UAE has been rigorously taking giant steps in revolutionizing its economy and different industrial sectors in the last decade. In yet another significant move, UAE became the first country in the GCC region to move towards a digital TIR system, an important step that will have long-lasting impact on its economy and Road freight services. Recently, an MoU was signed to take digital TIR forward as a bid to help customs authorities in streamlining several processes while keeping the safety, security, and competitiveness of different industries in mind. This will play a crucial role in establishing the country as a major player in today’s competitive business environment.
This is a deciding step towards improving cross-border trade and international freight movement in the UAE and the government has yet again shown its commitment towards improving its status as a major international market for the logistics sector through this MoU. Their efforts are clearly directed at making the customs clearance process as efficient as possible so that businesses don’t have to wait in queue for elongated periods just to get a nod from the customs department. Digital TIR has proven its efficiency and has emerged as an excellent trade facilitation tool in the region. The use of digital TIR has significantly reduced the waiting time at borders by as much as 92 percent. In addition to that, it has also facilitated better efficiency of custom security.
Digital TIR will follow a standard protocol amongst all countries that are a part of this relationship and fast-track the logistics and other trade-related movement faster and more efficiently. As for UAE, the memorandum suggests that the local authorities will coordinate between these trading entities for ensuring that all custom clearances are done quickly from the starting point till the end in the GCC region. The implementation of digital TIR is being seen as yet another step towards the digitization of the economy to make it more efficient. The UAE government has been quite aggressive in its approach towards the implementation of digital methods to reduce carbon footprint and a transformation towards a digital economy. And in this area, the government is looking at standardization of custom processes.
The idea of digital transformation to revive and explore UAE’s business potential took shape a few years ago, and since then there have been several steps taken to ensure that their goal is well within their reach. Today, companies are laser-focused on adapting to technologies that improve their business processes, increase their efficiency, reduce cost and decrease unnecessary spending and generate more revenue. The businesses across the region have realized that technology is not an investment, it’s an asset that will result in better growth and smoother processes. The government in the UAE has been emphasizing digital transformation in the public and private sectors to support innovation and economic diversification. And various industries have gained significantly by implementing robust digital infrastructure. A broader focus is now being put in place on large-scale digital transformation across verticals, and digital TIR is a part of the same initiative.
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During the signing of the MoU, authorities mentioned that the implementation of digital TIR will save almost 80 percent of the time for the companies participating in trade and reduce operational costs by more than 45 percent. The companies in the UAE have now realized the technology is not only making the processes simpler and more efficient but also helping them reduce costs. Technology might not be a direct contributor to reducing cost, but it makes all the processes safer and efficient, eventually increasing production and wasting resources.
As part of UAE’s digitization of the economy, the government has taken several initiatives like Dubai Internet City, UAE Artificial Intelligence, and Emirate Blockchain Strategy 2021. While the Dubai Internet City aims at a center for innovation in the field of technology and attracting information and communication technology companies, the AI strategy is all about investing in AI technologies. The blockchain initiative has been developed to better the blockchain technologies. So, cumulatively, all these initiatives by the government are looking at enhancing the country’s technological prowess for an advanced future, sustainable and diversified economy, and fast-tracking growth of several industries. These initiatives have attracted a lot of foreign investors and companies setting up their centers in the UAE furthering the government’s bid to diversify the economy and boost local employment. The implementation of 5G services along with AI technologies has ensured that the digital TIR works perfectly in sync with the expectations.
Even though there are several challenges that lie ahead for the UAE when it comes to digitization and improving the overall custom processes, at this point in time, the country is right on track. The UAE, which has also been emphasizing the development of the logistics sector and utilizing its strategic geographical position, will hugely benefit from digital TIR. The country has already become a hub for connecting Asia to markets in Africa and the US, its initiatives to make the processes related to cross-border trade will further establish it as the center of international trade.
