The GCC economic bloc remains a magnet for investment despite risks such as the continuing war, disruption to shipping, and energy sector volatility, its secretary general said on Monday.
While supply chains are being reshaped and emerging technologies are redefining sectors, geopolitical considerations raise the fundamental question of where investment will go, Jasem Al Budaiwi said.
“Opportunities no longer are sufficient to attract investment and, as variables and risks multiply, the strength of an economy, the strength of its institutions, the clarity of its directions and its ability to adapt to change become factors in guiding investment decisions,” Mr Al Budaiwi told delegates at AIM Congress 2026 in Dubai.
These fundamentals have been central to the economic development of the six-member Gulf bloc.
“The exceptional development the region has witnessed in the recent period has confirmed the solidity of its foundations despite the repercussions for shipping, supply chain and emerging energy market [dynamics],” he said.
Despite volatility, the Gulf states have “maintained the stability of their economies and continuity of their markets”, he added.
Volatile energy markets
The Iran war with the US and Israel, now in its seventh month, has tipped the region into one of its worst geopolitical crises in decades. Hospitality, aviation and tourism were among the worst hit sectors as Iran attacked industrial, energy and civilian infrastructure across the Gulf region.
Despite several rounds of mediated negotiations, the US and Iran have failed to reach a peace deal or a mechanism to reopen the Strait of Hormuz, which has remained effectively shut since the war began.
The narrow strait is a vital global trade route through which a fifth of the world’s oil and gas supply passed before the conflict.
Disruption to commercial shipping and attacks on oil and gas tankers in the waterway have created volatility in global energy markets and forced businesses across the region to rethink their supply chains.
The reopening of the strait would relieve economic pressure on Gulf economies, which despite the war have maintained growth momentum, albeit at a slower pace, according to the International Monetary Fund.
Interconnectivity
Mr Al Budaiwi said that despite adversity, the Gulf as a bloc has fared well, largely due to policies and initiatives to boost free trade and investment.
“Today the GCC states can no longer be viewed as six separate markets, but rather as an integrated, interconnected Gulf economic and investment system, built on a substantial financial and investment base that strengthens its capacity for growth and enables it to attract foreign direct investment,” he said.
The Gulf's strength as an investment magnet is reflected by the region’s economy being ranked among the world's 10 largest, with a combined GDP of $2.4 trillion.
Sovereign wealth funds in the region hold assets estimated at more than $5 trillion, while commercial banking sector assets grew to $3.9 trillion in 2025.
Gulf states' ambitious national visions have changed the region's economic landscape, empowering the private sector and opening up new avenues of investment, including AI and advanced technology.
FDI flows
One of the clearest indicators of the deepening interconnection of Gulf economies is reflected in investment flows, he said.
Total foreign direct investment inflow into Gulf economies reached $792.7 billion last year. About 171.4 billion of that total is investment among GCC states, Mr Al Budaiwi said.
“In other words, intra-Gulf investment accounted for nearly 22 per cent of the total stock of foreign direct investment inflows into the GCC states,” he said.
“Gulf capital is increasingly moving across the council's member countries, contributing to building projects, business networks and cross-border supply chains,” the secretary general said.
UAE focus on open partnership
The UAE is aware of the profound reshaping of the global map of trade, investments and economic influences as political tensions redraw supply chains, Dr Thani Al Zeyoudi, Minister of Foreign Trade, told delegates in his keynote address.
“Today, investors are looking for returns, flexibility, efficiency and market access – all of them at the same time,” he said. “Here in the UAE, we began preparing for these shifts earlier as we chose to build an open, resilient partnership economy, and we have used trade and investment as a tool to build new bridges.”
FDI into the UAE rose by about 6 per cent to reach $48.24 billion in 2025, the ninth highest in the world, according to the UN Conference on Trade and Development.
The UAE was the top recipient of FDI in the broader Middle East region, ahead of Saudi Arabia, which ranked 13th among host nations, Unctad said in its World Investment Conference 2026 report in July.
With the country’s non-oil foreign trade exceeding $1.9 trillion in the first half of 2026, “global trade and investment indicators reflect the depth of confidence in the UAE’s model”, the minister said.
“They are indicators of competence, confidence in stability of our economy, confidence in the clarity of our policies, and confidence in the efficiency of our legislation,” said Dr Al Zeyoudi.
RAK appeal
Sheikh Saud bin Saqr Al Qasimi, Ruler of Ras Al Khaimah, said the emirate was one of the UAE locations primed for FDI as it had developed a diversified economy “shaped by its natural advantages, strategic location and ability to move with purpose”.
“Manufacturing, tourism, logistics, real estate and emerging industries are now part of a development model built on stability, agility and trust,” Sheikh Saud told delegates at AIM.
Ras Al Khaimah's business community includes more than 73,000 companies representing more than 100 countries, he added. Their presence “reflects confidence in our emirate as a place where businesses can establish themselves, expand with certainty and become part of a dynamic, outward-looking economy”, he said.
