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The Biden Administration has prioritized efforts on ‘Climate Diplomacy’ since taking office in January 2021. Decarbonization, sustainability, and clean energy are top-tiered areas of focus as we enter a new era of U.S. leadership and global engagement. The United Arab Emirates (UAE) has established itself as a leader through its response to climate change using cutting-edge technologies to curb emissions, improve energy efficiency, and deploy new sources of clean energy. In recognition of a shared commitment to addressing the challenge of climate change, U.S. Special Presidential Envoy for Climate John Kerry traveled to the UAE in April to meet with UAE’s own Special Envoy for Climate Change, H.E. Dr. Sultan Al Jaber, and to take part in their regional climate dialogue.
At the U.S. Chamber, we are encouraged by this bilateral cooperation on the climate change challenge. In fact, it is one of four key areas we encourage the Biden Administration to focus on in their strategic engagement with the UAE. In early June, the Chamber hosted the UAE Ministry of Climate Change and Environment for a virtual event to better understand their goals and to hear from U.S. companies doing business there. The clear takeaway from the discussion is that to achieve sustained progress it will require government and the private sector working together. And, this holds true in the other three areas we recommend the Biden Administration focus its attention when it comes to the UAE: digital transformation, financial sector innovation and healthcare.
To help inform the areas of significant opportunity in the UAE, the U.S. Chamber proposes 4 objectives and recommendations for the Biden Administration to consider:
Objective #1: Focus on Innovations in Sustainability, Decarbonization and Clean Energy
Renewable Energy and sustainability initiatives are at the heart of the UAE’s Vision 2021. The UAE’s commitment to expanding low-carbon technologies and investing in renewable and nuclear power serves two purposes: to diversify its economy and enhance sustainability in the Middle East. This aggressive clean energy agenda positioned the UAE as a leader in the region when it comes to tacking climate change. Abu Dhabi is home to three state-of-the-art projects that bring green initiatives to the forefront of the UAE’s energy sector: Masdar City, a hub for research and development on greener and more sustainable urban living; Noor Energy, the world’s largest single-site solar project; and Barakah nuclear plant, the first nuclear power station on the Arabian Peninsula.
Recommendation: The U.S. Chamber recommends establishing an annual U.S.-UAE Green Economic Summit that will serve as a permanent platform to bring together government and business leaders and other stakeholders for high-level discussions to advance mutually agreed to goals in mitigating climate change. The Summit will be supported by efforts throughout the year to enhance public and private sector cooperation in a range of areas, including sustainability, renewable energy, energy efficiency, carbon capture utilization and storage, food security, and climate change research initiatives.
Objective #2: Institute a U.S.-UAE Digital Trade Dialogue with Private Sector Input
While the pandemic may have accelerated the adoption of digital technologies throughout the region, the truth is that the UAE was already a leader in the transformation to a digital economy. Dating back to 2000, the UAE launched Dubai Internet City (DIC) for ICT companies to set up offices, followed soon after by the eGoverment and eDirham. The UAE government ambitiously realized the potential of digitization and embraced Industry 4.0 as the next industrial revolution based on digital transformation. Placing the focus on new digital programs and the ICT sector, the UAE government is better equipped to address the growing needs of its ever-changing population through both the public and private sectors.
Recommendation: The U.S. Chamber proposes launching a U.S.-UAE Digital Trade Dialogue to foster sustained discussions between our governments on best practices, policy objectives, and investment protocols. We also want to ensure the private sector is at the table and part of the dialogue to provide constructive input as the UAE develops policies and regulations that will impact its digital economy.
Objective #3: Foster Greater Cooperation in Innovation of Financial Services and Products
The UAE has positioned itself as a global financial center alongside other leaders, such as New York, Hong Kong and London. At the core of UAE’s growth in the financial sector is a focus on fintech, digital assets and as seen in other sectors, digitization. Financial technology has taken off exponentially in the UAE, led by a tech-savvy population, financial free zones and a government mindset keen to explore the most recent innovations in the fintech sector.
Recommendation: Under the umbrella of the U.S.-UAE Economic Policy Dialogue, U.S. Chamber encourages establishing a U.S.-UAE Financial Innovation Partnership to enhance bilateral engagement on emerging trends in financial services innovation by engaging the private sector and focusing on regulatory cooperation. The goal of the Partnership is to promote innovation in financial services and products to drive growth and capital formation and orderly and efficient markets in both nations. Through the Partnership, key government authorities and the private sector should hold regular discussions and work closely together to address regulatory challenges and share best practices.
Objective #4: Build a Long-Term U.S.-UAE Health Partnership
World-class healthcare is a key priority in the UAE’s Vision 2021 and will remain a key area of opportunity and growth as is evident by the accelerated innovation experienced during the pandemic. A shift to digital technologies played a vital role in the response to the Covid-19 pandemic. While digitization in the healthcare sector has made strides, it will play a much larger role and continue to grow long after the pandemic.
Recommendation: The U.S. Chamber proposes creating a U.S.-UAE Health Dialogue on the sidelines of Arab Health to deepen and expand the bilateral healthcare partnership. The Dialogue bring together government officials and business leaders and associations to meet and substantively engage in policy and regulatory issues affecting R&D and clinical trials, access to new medicines, therapies and technologies, intellectual property, health data and many other topics.
The UAE has been the top market in the Middle East for U.S. exports since 2009. In essence, American companies are already pushing on an open door of boundless opportunities. To do better and build on the existing momentum in these areas of opportunity, the business community and both the U.S. and UAE governments must work together to develop a forward-looking policy environment that fosters innovation, encourages investment, and fuels the economic transformation the UAE aspires to achieve.