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The UAE is rolling out a red carpet to the Russian President Vladmir Putin today, marking a new chapter in the steadily growing bilateral relations between the two countries.
Trade and economic ties between Russia and the UAE have witnessed significant growth under the framework of the comprehensive strategic partnership, which was announced last year. Trade between the two countries reached $3 billion in 2018, rising 21 per cent from the previous year.
"We are very much looking forward to the historic visit of President Vladimir Putin to the UAE. We have seen the strategic relationship grow tremendously under the leadership of HH Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and President Putin. And one of the ways to illustrate this great partnership is through investments," Kirill Dmitriev, CEO of the Russian sovereign wealth fund RDIF, said during a briefing to announce Putin's state visit to the UAE.
Abu Dhabi's state-owned Mubadala Investment Company has been spearheading investments from the UAE into Russia since 2013.
“In 2013, we formed a very good partnership with Mubadala, the sovereign wealth fund of the UAE, and we jointly invested in 45 businesses in Russia. Businesses are absolutely critical for the growth of the Russian economy. Mubadala invested at a critical time for the Russian economy but they got very good returns, probably higher than from any other country," UAE state news agency WAM quoted Dmitriev as saying.
In May 2018, Mubadala had acquired a 44 percent stake worth at least $271 million in an oil subsidiary of gas giant Gazprom. The company, in cooperation with the Russian Fund for Direct Investment (RDIF), also established a joint venture with Gazprom to develop a number of oil fields in the Tomsk and Omsk regions in Western Siberia. According to the UAE Minister of Energy and Industry, Suhail bin Mohammed Faraj Faris Al Mazrouei, Mubadala Petroleum's investments in the Russian oil sector have exceeded $300 million.
Again in 2018, Mubadala Investment Company teamed up with RDIF to take a major stake in Russia’s biggest fitness group.
The consortium took a 22.5 percent stake in Russian Fitness Group, which manages the largest chain of fitness clubs in Russia under the ‘World Class’ brand.
Dmitriev said Russia's investments in the UAE will cover different sectors such as healthcare, technology [especially Artificial Intelligence], oil and gas, and many other fields. "One of our major oil companies has partnered with ADNOC [Abu Dhabi National Oil Company]," he said.
The UAE’s Ministry of Economy stated that non-oil trade between two countries in the past five years reached 51.7 billion UAE dirhams ($14 billion). Moreover, 3,000 Russian companies are currently operating in the country, and more than 1.8 million Russian tourists stayed in the UAE hotels last year, an increase of 37.4 per cent from 2017.
India, China and Russia have been the leading investors in Dubai's real estate sector.
Russia has traditionally been attracted to Dubai for its luxury properties and glamorous communities such as Emirates Hills and the Palm Jumeirah. Though recent numbers are not available, Dubai's low taxes, easy investment options, rental yields and capital appreciation were some of the factors that lured Russian investors to Dubai.
Russia is also keen on catering to UAE's food important demand.
"In addition to real estate, logistics, aviation and energy, Russians have diversified their work in the UAE ... Russia is also looking to increase agricultural and industrial exports to the UAE," the Russian Buinsess Council said in a statement.
"Around Dh900 million worth of agricultural products and foodstuff were exported from Russia to Dubai in 2018, while more than Dh104 million Russian food-related products were re-exported through the emirate. Yet, there is plenty of room to broaden this scope in the future and explore new product categories," Omar Khan, Director of International Offices at the Dubai Chamber said.
In June this year, Russia opened its first Russian Centre for Digital Innovators and Information and Communication Technologies in Dubai’s Internet City (DIC), marking its first official foray into the Middle East’s technology sector.
The ninth Joint UAE-Russia Committee meeting was chaired by the UAE ambassador to Russia and Maxim Sidelnikov, a deputy director at the Ministry of Economic Development of Russia.
UAE's space mission by Hazza Al Mansouri to the International Space Station (ISS) on board a Soyuz rocket is yet another example signifying the growing co-operation between the two countries.
(Reporting by Seban Scaria; editing by Anoop Menon)
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