Dubai Chamber in cooperation with Economist Intelligence Unit launched a credit report titled, 'A Common Wealth: Building Gulf-CIS ties' which showcases the trade relations in between the countries of the Gulf Co-operation Council (GCC) and the Commonwealth of Independent States (CIS), and highlights the best financial investment chances in key sectors such as aeronautics and logistics, Islamic financing, energy, hospitality, retail and real estate. The credit report was introduced during the first Commonwealth of Independent States Global Business Forum (CIS GBF 2016), being held on February 17 and 18 at the Atlantis, The Palm, Dubai.

On the celebration, His Excellency Hamad Buamim, President and CEO of Dubai Chamber, said the file highlights the major role of Dubai Chamber as a source of details and information for the economic sector to assist develop business environment in Dubai. HE Buamim said Dubai Chamber has been releasing such credit reports regularly to establish a strong pool of information that can support business community in the UAE and the GCC in enhancing their financial investment possibilities in emerging markets.

The report offers substantial insights on the prevailing economic and company environment in the CIS, and analyzes its relations with the GCC countries. A Common Wealth: Building Gulf-CIS ties' file sees significant chances for engagement in CIS area by Gulf-based financiers, particularly in light of the existing diplomatic, cultural and commercial ties as well as the air links developed through low-priced air travel provided by flydubai and Air Arabia, which have actually connected previously unattainable markets in the CIS to the Gulf

The CIS and the Gulf.
'A Common Wealth: Building Gulf-CIS ties' report has actually mentioned that CIS and Gulf areas have experienced significant cooperation in areas of investment defense and double-taxation treaties, a lot of them just recently ratified, to support future commerce. The report has identified Belarus as the most positive CIS nation in establishing industrial treaty relationships with GCC countries, followed by Russia and Uzbekistan. On the GCC side, the UAE and Kuwait have been the most positive, it stated.

The credit report has actually specified that trade flows in between the GCC and the CIS are modest, completing US$ 8 billion in 2014. Almost all of this trade is in between a few nation pairs, generally Saudi Arabia and the UAE with Russia and Ukraine, along with the UAE with Turkmenistan. These five sets of bilateral circulations, both imports and exports, comprised 83 % of total trade between the two regions, the credit report said.

Trade flows are little, there are some motivating trends, including a development rate of 20 % over 5 years during the duration 2010 to 2014, although this followed a sharp fall during the global monetary and financial crisis in 2009, it said. The file mentioned that GCC trade development with Russia was particularly strong, averaging 31 % over five years and 17 % over ten years. Some notable high typical growth rates over the past 5 years are Saudi Arabian exports to Ukraine (up by 90 %), UAE exports to Russia (69 %) and UAE imports from Kazakhstan (45 %), it stated.

Navigating the business environment
The file stated a tough company environment in the CIS has actually restricted the region's financial growth. Although official steps of the business environment, such as the World Bank's 'Ease of Doing Business Index', tape a positive trajectory, the area lags behind possible in some signs that are essential to financiers, such as securing electricity, handling construction licenses and trading throughout borders, it stated.

Aviation and logistics
The report has highlighted the significant function of the UAE's inexpensive airlines as significant ports of the regions. According to the file, Air Arabia has five paths to Armenia, Ukraine, Kazakhstan and Russia, but flydubai is dominant, serving 19 destinations across the CIS. This consists of nine Russian cities not served by other links, such as Kazan, Rostov-on-Don and Yekaterinburg, as well as 10 locations in other CIS countries, consisting of the only connect to Tajikistan and Odessa, Ukraine's fourth-largest city.

As a result of this network, flydubai, combined with onward flights from Emirates, connects lots of CIS countries with the remainder of the world, particularly Africa and South Asia, the report stated. Aside from the set up routes, there are many chartered flights connecting the CIS and the GCC, the report mentioned.

Gulf logistics companies are likewise active in ground transportation, helping with trade flows. The most significant existence is Dubai's DP World in Kazakhstan, where, in a move away from its core marine know-how, the port operator is managing a new freight path aligning ancient Silk Road trading routes with modern demand, linking China to northern Europe, the report stated.

The report has recognized a location of growing interest, the Russian Far East, which is being enhanced by commercial advancement, consisting of melted gas (LNG) export terminals. CIS exporters are interested in the logistical capabilities of the GCC to serve other markets, it said.
Islamic financing

One location of certain interest in the CIS is Islamic financing, considered that the region has an approximated 82 million Muslims, more than two times as lots of as the GCC. Many Central Asian countries have a Muslim bulk, although Russia with 17 million Muslims, who represent just 12 % of its population, has more Muslims than the other countries, with the exception of Uzbekistan.

There has actually been a higher concentrate on Islamic banking over the past couple of years, in part because of a desire to draw in capital from the Gulf. Gulf banks, along with some from Malaysia, have actually played a role in motivating the development of Islamic finance in the CIS, it stated.

Nevertheless, GCC investors remain cautious of CIS debt thinking about that numerous sovereigns and business in the region are ranked well below investment grade, a minimum requirement for GCC sovereign wealth funds. Outside of direct financial investments, there are numerous lessons from the GCC for CIS countries intending to establish their monetary sectors, especially Kazakhstan and Azerbaijan, the report stated.

Energy
According to the report, the hydrocarbons sector lies at the core of a lot of CIS and GCC economies and has actually seen the most engagement in between the two areas. With some Gulf nations facing a shortage of gas to satisfy domestic power need, they are exploring new sources of gas from the CIS region, especially Russia.
Other locations of energy and market have actually likewise just recently seen co-operation in between the GCC and CIS. In particular, the drive to establish nuclear power in Saudi Arabia and the UAE has actually given rise to technical co-operation contracts with Russia's State Atomic Energy Corporation, Rosatom, it pointed out.

Hospitality, retail and property
GCC firms have been active in consumer-facing sectors in the CIS, making use of proficiency from Gulf markets in locations such as hospitality and retail franchises. Many GCC retail firms have actually so far ignored the CIS, concentrating on the Middle East and Africa for growth. Under existing financial scenarios, others are not likely to enter now in time as the depreciation of the Russian rouble and other currencies provides an obstacle for companies selling imported brands, offered minimized regional customer spending power, it said.

In the hospitality sector, Dubai's Jumeirah Group, which currently manages a hotel in Azerbaijan's capital Baku, is developing a brand-new hotel in St Petersburg, which will be its first in Russia. While luxury hotels have set their sights on cities such as Baku and Astana, the wider CIS market might provide chances for other hotel brands. The hospitality sector sees visitors taking a trip from the CIS to the GCC as well, it said.

Dubai, with its network of flight connections throughout Russia and the CIS, is the essential driver of CIS demand for real estate. Data from the Dubai Land Department typically position Russians among the primary foreign buyers of Dubai home. Need has actually been adversely impacted recently by the weak rouble, it said.

Dubai Chamber is hosting the first edition of the Commonwealth of Independent States Global Business Forum under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. Organised under the style, 'Ancient Routes - New Opportunities', the Forum will feature vibrant sessions exploring chances on old trading connect to neighbouring areas and beyond along with new Economic Union Eurasian alliances, and provide a platform for investors to hold meetings and indication bilateral business collaborations and investment agreements between business in various sectors.