Despite a decline in global foreign direct investment (FDI) in 2023, the UAE experienced a 35% increase in FDI flows last year, totaling approximately Dh112 billion.
In 2023, the UAE ranked second globally after the United States in terms of new foreign direct investment projects, as well as first in the Arab world, West Asia, and the Middle East in both inbound and outbound investments. Overall, the country is now ranked 11th globally in terms of foreign investment, on track to meet the government’s 2030 target.
This was highlighted in a Friday X post by Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. He reacted to the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2024, released Thursday.
According to UNCTAD report, which covers more than 200 economies worldwide, global FDI fell by 2 percent to $1.3 trillion in 2023, “amidst (global) economic slowdown and rising geopolitical tensions.”
The report noted the decline would have been 10 percent “when excluding a few European conduit economies that registered large swings in investment flows”.
FDI flows to developing countries fell 7% to $867 billion, while tight financing conditions resulted in a 26% drop in international project finance transactions.
“Crises, protectionist policies, and regional realignments are disrupting the world economy, as well as fragmenting trade networks, regulatory environments, and global supply chains, noted the report.
UNCTAD, however, noted modest growth this year remains possible, despite prospects for 2024 remaining challenging, The slight growth will be brought about by “easing financial conditions and investment facilitation efforts in both national policies and international agreements.”
World invests in UAE
In his tweet, Sheikh Mohammed said in Arabic: “Many around the world are betting on the UAE with their investments, talents, and their wealth. We tell them: Whoever bets on us, we will bet on them. God willing, we will continue to create the best investment environment in the world.”
UNCTAD noted “Investments are growing in several global value chain-intensive manufacturing sectors like automotive and electronics in regions and countries with easy access to major markets.
“But many developing countries remain marginalized, struggling to attract foreign investment and participate in global production networks,” the UN agency added.
UNCTAD called for countries to promote investment “by creating a transparent and streamlined environment through business facilitation and digital government tools.”
It also asked institutional investors “to boost FDI flows to infrastructure projects, especially in developing countries, to support long-term economic growth and stability.