Dubai Free Economic Zone
Quasi-investments
Over the past six months, Dubai has become a supplier of almost daily News. It can hardly be described as events in the field of culture, rather, a pseudo-cultural "movement" into which the capital of the UAE was plunged by the Russian elite of all stripes, political colors and levels of influence and wealth. The omniscient Bloomberg noted with interest that some part of Russians, apparently out of a special love for the culture of the East, bought 86 properties for almost $57 billion over the past year. For comparison: the entire foreign trade turnover of Russia and the Emirates in 2021 amounted to $5,35 billion, last year - $7,5 billion.
It is clear that the flow of investment and quasi-investment funds from other jurisdictions has also increased significantly, if only the branches of companies in the Emirates were opened under a thousand. And this thousand is not the limit, since the period for obtaining tax residency in the UAE under pressure from the United States was forced to be reduced. From the beginning of March, a foreign branch will no longer be a resident, which means that it will be difficult to conduct transactions in the zone of sanctions control, to put it mildly.
The withdrawal of financial resources from various tax residencies by our compatriots is not yet taken to be calculated in Dubai itself, especially since assets in the crypt must be added here. So far, it is clear that of all the regions that provide (as far as they can) preferential treatment for Russian and former Russian assets, the UAE is the leader.
One can endlessly be indignant at how merciless our criticism is in relation to relocants on bicycles who reached out to Central Asia or Upper Lars, and how “streamlined” this criticism is when it comes to those heading towards the Arab man-made paradise. This is a question of the moral imperatives of one part of society and another, that is, in the current conditions, it cannot be solved. And in which solvable - this is another topic. If we consider this process of asset transit from a purely economic point of view, then it gradually becomes a serious market factor.
Part of the funds and assets withdrawn earlier offshore, in turn, also worked in the circulation of export-import operations. Another thing is that their concentration within one market platform was not so high before. Part of the open branches will also work to ensure this turnover. Open branches and legal entities in Central Asia are only the scale of predominantly medium-sized businesses. But work in Dubai is already reaching the level of serious raw materials operations.
India today is one of the main buyers of Russian oil. Some of the raw materials are resold, some are delivered to their own refineries. And so Indian buyers began, according to Reuters, to pay for oil in the UAE currency - dirhams. Pricing is set through stock indicators, discounts and on a dollar basis, payments are made through cross-rates of the Indian rupee - dirham. Such is the "beginning of the 90s" only on a global scale.
Why dirham?
With all the sarcasm and historical Parallels, it should be said that this means that it is Dubai that de facto becomes the very place where transactions are carried out, the market. One can say that it doesn't matter where the deal is concluded and in what instruments, the main thing is that the sanctions are bypassed. Can. But why dirham, is it just to confuse transactions? No, for this you can open branches in New Delhi - dirhams are needed to get back into the dollar zone.
Yes, New Delhi itself is not eager to make large-scale payments for raw materials in rupees, and this can be understood, since production is largely oriented to the domestic market, and imports come from the Western Bloc. And this is a separate question about the prematureness of the declaration of success in the potential growth of settlements in national currencies.
The question is not in the calculations themselves, but in their quality and the physical meaning of trading operations. After all, if you cannot buy our goods for rubles yet, then bring yours to us, exchange it for raw materials in the ruble equivalent. And, well, yes, there is no such exchange. Not Enough Commodity? Bring others, but there is no cost accounting and exchange technology. And if they were, then why the third and fourth intermediary currency?
In one of the articles, the author, not without sad irony, considered the question of why our elites so persistently pushed back from the idea of a “pivot to the East”. On this conditional “Big East”, today sanctions bulge out by force, but even here ours remain ours, true to themselves – they organize a Middle East hub for themselves in order to stay in the dollar zone by any means.
Why is this important in terms of trading in raw materials and not so much in relation to other transactions?
