Dubai still the top destination for Mena investors

Dubai: Dubai continues to attract maximum foreign direct investment in the region despite the impact of the global economic crisis, according to a survey by the Foreign Investment Office (FIO) of the Dubai Department of Economic Development (DED).

FIO, which surveyed more than 1,000 global and regional investors, said 54 per cent of the respondents already have a presence in the city and an additional 16 per cent of investors plan to enter Dubai in the next three years.

A preliminary study report by FIO said global companies view Dubai as an essential part of their total value chain to access the attractive markets of the Middle East and North Africa (Mena) region, while maintaining their most vital and strategic activities here.

Sultan Bin Saeed Al Mansouri, the UAE Minister of Economy, said last week that the UAE is in the final stages of enacting new laws and updating existing regulations to boost investor confidence.

"The UAE is currently the Arab World's second leading destination for foreign capital and our total FDIs stood at $69 billion (Dh253.3 billion) in June of this year. A Foreign Investment Law intended to further accelerate foreign investment inflows is therefore being drafted as a priority. The law will unify legislations for foreign investments and will articulate exemptions and guarantees on investment projects," the Minister told a gathering at the Dubai Chamber.

Confidence index

In the 2010 A.T. Kearney FDI Confidence Index report, the UAE scored first as a country and Dubai stands out as the preferred FDI destination in the Middle East for the ease of doing business, access to best-in-class infrastructure, advanced logistics facilities and safe environment.

"The confidence in Dubai as a hub for FDI to the Mena region and the positive growth outlook for the regional markets is encouraging. It highlights the Emirate's ability to rebound and become a world leading FDI destination for global investors," Fahd Al Gergawi, CEO, FIO, said in a statement.

According to the investors interviewed by FIO, Dubai has reached the next level of economic maturity and attractiveness. Their outlook is based on Dubai's ability to build a strong infrastructure as well as its prevailing business-savvy approach and innovation.

Latest statistics from United Nations Conference on Trade and Development (UNCTAD) show that Saudi Arabia and the UAE received about 80 per cent of the total $278 billion foreign direct investments attracted by the GCC in the past two decades.

While Saudi Arabia remained the largest Arab destination for FDI, attracting nearly $147.1 billion, the UAE's share stood at $73.4 billion, making it second top investment recipient in the region, according to the UNCTAD's 2010 global investment report.

The 2010 UNCTAD report shows FDI flow into the GCC witnessed a drop of 16.67 per cent to $50 billion in 2009 over a year earlier due to the global financial crisis.

The FDI flow into the UAE fell from $13.7 billion in 2008 to nearly $4 billion in 2009, one of its lowest levels over the past 15 years. Last year, FDI flow into Saudi Arabia slumped from a record high of around $38.1 billion in 2008 to about $36 billion. The only exception was Qatar where FDI inflow more than doubled from $4.1 billion in 2008 to $8.7 billion in 2009.