UAE attracts $76bn FDI

Country is second largest Arab foreign investment destination

The UAE has attracted more than $76 billion in foreign direct investment since it was created 40 years ago to emerge as the second largest foreign capital destination in the Arab world after Saudi Arabia, according to official data.

Saudi Arabia, the largest Arab economy and the world’s dominant oil exporter, got nearly $170.4 billion in FDI during while Egypt maintained its position as the third largest FDI recipient in the region, showed the figures by the UN Conference on Trade and Development (UNCTAD).

The report showed cumulative FDI flow into the UAE has totalled $76.17 billion, nearly 12.6 per cent of the overall Arab FDI inflow of $603 billion.

The UAE, the second largest Arab economy, also accounted for nearly 24 per cent of the FDI flow into the GCC and 0.4 per cent of the world’s direct capital.

Saudi Arabia accounted for around 28 per cent of the total Arab FDI despite a sharp decline in its FDI in 2010, when it stood at around $21.5 billion compared with nearly $36.5 billion in 2009, the report showed.

FDI flow stood at around $73 billion into Egypt, nearly $42 billion into Morocco, $37 billion into Lebanon and about $31.4 billion into Qatar.

Other major Arab FDI recipients include Tunisia with around $31.3 billion, Sudan, with $20.7 billion, Jordan with $20.4 billion and Algeria with $19.4 billion.

The report showed total FDI flow into the Arab region plunged by nearly $22 billion to $64 billion in 2010 from $86 billion in 2009.

A breakdown showed there was a decline in most regional states except Lebanon, Morocco, and conflict battered Libya and Iraq.

FID into the UAE edged down slightly to around $3.9 billion from $four billion while capital flow into Qatar slumped to $6.5 billion from $8.7 billion.

FDI flow to Saudi Arabia slumped to around $28 billion in 2010 from $32 billion in 2009 but it remained the highest annual FDI flow rate in the Middle East.

Kuwait also suffered a sharp drop in FDI inflow from around $1.11 billion in 2009 to nearly $80 million in 2009, said the report, which gave no reason for the fall.

As for FDI outflow, the UAE emerged as the largest capital exporter in the Arab region, pumping nearly $55.5 billion into global markets during 1990-2010.

The report showed Qatar came second, with capital outflow standing at over $25.7 billion during that period. It was followed by Kuwait, with around $18.6 billion, Saudi Arabia with nearly $16.9 billion and Libya with about $13.2 billion.

The cumulative capital flow out of the Arab region totalled around $160 billion during 1990-2010, according to the report.

In a previous report, UNCTAD ranked the UAE as the 30th largest capital exporter in the world as it was outstripped only by major developed nations.

UNCTAD figures covered only FDI as they did not include capital channeled by the Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds (SWFs), with assets of between $300-900 billion.

The report showed FDI flow out of the UAE climbed to a record high of around $15.8 billion in 2008 from $14.5 billion in 2007 before plunging to nearly $2.7 billion in 2009 because of the global fiscal crisis and lower oil prices.

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