Foreign direct investment (FDI) flow to Gulf countries has shifted focus on intra-regional investments, Ernst & Young’s inaugural “Middle East Attractiveness Survey” revealed on Thursday. The report said that the FDI originated from GCC countries, particularly from Qatar, Saudi Arabia and UAE.
The finding, launched during the ‘Growing Beyond Summit 2012’, combined annual FDI from year 2003 to 2011 and analysis of 355 global and regional executives on where and how FDI across the Middle East will take place in the next decade.
The regional attractiveness of Middle East countries has improved from 362 in 2003 to 1, 070 in 2008, the report disclosed. Though projects dipped during the recession, it soon recovered in 2011.
Jay Nibbe, Ernst & Young Markets Area Managing Partner for Europe, Middle East, India and Africa (EMEIA) said: “The Middle East has many of the qualities that companies look for in an FDI destination: solid investment fundamentals, strong demographic trends and vast natural resources.”
Initial findings for the first six months of 2012 demonstrated a good picture. GCC received about 79% of the FDI projects, 62% in terms of value and 65% jobs were created since year 2003. The bulk of these, however, went to the UAE, Saudi Arabia and Qatar. Egypt received highest investments in terms of value.
In the year 2011, Saudi Arabia became the winner with 161 investments worth $14.7bn. Other regional markets that outperformed included Bahrain, Iraq and Oman. Early data from 2012 also showed a similar picture, with Saudi Arabia in the lead. There is also marked diversity in the sectors attracting FDI; retail and consumer products attracted over 20% of projects along with business services, real estate, hospitality and construction sector. Egypt is also trying to revive its fortunes after the uprising last year.