Etihad doubles flights as GCC-Thailand trade blossoms

March 22, 2023, 5:53 AM

Etihad is taking advantage of the demand for travel to Bangkok

UAE and Thailand joint business council bearing fruit
GCC-emerging Asia trade predicted to be $578bn by 2030
Saudi Arabia also strengthening ties to boost trade

Etihad Airways will double the number of its flights to Bangkok on Sunday, reflecting a growing trade relationship between the UAE and Thailand that was valued at more than $6 billion last year.

The Abu Dhabi-based airline will fly twice a day to the Thai capital, signalling the latest commitment of both governments to strengthen bilateral ties.

Last month a UAE-Thai business forum witnessed the launch of the first joint business council held in Sharjah, which coincided with a visit from a high-level Thai delegation led by Jurin Laksanawisit, minister of commerce.

The business council aims to enhance joint co-operation and increase trade and investment between the UAE and Thailand, southeast Asia’s second-largest economy.

Asia House, an independent think tank, estimates that GCC trade with emerging Asia – which includes Thailand as well as 33 other economies – will surpass the region’s deals with advanced economies by 2028 if current growth rates are maintained, and will be worth $578 billion by 2030.

Thani bin Ahmed Al Zeyoudi, the Emirati minister of state for foreign trade, said the UAE and Thailand shared “strong, continuously developing economic relations” across sectors such as real estate, tourism, industry, hospitality, food security, agriculture, renewable energy, technology, logistics and healthcare.

In 2022 the UAE was Thailand’s largest trading partner in the Arab world.

Non-oil trade between the two countries reached $6.1 billion, a year-on-year increase of 21 percent.

Al Zeyoudi added that the UAE’s direct foreign investments in Thailand reached $300 million by the end of the third quarter of 2022, accounting for 52 percent of all investments from the Middle East. Thailand’s direct investments in the UAE were valued at $84 million by the end of last year.

“This lays a solid foundation for future, more prosperous economic partnerships,” Al Zeyoudi said.

During his visit in February, Laksanawisit said the business forum marked a “step forward in enhancing economic ties” between Thailand and the UAE and was an effective way to establish joint investment projects.

He said the setting up of an official business platform endorsed by both governments would generate $890 million of revenue for Thailand.

Dubai is seen by Thai businesses as a staging post to access markets across the six GCC nations – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the wider UAE.

About 18 small and medium-sized Thai-based firms currently operate in Dubai, including SCG International Middle East Trading, Perfect Companion Trading and Little Bangkok and Siam restaurants.

Deputy prime minister Wissanu Kreu-Ngam visited Abu Dhabi last year and highlighted the potential of enhanced cooperation with the UAE in the field of food security and agriculture.

“Thailand as one of the world’s leading food producers and exporters stands ready to render our full support to the UAE to achieve its goals of ensuring sufficient food supplies and implementing resilient agricultural practices that increase productivity and production,” he said in comments published by state news agency Wam.

He also mentioned technology and innovation, infrastructure and property development and financial services as areas of “untapped potential”.

But it is not just the UAE that Thailand is focusing on.

Saudi Crown Prince Mohammed bin Salman meets Thailand's Prime Minister Prayut Chan-o-cha at Government House in Bangkok during the Asia-Pacific Economic Cooperation summit in November. Picture: Reuters/Lillian Suwanrumpha — Saudi Crown Prince Mohammed bin Salman meets the prime minister of Thailand, Prayut Chan-ocha, at Government House in Bangkok during the Asia-Pacific Economic Cooperation summit in November. Picture: Reuters/Lillian Suwanrumpha

In November Saudi Crown Prince Mohammed bin Salman and Prayuth Chan-ocha, Thailand’s prime minister, signed agreements to increase trade and investment, as well as promoting tourism and deepening co-operation in energy.

“The restoration of ties has the potential to stimulate trade growth,” said Freddie Neve, senior Middle East associate at Asia House.

“Thailand is southeast Asia’s second largest economy and Saudi Arabia is the Gulf’s largest so the restoration of relations is a significant moment, with the potential to drive GCC-Asean (Association of Southeast Asian Nations) trade, as well as wider GCC-Asian relations.”

The countries restored full diplomatic ties in January 2022 – more than three decades after a dispute over a 1989 jewellery heist in which three Saudi diplomats were shot dead in Bangkok.

While Saudi Arabia and Thailand continued trading during the dispute, trade declined from $8.6 billion in 2010 to $6.4 billion in 2021.

In the past year an agreement between state-owned energy companies Saudi Aramco and Thailand’s PTT was signed to work more closely on carbon capture and crude oil sourcing, while direct flights between Saudi Arabia and Thailand have also been launched.

Saudi Arabia reportedly plans to invest $8.5 billion in Thailand this year, with the focus being the Eastern Economic Corridor, the country’s flagship industrial hub. This would make Saudi one of Thailand’s biggest foreign investors.