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UAE Freezones Biz News Updates
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UAE moves up in global investment destination rankings
Country is ranked 14th in FDI confidence index by A.T. Kearney
The UAE continues to move up the ranks in the world’s top destinations for
foreign direct investment, thanks to its well-developed infrastructure,
strategic location and tax-free environment, a new report showed.
According to the latest A.T. Kearney Global Foreign Direct Investment
Confidence Index (FDICI), the UAE has moved up one place to rank the 14th
most attractive FDI destination globally, ahead of Switzerland, South Africa
or Spain.
Occupying the number one spot is the United States, followed by China,
Brazil, Canada and India.
Conducted regularly over the last 15 years, the index serves as a gauge of
sentiment among senior executives at the biggest organisations in the world.
A. T. Kearney’s report noted that inflows to the UAE went up by 40 per cent
in 2011 to reach $7.7 billion. FDI flows to the country have the potential
to expand further as the UAE eases up on foreign ownership regulations. The
country is anticipated to pass a new law that will allow foreigners to own
more than 49 per cent of businesses outside the free zones.
“With strengths in logistics, tourism and hospitality, the UAE remains the
pocket of strength for regional investments in the Middle East. FDI could
increase in coming years as the UAE eases foreign ownership laws,” said
Anshu Vats, partner at A.T. Kearney Middle East.
Analysts have said that the Middle East region, not just the UAE, has a
number of positive qualities that investors look for in a destination, such
as strong demographics and solid fundamentals, A report by Ernst & Young
earlier noted that despite the Arab Spring, the number of FDI projects in
the Middle East increased by 7.8 per cent in 2011.
“The region’s large population is one of the youngest and wealthiest in the
world. Vast natural resources combined with increasing oil prices have
created substantial budget surpluses among oil exporters, which has helped
Middle Eastern governments increase their spending on infrastructure
projects and efficiently drive their diversification efforts,” said Abdul
Aziz Al Sowailim, chairman and CEO of Ernst & Young Middle East and Africa,
in a report.
Overall, the majority of corporate investors surveyed by A.T. Kearney (70
per cent) expect near-term recovery of their companies’ FDI levels. About
half of them see their budgets already returning to pre-crisis levels and 20
per cent expect a return by 2014.
“If this were to happen, the FDI swell could provide a knock-on effect to
global growth as macroeconomic clouds clear away,” the report said.
However, about a third of the respondents are taking a “wait and see”
approach to FDI. “While investors are still in a holding pattern as they
have been since the recession, they seem more optimistic and less jittery
than they have in recent years,” said Paul Laudicina, chairman emeritus at
A.T. Kearney.
July 1, 2013 |
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Courtesy Al Nisr Publishing LLC
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