In view of this, the economist Anna Swanson considered, in an article published in the New York Times newspaper in early February that Russia’s economy may have already recovered to pre-war levels.
While the International Monetary Fund revised, on February 20, its forecast for the growth of the Russian economy for the year 2023, by 0.3%, in a sharp improvement from its previous estimates of a contraction of 2.3%.
The jump in cooperation between the UAE and Russia is facing an increasing danger, in light of the United States’ tendency to extend the impact of sanctions to countries that provide economic havens for Russia, after Russian President Vladimir Putin celebrated the Russian economy’s figures, which came above the expected contraction expectations.
This extension was explicitly threatened by US Deputy Secretary of the Treasury, Wally Adeyo, by saying that the United States will warn companies directly against evading US sanctions imposed on Russia because of the war in Ukraine.
Addressing officials of countries and companies cooperating with Russia, Adimo added, “You can continue to do things that benefit Moscow and provide it with material support, but then you bear the risk of losing access to the European, American and British economy… This’s your choice”.
The US threat comes at a sensitive time for the UAE, which last year was placed under enhanced oversight by the Financial Action Task Force (FATF), a global anti-money laundering watchdog.
Abu Dhabi’s handling of this financial classification, and the US threat regarding possible sanctions, are major determinants of whether or not the marriage of economic interests between the UAE and Russia will continue.