Inter-Arab investment dives 76% in 2010

Foreign direct investment (FDI) among Arab countries dived by nearly 76 per cent in 2010 and most regional nations suffered form a decline.

Saudi Arabia, the largest Arab economy, has emerged as the largest recipient of Arab FDI over the past 15 years while the UAE came in the fifth place.

From around $22.9 billion in 2009, inter-Arab FDI plunged to nearly $5.4 billion in 2010, its lowest level since 2003, when it stood at around $3.8 billion.

The report by the Kuwaiti-based Inter-Arab Investment Guarantee Corporation (IAIGC) gave no reason for the sharp fall last year but it was in line with a general decline in FDI flow into the Arab countries and worldwide.

Total FDI flow into the region tumbled to nearly $64 billion in 2010 from $86.2 billion in 2009 and Saudi Arabia accounted for the bulk of the drop, attracting nearly $21.5 billion last year compared with $36.4 billion in 2009.

The report by IAIGC, a key Arab League institution, showed Arab investment flow into Saudi Arabia was negligible in 2010 after climbing to one of its highest levels of nearly $11.6 billion in 2009. Arab FDI into Sudan slumped to $2.9 billion from $4.03 billion while capital into Lebanon was near zero in 2009 and 2010.

Arab FDI into Egypt fell to around $1.58 billion from $1.7 billion while there were no major Arab investments in the UAE in 2010 after reaching one of their highest levels of nearly $3.02 billion in 2009, according to IAIGC.

During 1995-2010, inter-Arab investment totalled around $164.8 billion and Saudi Arabia accounted for more than a third of the capita, attracting $64.2 billion.

Arab investment in Sudan stood at $23.3 billion while it was estimated at $14.7 billion in Lebanon, $14.3 billion in Egypt, $11.2 billion in the UAE, about $7.7 billion in Algeria, $6.4 billion in Morocco and $five billion in Syria.

In 2010, Egypt emerged as the largest Arab capital exporter into fellow member states, pumping $2.27 billion. It was followed by Saudi Arabia, which invested about $923 million in other Arab states and the UAE, with around $830 million.

Sudan was the largest beneficiary of Arab capital in 2010, receiving around $2.9 billion, mostly in farm ventures by Saudi Arabia, the UAE and Egypt.

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