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12/07/2017 - 07:00hs
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Arab countries see 25% increase in FDI

The region was targeted by USD 30.8 billion worth of foreign direct investment last year. The United Arab Emirates was the number one destination.



Abu Dhabi – Arab countries saw an influx of USD 30.8 billion worth of foreign direct investment (FDI) in 2016, a 25% increase over 2015, Emirates News Agency (WAM) reported this Tuesday (11), based on a report from Kuwait’s Arab Investment and Export Credit Guarantee Corporation (Dhaman). The amount is equivalent to 1.8% of global FDI flows, and to 4.8% of FDI flows to developing countries.

The United Arab Emirates topped the list of Arab countries in FDI last year with USD 9 billion in investments. Egypt and Saudi Arabia placed second and third. The survey relied on figures from the World Investment Report 2017 of the United Nations Conference on Trade and Development (Unctad) and from other local and international sources. Dhaman is a pan-Arab organization.

The report notes that FDI flows remain concentrated in some Arab countries, with the UAE, Egypt and Saudi Arabia accounting for 80% of regional flows. Unctad numbers show that the FDI to the UAE was up 2.2% compared with 2015. In Egypt’s case, FDI increased by 17% to USD 8.1 billion. Saudi Arabia was targeted by USD 7.45 billion in 2016, down 8.45% from 2015.

WAM adds that the Gulf Cooperation Council (GCC) had a bigger influx than the other Arab countries. The bloc comprises Saudi Arabia, Bahrain, Qatar, the UAE, Kuwait and Oman.

Conversely, FDI originating in Arab countries slid by 14% to USD 31.3 billion, which is tantamount to 2.2% of global flows and 8.2% of flows in developing countries.

The Arab world’s greatest sources of investments were the UAE, Saudi Arabia, Qatar, Oman and Lebanon, accounting for 74% of the bloc’s investment flow.

Projects

Considering the ventures announced, WAM reports that 616 companies launched 773 projects aiming at foreign capital in the Arab world in 2016, with total investments expected to reach USD 94 billion with 115,000 jobs created.

With USD 40.9 billion in projects, or 44.3% of the total, Egypt tops the list in this aspect, followed by Saudi Arabia, with 12.8%, and the UAE, with 10.6%. China is the main investor with USD 29.5 billion in projects, or 31.9% of the total, followed by the UAE with USD 15.2 billion, or 16.4%, and the United States, with USD 7 billion, or 7.6%.  

Regarding investments amongst Arab countries, according to the report, 142 projects were presented by 91 companies, with a total cost of USD 22.2 billion and 26,600 jobs to be created. Once more Egypt tops the list as the preferred place for investments with 60.4%, followed by Saudi Arabia with 23.4%, and Jordan with 3.4%.

The UAE tops the list of countries that announced the most investments in other Arab nations with 69.4% of the total, followed by Saudi Arabia (20.9%) and Egypt (3.7%). The real estate sector is the one with the greatest number of projects, with expected investments of USD 18.13 billion, or 85.2% of the investment flow amongst Arabs, followed by the food, tobacco, energy, renewable energies and telecommunications sectors.

*Translated by Gabriel Pomerancblum and Sérgio Kakitani

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