UAE dominates inter-Arab investment

Capital channeled by the UAE accounted for more than a third of the total inter-Arab investment.

The UAE has pumped over $62 billion into fellow Arab countries over the past 15 years to emerge as the dominant investor in the region, according to official data.

The capital channeled by the UAE, the second largest Arab economy, accounted for more than a third of the total inter-Arab investment during 1995-2009, showed the figures by a key Arab League financial organization.

Saudi Arabia, the largest Arab economy, accounted for nearly 70 per cent of the UAE’s investments while Egypt, Morocco, Lebanon, Libya and Tunisia were also key recipients, the Kuwaiti-based Inter-Arab Investment Guarantee (IAIGC) said in its annual report on the investment climate in the Arab region.

The report showed cumulative foreign direct investment (FDI) channeled by the UAE into the other Arab markets totaled $62.4 billion during 1995-2009 while the country received around $13.1 billion in capital from fellow Arab nations.

IAIGC gave no breakdown for the UAE’s FDI in Saudi Arabia but the Dubai-based Emaar and Etisalat telecommunication operator are the largest investors in the Gulf Kingdom, covering economic cities and the GSM provider Mobily.

During 2004-2007, the UAE was the second largest foreign investor in Saudi Arabia after Japan but it is expected to top the list with the completion of the giant Economic City project in the country, according to official Saudi data.

In terms of projects licensed by the Saudi Arabian General Investment Authority (SAGIA), the UAE becomes the dominant foreign investor in the Kingdom, with a total committed capital of SR122.9 billion (Dh121.6 billion), nearly 41 per cent of the overall FDI licensed by the Authority since it was established in April 2000.

The IAIGC’s report showed Saudi Arabia was the second largest capital exporter to other Arab countries during 1995-2005, pumping around $19.7 billion. The bulk of its FDI was channeled into the UAE, Sudan, Morocco and Lebanon.

But the Kingdom, the world’s dominant oil power, topped the list in terms of capital flow from other Arab states, receiving around $76.4 billion, more than half of which were pumped by the UAE, according to IAIGC.

Other key capital exporters into Arab markets were Kuwait, with a round $21.2 billion, Bahrain, with $11.2 billion, and Egypt with about $10.5 billion.

The region’s main beneficiaries included Saudi Arabia, the UAE, Sudan, Lebanon, Egypt, Morocco and Algeria.

The report showed the main capital exporters to the UAE were Kuwait, with about $3.55 billion, Saudi Arabia, with nearly $2.46 billion, Lebanon with $1.5 billion and Qatar, with around $1.41 billion.

Total inter-Arab investment stood at $163.3 billion, nearly 35 per cent of the overall Arab FDI of around $470 billion pumped worldwide during that period.

 

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