{"id":658305,"date":"2026-05-09T14:27:11","date_gmt":"2026-05-09T14:27:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/658305\/"},"modified":"2026-05-09T14:27:11","modified_gmt":"2026-05-09T14:27:11","slug":"the-iran-war-did-not-create-the-uaes-industrial-push-but-accelerated-it","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/658305\/","title":{"rendered":"The Iran war did not create the UAE’s industrial push but accelerated it"},"content":{"rendered":"

Regional conflicts have a way of exposing what economic policy really means. When shipping routes are disrupted<\/a>, supply chains become more expensive, households begin to think differently about savings and security, and companies about investment, the question for governments is no longer simply how to grow. It is how to grow with resilience.<\/p>\n

This is the right lens through which to understand Make it in the Emirates. The UAE\u2019s industrial push<\/a> was not born out of the current conflict, nor is it an attempt to build a closed economy. The Iran war may have accelerated the logic of localisation, but it did not create it. The deeper case is economic and strategic: the UAE is moving from diversification by attraction to diversification by production.<\/p>\n

For three decades, the country\u2019s economic model has been built on openness. It attracted people, capital, companies and ideas. That model remains central. The UAE ranked among the world\u2019s top destinations for foreign direct investment in 2024, attracting more than $45 billion and ranking tenth globally. A dynamic economy, however, cannot rely solely on being a platform for other people\u2019s production. And the UAE has decided to deepen what it makes<\/a>, exports and accumulates at home.<\/p>\n

\"\"<\/p>\n

UAE ministers pledge to take energy, trade and defence to the next level<\/p>\n

Recent figures suggest that this strategy is already changing the economic structure. The industrial sector\u2019s contribution has reached Dh200 billion ($54.45 billion), while industrial exports climbed to Dh262 billion, including Dh92 billion in advanced industrial exports, evidence of a deeper production base. To reach Dh300 billion by 2031<\/a> as per Operation 300bn, the sector is required to grow by 7 per cent annually.<\/p>\n

This matters for a small open economy like the UAE. Bad localisation policies try to replace imports at any cost. Good industrial policy asks a more disciplined question: which sectors create resilience, productivity and export value? The challenge is to build reliable capacity where domestic production strengthens the wider economy, rather than trying to manufacture everything<\/a>.<\/p>\n

Economic theory helps explain why. Manufacturing sits at the centre of input-output linkages. A factory does not produce a final good only. It also demands logistics, finance, maintenance, software, packaging, energy, services and skilled labour. When final demand rises in manufacturing, it pulls intermediate inputs from other sectors. This creates direct and indirect multiplier effects across the economy.<\/p>\n

The second mechanism is more powerful: productive knowledge. Economic complexity theory argues that countries grow richer by accumulating capabilities that allow them to produce more diverse and sophisticated goods. Complex products, from machinery and chemicals to electronics and advanced materials, require networks of skills, suppliers, standards and institutions. The value lies in what today\u2019s export base makes possible tomorrow, beyond the immediate value of current exports.<\/p>\n

This is where the UAE\u2019s industrial push becomes even more strategically important. The country already has world-class logistics, infrastructure, ports and sovereign investors. Entities such as Adnoc, Mubadala, DP World and Emirates Global Aluminium have helped create industrial depth<\/a>, while free zones and trade agreements give manufacturers access to external markets. The goal is to become a more valuable node within the global economy while remaining open and connected.<\/p>\n

Industrial policy, however, carries inefficiency risks if it turns into blanket protection permanent subsidy, or localisation for its own sake<\/p>\n

The regional conflict has reminded consumers, businesses and governments that country-of-origin matters. People want continuity of supply, companies trusted platforms, and governments critical capacity in food, pharmaceuticals, energy technologies and defence-adjacent supply chains. This is not self-sufficiency in the old sense. It is strategic redundancy<\/a>.<\/p>\n

Industrial policy also works through trust, reputation and domestic demand. UAE residents increasingly prefer \u201cMade in the UAE\u201d products, driven by perceptions of high quality, strict hygiene standards and a desire to support the local economy.<\/p>\n

Moreover, industrial capacity is increasingly linked to food security, trusted suppliers, local product availability, route diversification and supply chain resilience. The Ministry of Economy and Tourism\u2019s work on essential goods, market monitoring and local supply channels fits this logic: more dependable markets in crises, while preserving private initiative and competition.<\/p>\n

Decarbonisation<\/a> would be expected to sit at the centre of this industrial agenda. The key question is what kind of manufacturing the UAE should scale. The strongest industrial base will support the energy transition through low-carbon materials, clean technologies, green logistics, water efficiency, waste reduction and circular economy models.<\/p>\n

Industrial policy, however, carries inefficiency risks if it turns into blanket protection permanent subsidy, or localisation for its own sake. South Korea offers a useful lesson as a reminder that successful industrial transformation requires discipline. Its rise was built on targeted direction, export discipline and capability building. The goal for the UAE is clear: making policy that focuses on the creation of businesses that can compete, export, innovate and stand on their own.<\/p>\n

The policy implications are clear, too. First is ensuring localisation remains selective. Instead of pursuing every product category, the UAE seeks to focus on sectors where resilience and comparative advantage meet.<\/p>\n

Second is creating incentives that reward performance. Financing, procurement and in-country value programmes would do well to be linked to productivity, exports, technology adoption and supplier development.<\/p>\n

Third, future competitiveness will increasingly depend on treating sustainability as part of industrial policy. Manufacturing capacity built today could support energy efficiency, waste reduction and the low-carbon transition.<\/p>\n

Fourth, keeping its openness. The strongest version of Make it in the Emirates is \u201cmake it in the Emirates for the region and the world\u201d.<\/p>\n

The conflict in the Gulf may have accelerated the urgency but the logic is deeper and more durable. The UAE is entering a phase where diversification will be measured by what the country can build, scale and export from within.<\/p>\n","protected":false},"excerpt":{"rendered":"Regional conflicts have a way of exposing what economic policy really means. When shipping routes are disrupted, supply…\n","protected":false},"author":2,"featured_media":658306,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,927,121645,1320,15797],"class_list":["post-658305","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy","tag-opinion","tag-opinion-team","tag-story","tag-uae"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/658305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=658305"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/658305\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/658306"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=658305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=658305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=658305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}