Some, but not all, Gulf Cooperation Council countries are doing fine relative to their foreign fund inflow. The UAE leads the bloc in enticing such investments, a position historically held by Saudi Arabia.

The World Investment Report 2014 from the World Conference on Trade and Development (Unctad) has just confirmed the change at the top. The UAE attracted some $10.5 billion in 2013, a rise of 9.2 per cent. Still, this remains below that of $13.7 billion achieved in 2008, just before the global crisis broke out.

Saudi Arabia attracted some $9.3 billion, down by a significant 24 per cent. The rather unsatisfactory showing confirms a disturbing trend that has been all too apparent in recent years. Saudi Arabia had managed a fund inflow of $39.5 billion in 2008, $36.5 billion in 2009, and only $12.2 billion in 2012.

Kuwait comes third with an inflows of $2.3 billion, though offset by outflows of nearly $8.4 billion. This is not entirely surprising, as Kuwaiti authorities are known for their international leanings with regard to investment choices.

Oman recorded the biggest jump among the Gulf bloc in tapping overseas interest, with a growth of 56 per cent to total $1.6 billion. The development serves as ample testimony of the Sultanate’s ability in gaining traction with international investors. For instance, there have been some telling contributions into the tourism sector.

Bahrain succeeded in generating an 11 per cent increase — compared with a global average of 9 per cent — to $989 million in 2013. However, the level is considerably below the $1.8 billion achieved in 2008.

Put simply, FDI inflows represent a commitment on the part of investors to take up exposures in particular entities or industries. Not surprisingly, many countries appreciate such fund inflows in order to better help them address critical socioeconomic challenges such as growth and job creation.

Not surprisingly, GCC countries are noted for being a source of FDI outflows, with a fair number of acquisitions among them. Most recently, there was Etihad, the national carrier of the UAE, buying controlling stakes in India’s Jet Airways and in Alitalia.

Kuwait has an established record of investing abroad to seek the best returns on its investments. The same is increasingly true of Qatar through its acquisitions in banks and a raft of other entities cutting across sectors.

Understandably, it makes sense for GCC countries to maintain their high foreign investment outflows. However, what is not comprehensible is the still relatively small scale of the inflows, which stood at $26.3 billion in 2013. This is less than 2 per cent of the global total of $1.45 trillion.

These are certainly nowhere near impressive when compared to some of the other regions. In 2013, the US and China enticed inflows of $188 billion and $124 billion respectively.

Possible solutions to rectify this state of affairs is to create more transparent laws to facilitate the cross-border flow of funds. Other measures could include providing regular data about opportunities for foreign investors across sectors in the GCC.

The writer is a Member of Parliament in Bahrain.