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Introduction: Expanding Non-Oil Trade Relationships Between Saudi Arabia, the UAE, and ASEAN

In recent years, the commercial ties between Saudi Arabia, the UAE, and ASEAN nations have evolved significantly. The Asian Development Bank reports that trade between the GCC and ASEAN reached $105 billion in 2020, continuing to grow despite global economic hurdles. Once dominated by hydrocarbons, these relationships have diversified into sports, tourism, FMCG, and manufacturing—aligning with national strategies like Saudi Vision 2030 and UAE Vision 2021 to reduce oil dependency and strengthen trade with emerging regions like ASEAN.

By 2023, trade between the UAE and ASEAN had reached $60 billion, fueled by collaboration in logistics, infrastructure, and agriculture. In Saudi Arabia, the non-oil exports to ASEAN rose 15% over five years, reflecting the growing importance of technology, food security, and consumer goods.

Historical Context and Key Drivers

Historically, trade between Saudi Arabia, the UAE, and ASEAN was primarily centered on oil. For instance, Saudi Aramco supplied over 40% of crude oil imports to Indonesia and Thailand as recently as 2015. However, shifting global trends and national strategies have driven diversification

  • Saudi Vision 2030 aims to cut oil revenues from 87% in 2016 to below 50% by 2030, investing in logistics, tourism, entertainment, and agriculture. By 2022, Saudi petrochemical exports to ASEAN grew 18% annually, with non-oil exports contributing over $20 billion to the economy.
  • UAE Vision 2021 focuses on high-tech industries and digital transformation, with non-oil sectors comprising over 70% of GDP. As ASEAN’s top Gulf trading partner, the UAE’s trade with ASEAN hit a record high in 2023, accounting for 11% of ASEAN’s non-oil trade.

.ASEAN’s Economic Landscape
ASEAN, with over 650 million people and a combined $3 trillion GDP, is a dynamic region marked by steady annual growth of 4-6% in countries like Indonesia, Malaysia, Thailand, and Vietnam. This growth is driven by manufacturing, agricultural exports, and a rising middle class. As the world’s fifth-largest economy, ASEAN plays a key role in global trade across sectors like automobiles, electronics, agriculture, and pharmaceuticals.

Key Non-Oil Sectors Boosting Collaboration

  1. Sports
    The sports industry is a growing driver of Gulf-ASEAN relations, with significant investments in hosting events and infrastructure. Saudi Arabia and the UAE have made themselves international sporting events hubs by investing in global sports.
  • Recent Investments: In 2021, the UAE hosted the Asian Football Confederation (AFC) Champions League, partnering with countries like Thailand and Malaysia. Following this example, Saudi Arabia has invested over $500 million by 2022 in Southeast Asian sports infrastructure, including partnerships in youth athletes training facilities in Indonesia.
  • Esports Expansion: The UAE and ASEAN are capitalizing on the booming esports industry. The UAE hosted the Global Esports Games in 2022, while ASEAN countries like Singapore and Malaysia invested in developing state-of-the-art esports arenas. The Gulf-ASEAN Esports Partnership, launched in 2023, is projected to generate $70 million annually through joint tournaments.
  1. Fast-Moving Consumer Goods (FMCG)
    The FMCG sector is pivotal for the Gulf states and ASEAN nations, driven by ASEAN’s growing consumer base.
  • Key Trade Data: ASEAN’s processed food exports to the Gulf reached $3.8 billion in 2021, led by Malaysia and Thailand. With 15% of Dubai’s re-exports consisting of goods from ASEAN, UAE has become a growing center for FMCG products. The demand for Halal-certified FMCG products is especially lucrative, with Gulf imports surpassing $1.2 billion in 2022.
  • Partnerships: Gulf FMCG leaders like Almarai and Agthia are expanding into Southeast Asia. Almarai collaborates with PT Indofood in Indonesia for dairy production, while UAE-based Agthia focuses on distributing bottled water and packaged foods in the region.
  1. Food and Agriculture
    With limited agricultural land, Gulf nations are increasingly investing in ASEAN’s agricultural sector to ensure food security. Both Saudi Arabia and the UAE are focusing on the critical issue of food security.
  • Investments Figures: Saudi Arabia has increased its overall agricultural investments in Southeast Asia by 20% since 2020. Salic (Saudi Agricultural and Livestock Investment Company) invested $600 million in farmland in Thailand and Vietnam in 2022, for rice and livestock production. The UAE also launched a $400 million joint venture with Malaysia for halal food imports, expected to grow 7% annually.
  • Key Agreements: The Saudi-Malaysian Halal Food Partnership aims to dominate the $2 trillion global halal market, bolstering food security and opening new markets for ASEAN’s agricultural products.
  1. Tourism and Hospitality
    Tourism links between Saudi Arabia, the UAE, and ASEAN are expanding rapidly, leveraging cultural, religious, and luxury tourism between the two regions.
  • Tourism Trends: By 2022, over 1.5 million ASEAN tourists have visited the UAE, with Indonesia and Malaysia as key sources. Saudi Arabia welcomed 350,000 Southeast Asian pilgrims annually for Hajj and Umrah, while Dubai’s Expo 2020 attracted over 100,000 ASEAN visitors.
  • Hospitality Investments: In 2023, the UAE’s Emaar Hospitality Group announced a $500 million investment in luxury hotels in Malaysia and Thailand. Saudi Arabia’s Red Sea Project has also drawn interest from ASEAN investors, including Indonesian developers to co-finance resort projects.