Scale. Since the beginning of the NWO and the imposition of sanctions, many domestic economists have been persistently promoting the idea of forming commodity prices through the Russian ruble. Form the cost and price through the Russian stock exchange in rubles, open ruble accounts, pay in rubles - and no sanctions. Moreover, this idea has become, more than ever, relevant with the introduction of the so-called. price ceiling, which will soon be set for petroleum products. After all, not every delivery needs to conjure for sending to the EU.
Yes, the ceilings are high, the European Union provides for “gaps and holes” in these regimes. Our industry, here we must really pay tribute, prudently acquired a tanker fleet, having bought around the world all more or less available watercraft. But deliveries go at a discount above the statistical values, the margin of intermediaries is growing. And how can it not grow, if only the number of transactions and rate recalculations has tripled? Since direct payments without any special schemes are already moving mainly into the yuan zone, the most logical, understandable and effective way to avoid falling under this very yuan, as they say, is the transition to establishing the ruble value of the subject of sale.
Actually, Indian buyers themselves will not be cold or hot from these triple recalculations - they will not pay for it. This all falls and will fall on the costs of the seller under the contract, since this is not an idea or a whim of the buyer. No one will certainly force Indians to pay, they will shift commissions on direct contracts to the seller. That is, this is another actual increase in the discount, through an increase in the cost of operational services.
The author understands that many media outlets will happily present this topic in the vein of the “end of dollar hegemony”, but what is the end here, in fact? Intermediaries themselves are not happy with such calculations, the exchange rates of national currencies become unstable, for Arab countries, as importers of manufactured goods, first of all, the euro and the dollar are needed, and as a result they will be forced to issue more of their own currency, despite the fact that the recipient of the dirham is also de facto " sits in the dollar.
Where is the real de-dollarization?
But when the price is set in rubles, that same de-dollarization occurs. And even the ruble can be sent to Central Asia, where we now also have our own relocators, smaller ones.
It is possible that the UAE themselves will eventually limit this mediation so as not to literally drown in the national currency, but some of our people (and therefore our people, because they are very persistent in such matters), they will look for a new cheerful Tortuga. And whoever seeks, he, as you know, will find.
It is clear that not only and not so much Dubai today is drawn into this scheme "without the dollar, but with the dollar." This is being tested wherever possible. It's just that the UAE has a historically winning position here - they are not just an oil country and a magnificent resort, they are the main trading platform of the entire region. This is not an exchange, but a huge market where thousands and thousands of transactions are concluded for supplies to Asia, Africa, and neighboring countries. There are representatives of almost any buyers and sellers, this is also a hub, but not a logistics one, but a trading and intermediary one. Considering the standard of living, it is really very convenient.
There is no doubt that today and in the future Russia will need large partners, such trading platforms, in order to bypass sanctions in the technological sphere, settlement schemes will also be required. After all, the USSR had such opportunities and created the conditions. But there must be a rational choice between industries. The establishment of ruble prices for raw materials and export sales on the domestic market will inevitably give rise to ruble investments - that catalyst or donated blood, without which it is impossible for us to develop. We were excommunicated from the investment dollar, and it seems that last year we began to replace it with the ruble, but something “does not work”. At the same time, economists cannot fail to understand that such trade and value hubs will be unstable in real practice. But the paradigm "to be anywhere, but not in the ruble" is simply iron.
We are well aware that the West is issuing sanctions en masse, but when you look at the details, it turns out that they are cutting off the investment flow, but with the question of using the dollar and the euro as an instrument of accumulation, everything is not so simple. And that is precisely why our elites are counting on somewhere and somehow to seep between the jets. And everyone seems to be saying the right words, that “market operators should insure risks”, “de-dollarization”, but in fact this is a signal that separate clusters of value formation are potentially being created on the same dollar base. And now it should become ruble for the main commodity groups and only ruble.
In general, such a signal clearly indicates that the idea of ruble pricing for exports should not only return to the discussion field, but should also be expanded to cover all major commodity groups. Another thing is that it is not very clear what forces in the elites are really interested in its implementation.
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