Spain to increase Foreign Direct Investment in the UAE

Infrastructure development could be the priority
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PHOTO WAM  -   Arancha González Laya, Spanish Minister of Foreign Affairs, European Union and Cooperation, in her meeting with Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, on 8 February 2021

Last Sunday, the Spanish Secretary of State for Trade, Xiana Méndez, travelled to the United Arab Emirates (UAE) for the first time. One of the reasons for the visit was the celebration of the Spain Business Meeting that was to be held last year but the pandemic forced it to be postponed. 

According to the head of the Spanish Trade Office in the UAE, Andrés Salinero, who organised the event, there are currently 8,000 Spanish companies exporting to the Gulf country. 

Méndez's first visit was to the opening of the Gulfood 2020 culinary fair, which will remain open until 25 February at the Dubai World Trade Center. The event is attended by 2,500 companies from 85 countries, 50 of which are Spanish, including some of the most prominent brands in the food sector. 

She then held a meeting with her Emirati counterpart, Thani bin Ahmed al-Zayoudi, and met with executives from the Spanish Business Council, an organisation that brings together Spanish companies established there.

Another of the Secretary of State for Trade's most important visits was to the Spanish pavilion at Expo Dubai 2020, which will be held in the second half of this year. 

In the country's capital, Abu Dhabi, she attended an event related to Spanish companies collaborating in the IDEX NAVDEX defence fair. Méndez said she was "impressed by the quality of the products and services presented". 

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PHOTO/REUTERS - Abu Dhabi's Khalifa Port, there are currently 8,000 Spanish companies exporting to the Gulf country
Increasing Foreign Direct Investment (FDI)

Currently, FDI from the UAE in Spain (6 billion euros) is double that of Spain in the UAE (3 billion). In an interview given by Xiana Méndez to the Emirati news agency WAM, she announced that they are studying the possibility of increasing this amount. 

"There is a lot we can do to boost Spanish investment here in the Emirates. Although these figures (3 billion) are impressive and important, especially because it has increased in recent years, we can still do more. There is room for improvement," she said.

Spanish investments in the UAE are focused on activities related to agribusiness, while Emirati investments in Spain are focused on strategic sectors such as renewable energy and mining. 

"I think we can do more and better and also diversify the scope of the sectors that receive these investments (in Spain)", Méndez said.

The secretary of state used the interview to reveal that Spain has begun talks with the UAE to sign a bilateral investment protection agreement that will further enhance the flow between the two countries. 

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PHOTO/WAM - Xiana Méndez, Secretary of State for Trade of Spain

“Hay mucho interés de ambas partes en tener este marco institucional para impulsar la inversión extranjera directa en ambas direcciones”, explicó.

"There is a lot of interest on both sides to have this institutional framework to boost foreign direct investment in both directions," she said.

Infrastructure development would be one of the sectors in which Spain wants to increase its presence. When asked about this, Méndez assured that priority would be given to projects related to sustainable mobility, renewable energies, water and waste treatment. 

Méndez's visit comes just two weeks after the Minister of Foreign Affairs, European Union and Cooperation visited several Gulf countries, including the UAE, at the beginning of the month. 

On her tour, González Laya offered these countries to jointly invest in high-value technological, green economy and digitalisation projects. He also explored investments by Spanish companies in line with the construction of the AVE from Medina to Mecca and the Riyadh and Doha metros. 

The Emirati authorities showed the minister their interest in investing in some of the projects of the Spanish recovery plan financed with European funds to relaunch the economy after the health crisis. 

For this reason, González Laya met with Khaldoun Mubarak, head of the Mubadala investment fund, which is interested in investing long-term in the energy, aerospace, ICT, agribusiness and mining industries, in line with the European funds' objectives of ecological transition and digital transformation. In particular, they have their sights set on building a green hydrogen plant and introducing artificial intelligence in food safety.

On the cultural front, the Foreign Minister, like Méndez, visited the Spanish pavilion at the Dubai Expo, and also had the opportunity to see first-hand one of the stadiums being built for the 2022 World Cup to be held in Qatar.