UAE giving right push for FDIs

In its drive to diversify economy, the UAE’s government has outlined several strategies, notably the scheme to attract Foreign Direct Investment (FDI) by giving foreign investors attractive incentives. Annual Investment Meeting (AIM), a world leading emerging markets’ FDI platform, is being held in Dubai within this context. It connects the top FDI investors, experts, and practitioners in the world. The theme for the sixth edition of the AIM is ‘The New World of FDI, Key Features and Best Practices’.
Hosting of such annual international gatherings in the UAE provides more opportunities for growth of national economy and building of investment partnerships between countries in the Middle East, East Asia and Africa and investors.
It brings together decisions makers, officials, investors, entrepreneurs, experts, analysts and academics under one roof to discuss FDI challenges, potential and growth.
In his welcome speech on the occasion, Sultan bin Saeed Al Mansouri, Minister of Economy, said, “Our country has succeeded in just four decades to reduce dependence on oil to 30% of gross domestic product, making economic diversification a headline, and confirmed that oil is important. However, it will not exceed the contribution of more than 20% of GDP by the year 2021.”
Based on preliminary FDI data from UNCTAD, global FDI flows increased 36% in 2015 to an estimated US$1.7 trillion — the highest since 2007. This increase was largely driven by growth in FDI flows to the European Union (EU) and the United States.
Quite interestingly, the UAE is the second largest FDI recipient in the West Asia region, according to the 2015 UNCTAD World Investment Report. The increased FDI pushed the UAE to No. 1 rank regionally and 22nd globally. In terms of FDI projects, over 2015, the UAE maintained its dominance in attracting the highest FDI within the GCC region.
In line with the goals of the National Agenda of the UAE Vision 2021, the Ministry of Economy aims to increase the contribution of FDI to 5% of the country’s GDP over the next five years.
In 2014, the overall growth of foreign direct investment in the Emirates of Abu Dhabi grew by 12.8% to AED 81.1 billion, compared to AED71.9 billion in 2013, according to the Statistics Centre – Abu Dhabi.
Estimates of 2015 total direct foreign investment in Abu Dhabi showed a growth of 8.9% to reach AED 88.324 billion against AED 81.112 billion in 2014. 18.9% or AED 16.710 billion of these direct foreign investments went to the manufacturing industries in 2015, with a 7.8% growth rate, against AED 15.502 billion and a contribution percentage of 19.1% in this sector in 2014.
These figures show there is growing awareness about the necessity of encouraging foreign investment as a tool for economic diversity.
Real estate activities continue to attract the greatest portion of direct foreign investment. Investment in real estate amounted to AED 23.5 billion or 29% of the total direct foreign investment in the emirate for 2014.
Dubai attracted AED28.6 billion in greenfield FDI in 2015. It continued to enhance its position as a preferred global FDI destination in 2015 by climbing global FDI rankings to fourth position in number of greenfield projects and sixth in foreign capital attracted.
The Dubai FDI Monitor report shows that Saudi Arabia, US, Britain, India and Kuwait were the top five source countries for FDI to Dubai in 2015, generating a total of AED14.9 billion or ($4 billion) and representing 76 per cent of total FDI for the whole year.
Against such a backdrop, AIM plays a pivotal part in promoting the FDI to ensure sustainable economic growth in the UAE.