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UAE Freezones Biz News Updates
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UAE 11th most attractive FDI destination
Country’s ranking improved three positions compared to last year, according
to A.T. Kearney report
The UAE is ranked 11th position globally in the Foreign Direct Investment
Confidence Index (FDICI) created by management consulting firm A.T. Kearney
on Tuesday.
The A.T. Kearney Foreign Direct Investment Confidence Index established in
1998 and now in its 14th edition is an in-depth view of forward-looking
global investment sentiment. In this year’s ranking, the UAE climbed to 11th
position from 14th position in 2013 and 15th in 2012.
Last month, the Swiss-based International Institute for Management
Development (IMD) ranked the UAE in 8th position in global competitiveness
and ranked the UAE government as the most efficient with strongest
decision-making and the lightest bureaucracy in the world.
In the FDICI ranking, US maintained its 1st place position from last year
followed by China and Canada.
In the Middle East, the UAE is the only country that figures in the top 25
ranks. Globally, the UAE’s ranking is above countries such as Mexico, South
Africa, Switzerland and Malaysia. In addition, 39 per cent of global
investors responded that UAE as an FDI destination had a more favourable
outlook than in 2012.
“The Emirates’ traditional strengths of well-developed infrastructure,
talent base, strategic location, and ease of doing business offers
international investors easy access to many of the world’s fastest-growing
markets including the Middle East, Central Asia and Africa,” said Anshu
Vats, Partner at A.T. Kearney Middle East.
The UAE reported a $9.6 billion inflow of FDI in 2012, up from $7.7 billion
the year before. Following the opening of new areas for foreign investment,
several large Emirati companies are lifting the total value of equity that
may be held by foreign investors. Most recently, Dubai Investments announced
a lifting of the ceiling to 35 per cent, and Deyaar, Union Properties, and
Mashreq have also recently lifted their ceilings.
FDI in the hospitality business is expected to increase as Dubai prepares to
host the 2020 World Expo. The total investment needed for the event is $8.8
billion, including plans to double the number of hotel rooms in Dubai.
“The UAE has developed investment opportunities, diversifying the industrial
base and attracting innovative SME industries to the region. These efforts
have delivered very positive results: Dubai securing Expo 2020, and Abu
Dhabi’s 2030 strategy being tangible examples of the value proposition the
country has presented to international industrial and investment
communities,” said Vats.
Globally FDI flows hit an all-time high of $2 trillion in 2007, when global
economic growth stood at 3.9 per cent and most economists were predicting
continued robust growth. Following the great recession and the economic
contraction of more than 2 per cent in 2009, global FDI flows dropped to
$1.8 trillion in 2008 and to $1.2 trillion in 2009.
In 2010 and 2011, as the global economy slowly recovered, FDI improved
modestly as investors got back to business. In 2012, however, global FDI
suffered a setback, dropping to $1.4 trillion as the ongoing effects of the
economic and sovereign debt crises and concern over systemic uncertainty.
With the economic optimism returning across the world, FDI flows are
expecteded to pick up pace this year. “Despite volatility and economic
uncertainty on a global scale, the findings from the 2014 FDICI suggest that
a corner is being turned. Corporations sitting on massive cash reserves are
increasingly confident that they can parlay these into productive
investments with attractive returns,” said Paul A. Laudicina, founder of the
FDI Confidence Index and A.T. Kearney chairman emeritus.
June 3, 2014 |
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Courtesy Al Nisr Publishing LLC
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