Manufacturing: A Pivotal Sector for Growth

Manufacturing is central to the Gulf’s economic diversification, with ASEAN providing abundant collaboration opportunities.

Saudi Arabia and ASEAN Manufacturing
Under Vision 2030, Saudi Arabia is enhancing its manufacturing capabilities, leveraging ASEAN’s expertise in electronics, automotive, and textiles.

  • Key Figures: In 2021, Saudi Arabia launched a $1 billion joint venture with Vietnamese electronics firms to establish electronics manufacturing plants, projected to create 10,000 jobs in Saudi Arabia by 2025 and increase Vietnam’s electronics exports by 15%. Additionally, Saudi Arabia is investing $500 million in a joint vehicle assembly plant in Riyadh, in partnership with Thailand, set to open in 2024.

UAE’s Manufacturing Expansion in ASEAN
The UAE is strengthening its presence in manufacturing through investments in textiles, pharmaceuticals, and medical devices, building on ASEAN’s robust industry.

  • Textiles: In 2020, the UAE invested $200 million in sustainable textile production facilities in Indonesia, positioning it as a major supplier. This initiative is expected to boost ASEAN-UAE textile trade by 30% by 2025.
  • Pharmaceuticals: In 2023, the UAE secured a $750 million partnership with Singapore and Malaysia to co-produce pharmaceuticals and medical devices with focus on ASEAN’s healthcare needs. It’s anticipated to raise regional exports by 20% within five years.
  • Joint Infrastructure Projects: The UAE’s Khalifa Industrial Zone Abu Dhabi (KIZAD) signed a $300 million deal with Vietnam in 2022 to develop a logistics hub, enhancing goods flow between the UAE and Southeast Asia.

Challenges and Opportunities

While the non-oil trade relationships between Saudi Arabia, the UAE, and ASEAN is expanding, several obstacles must be addressed, alongside significant opportunities for further growth.

Challenges

  • Cultural and Regulatory Hurdles: Differing regulations in Gulf and ASEAN markets can complicate entry and operations for businesses on both sides.
  • Intense Competition: ASEAN attracts investment from major global powers like the U.S., China, and Europe, while Gulf investors contend with rivals in emerging industries such as technology and renewable energy.
  • Distance and Logistics: Despite strong infrastructure, the geographic gap creates logistical challenges, especially for time-sensitive sectors or perishable goods like agriculture and food products.

Opportunities

  • Technology and the Digital Economy: Gulf and ASEAN countries are investing in AI, fintech, and smart cities. For example, in 2023, Saudi Arabia signed an MoU with Indonesia to develop smart city technology in Jakarta and Mecca, bridging both regions’ tech ecosystems.
  • Renewable Energy and Sustainability: With shared sustainability goals, renewable energy collaboration is thriving. Malaysia’s Masdar Solar Project, initiated in 2021, aims to generate 500 MW of clean energy by 2025 with Gulf investments.
  • Education and Knowledge Sharing: Academic partnerships are expanding between Gulf and ASEAN nations. Saudi universities collaborate with Malaysian and Indonesian institutions in agriculture, renewable energy, and tech research, fostering innovation and knowledge transfer for long-term partnerships.

Future Outlook

The non-oil trade relationships between Saudi Arabia, the UAE, and ASEAN is poised for continued growth, driven by mutual goals of diversification and technological progress. By 2030, ASEAN is projected to be one of the Gulf’s largest non-oil trading partners, with key focus areas including manufacturing, technology, and sustainability.

Key Growth Areas

  • Artificial Intelligence and Smart Cities: Gulf projects like Saudi Arabia’s Neom collaborate with ASEAN countries like Singapore on digital governance frameworks, advancing shared tech ambitions.
  • Tourism and Hospitality: Post-pandemic, tourism is expected to surge. Dubai’s Tourism Plan 2025 targets 5 million ASEAN visitors annually, while Saudi Arabia’s Vision 2030 emphasizes religious tourism, drawing millions of pilgrims from Southeast Asia.
  • Agriculture and Food Security: Continued Gulf investments in ASEAN’s agricultural sector are vital. For instance, the 2022 Saudi-Vietnam Rice Deal ensures Saudi Arabia receives 2 million tons of rice annually, bolstering ASEAN’s role in strengthening the Kingdom’s food security.

Conclusion

The non-oil trade relationships between Saudi Arabia,  the UAE, and ASEAN are rapidly diversifying, supported by strategic initiatives like Saudi Vision 2030 and UAE Vision 2021. With growing investments in technology, manufacturing, FMCG, sports, and tourism, these partnerships promise mutual prosperity.

Through shared commitments to sustainability, knowledge transfer, and economic diversification, the Gulf and ASEAN regions are forging a model for successful international collaboration, setting the stage for robust growth in the decades ahead.