Time to time, politicised opinions emerge criticising foreign investment, either as incitement or due to a lack of understanding of its nature. Foreign investment entails various requirements related to several issues, including legal guarantees and a sophisticated legislative structure.
In the past five decades, GCC countries invested hundreds of billions of dollars in Arab countries. These have taken various forms, including development aid, subsidies, and commercial investments from the public and private sectors. They led to the establishment of hundreds of projects, significantly contributing to economic growth, job creation, and improvement in living standards in Arab countries.
The GCC countries are seeking to transfer their rich experience in the field of joint investment to other Arab countries, as intra-GCC investments flow freely between member-states, devoid of any sensitivities. This has led to the facilitation of the implementation of significant projects, the recent example of which is the Duqm Refinery project in Oman with a Kuwaiti contribution, at a cost of $ 9 billion.
The leaders of the two countries attended the opening ceremony last week, underscoring the importance of this vital project.
Indeed, the GCC nations are encountering several obstacles in transferring their experience, particularly following populist protests witnessed in some countries aimed at reclaiming agricultural land. Sudan, for instance, experienced ‘populists’ expressed their opposition to Gulf investors owning these lands for reclamation and development purposes.
This has hindered several projects, leaving these lands idle and depriving these countries of the potential to develop their agricultural sector and increasing its contribution to GDP. It also deprived citizens of plenty of employment opportunities.
Other countries want GCC funds
This happened at a time when GCC countries had found better and more profitable investment destinations offering guaranteed returns in other countries. Paradoxically, the same populist forces criticized GCC countries for not investing in Arab nations.
This conflicting stance has left GCC investors perplexed, prompting them to question whether their investments are truly welcomed. The GCC's approach is rooted in friendly, humanitarian, and fraternal motives, despite the potential risks posed by corruption and significant deficiencies in the legislative framework of some Arab countries. A telling example is Kuwait's Al Kharafi Group, which was almost bankrupted in Egypt a few years ago due to the reasons mentioned above.
Lately, significant uncertainty has clouded an important development project in the Ras El Hikma region on Egypt's northern coast after an attempt to award a tourism venture to a UAE company and infuse an estimated $22 billion in investment to transform the area into a premier tourist destination, thereby increasing revenues and providing thousands of jobs.
The project faced obstacles due to confusion that posed a challenge to the project's strategic importance for the Egyptian economy, suggesting that these desert lands will remain unchanged.
As is known in economics, land is considered one of the three pillars of production, alongside capital and labour. This implies that landlords cannot benefit from their lands in isolation from the other two elements.
By investing in land, all parties stand to gain. Whether through sale, rent, or partnership, the government will be able to obtain rewarding returns to support its financial situation while simultaneously generating new employment opportunities.
Likewise, investors can reap returns on their investments, rendering such endeavours meaningful. Otherwise, this investment is meaningless.
Why not a win-win for all?
So where is the mistake if all parties are beneficiaries? And vice versa. Hence, the question arises: where lies the fault if all parties stand to benefit?
Attracting foreign investment has contributed to the emergence and rise of countries, transforming them from poor states to nations enjoying the highest income levels in the world, such as Singapore and South Korea.
Conversely, countries that have encountered obstacles in attracting foreign investments have missed out on invaluable opportunities for development and deprived their citizens of enhanced living standards.
It is crucial to cite a quote by a GCC leader who presented a pioneering development experience when faced with objections to selling real estate to investors from neighbouring countries. He said, "If you see one of these investors carrying a building and wanting to leave the airport, let me know."
This statement reflects his and foresight, which played a significant role in guiding his country's successful development journey and transforming it into a regional and global model.
