UAE's Blueprint for Global Water Trade

Water as a Strategic Resource: How the UAE is Transforming Global Water Trade

As water scarcity becomes an increasingly urgent issue around the world, the United Arab Emirates is not only adapting to the challenge but also taking a leadership role in providing solutions. Dubai and the UAE view water scarcity as an opportunity and are using their infrastructural, regulatory, and investment capabilities to become a regional hub in water technology, desalination, and virtual water trade.

Strategy from Scarcity

More than 40 percent of the UAE's drinking water comes from desalinated seawater, a globally outstanding ratio. The country is committed to finding and developing new water sources. Over 7.3 billion dirhams have been allocated for new desalination facilities, and simultaneously, the country is positioning itself as an aquatech innovation center.

The Dubai MultiCommodities Centre (DMCC) recent report, The Future of Trade, highlights that the UAE is not only focusing on meeting its own needs but is also becoming a re-export hub, for instance, in bottled water. In 2023, it imported more than 94 million liters of bottled water, mainly from Switzerland, Saudi Arabia, and Turkey—then partially re-exported it to other countries in the region.

Virtual Water: A New Era in Trade

Global water trade does not only consist of physical water shipments. Increasingly, virtual water trade, which involves importing products requiring significant water to produce (such as wheat, semiconductors, foods, or beverages) to conserve local, expensive water resources for other purposes, is playing a larger role.

The UAE, for example, is preserving its desalinated water reserves in this way, choosing instead to import products whose production is water-intensive. This allows the country to utilize drinking water in high value-added sectors such as artificial intelligence, logistics, food industry, or green energy development.

According to DMCC estimates, such virtual water flows could increase fivefold by 2100, significantly transforming not only trade strategies but also geopolitical relations.

Financial Gap and Solution Opportunities

While the UAE invests heavily in water management, globally, the water market is still underfunded. According to the World Bank, reaching sustainable development goals, including access to clean water and sanitation services, would require investments amounting to up to 7 trillion dollars by 2030. Yet, current investment levels fall short by hundreds of billions annually, with more than 90 percent of resources coming from the public sector.

Private capital involvement is still limited. Long return periods, complex regulations, and low yields deter investors. The DMCC study suggests that the key to the solution lies in repositioning water financially: if water becomes a tradable asset—such as in tokenized form or as a commercial right—it could encourage responsible use and open the doors to private capital as well.

Dubai as a Water Technology Center

Dubai plays a leading role not only in commercial logistics but also in innovation. The city's and the country's infrastructure serves as an ideal starting point for the global distribution of water industry technologies. The country's goal is not just to adapt to water scarcity but to become a defining player in delivering solutions—be it through physical water export, water-footprint-based trade strategies, or setting new technological standards.

Summary

Water has become one of the most valuable resources of the 21st century, and recognizing this early, the UAE approaches it with a strategic perspective. Water is not only vital but increasingly a commercial, geopolitical, and innovation factor. Through its water policies, investments, and regulatory flexibility, the UAE demonstrates a new model to the world on how scarcity can be turned into virtue and leadership.

(Source of the article: MultiCommodities Centre (DMCC) study.)