The UAE leads the world in gold consumption per capita, with individual purchases of 30-33 grams per annum, reported Al-Bayan quoting Muaadh Barakat, the regional director of the World Gold Council, an international trade body devoted to the marketing of gold items worldwide.
Barakat noted that the vast majority of gold enters the country through the Emirate of Dubai, which during 2000 had imported 250 tons of gold. Of that amount, 200 tons of gold were re-exported and the remaining 50 tons were purchased locally. Barakat said that demand for gold in the emirate rose by 9 percent, when compared to 1999.
According to Al-Bayan, market sources reported that there are some 40 gold jewelry manufacturing plants in the UAE, each of which employs about 10 workers. Total production of gold jewelry on an annual basis is between 36 and 40 tons. There are more than 450 stores retailing gold jewelry in Dubai
Clearly, the UAE—and Dubai in particular—is the main conduit for gold products into the Gulf region and beyond. One of the main reasons for this is its tax structure. While all the neighboring countries impose a 12-15 percent customs duty on gold imports, in the UAE the maximum duty paid is four percent.
But the UAE is not the only country in the region with a liberal customs regime when it comes to gold. In November 2000, a presidential decree abolished all customs duty on gold bullion in Egypt — with immediate effect. Until then, charges on importing bullion were one percent customs duty, one percent service charges and 0.5 percent tax. In a related development, a 10 percent profit tax on bullion was also abolished.
Worldwide, consumers bought more gold jewelry but fewer gold coins in 2000, the World Gold Council said. Demand for gold jewelry is running about one percent higher than last year's record level thanks to strong recoveries in Asia, with demand for the first nine months of 2000 totaling 2,114 tons. However, total demand for gold — including gold coins — during the first nine months of 2000 was down three percent to 2,392 tons. — (Albawaba-MEBG)
© 2001 Mena Report (www.menareport.com)
