Region attracts $81.9bn as foreign direct investment
Strong oil prices coupled with measures by Gulf states to ease curbs on foreign capital have triggered a massive investment influx in the region and the UAE has emerged as a major destination, according to the United Nations. Between 2001 and 2006, the UAE and its partners in the six-nation Gulf Co-operation Council (GCC) attracted more than $81 billion (Dh297.2bn) in foreign direct investment (FDI) into the industry, stocks, services and other sectors, showed the figures by the United Nations Conference on Trade and Development (Unctad).
Although Saudi Arabia was the biggest recipient of FDI during the period, the UAE had the highest growth in investment in the Middle East as it is recording one of the strongest economic growth rates in the region and is pushing ahead with plans to open up its market to foreigners.
From around $30.66bn in 2001, total FDI in the GCC peaked at $112.58 billion at the end of 2006, an increase of nearly $81.9 billion, Unctad said. By the end of 2006, FDI in Saudi Arabia has totalled $51.82bn, while it was estimated at $37.09bn in the UAE, $11.4 bn in Bahrain, around $7.59bn in Qatar, $3.88bn in Oman and $778m in Kuwait.
The figures showed the UAE recorded the highest growth in investment, leaping by nearly 16 times at the end of 2006 from only around $2.24 billion in 2001. A breakdown showed investments have sharply picked up in the UAE over the past five years due to reduced restrictions on foreign capital and high economic growth caused by a surge in oil prices and stronger private sector activity.
From $1.18bn in 2001, FDI flow into the Emirates grew to $1.3bn in 2002 and jumped to $4.25bn in 2003. It rocketed to around $10bn in 2004 and maintained its high influx of $10.9bn in 2005 and $8.38bn in 2006.
Unctad’s 2007 world investment report gave no figures for 2007 but experts expect FDI to have remained high.
“There are no official figures yet about investments last year but according to my information it was as high as the previous year and perhaps higher,” said Ziad Dabbas, sharedealing director at the National Bank of Abu Dhabi. “There are some good reasons for this, including the high economic growth in the country, growing investors’ confidence, stability and high return on investment.”
Unctad’s report showed the UAE was the third largest recipient of FDI in the Arab region after Saudi Arabia, at $51.82bn, and Egypt, at $38.92bn. But the UAE recorded the highest growth in FDI in the region, averaging a staggering 258 per cent annually between 2001 and 2006.
Growth in Saudi Arabia averaged 33 per cent, while it stood at 40 per cent in Qatar, 15 per cent in Bahrain, nine per cent in Oman and 13.5 per cent in Kuwait.
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