Dubai attracts Dh12bn in FDI in the first half of 2020 despite coronavirus

The US accounted for 25 per cent of all FDI capital flows to the emirate, according to a report from Dubai Economy

Dubai attracted Dh12 billion in Foreign Direct Investment during the first half of 2020, according to a new report from Dubai Economy. Reem Mohammed/The National

Dubai attracted Dh12 billion in foreign direct investment (FDI) through 190 projects during the first half of 2020, despite the coronavirus pandemic, according to the Dubai Investment Development Agency (Dubai FDI) of Dubai Economy.

The sectors that have attracted investments include technology, e-commerce and pharmaceuticals, the agency said on Tuesday. Nearly 50 per cent of these were greenfield projects while 36 per cent were new forms of investment.

Reinvestment projects accounted for 8 per cent of the total projects during the period while mergers and acquisitions accounted for 4 per cent.

“The sustained FDI flows in H1 2020 reflect the continued attractiveness of Dubai’s investment environment, and its success in combating the Covid-19 pandemic and starting the recovery phase in record time,” Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai crown prince and chairman of the executive council of Dubai, said.

In terms of investment sources, nearly 25 per cent of FDI capital flows came from the US, followed by France (18 per cent), Belgium (9 per cent), and the UK and China (8 per cent each).

“By identifying current challenges and developing incentive plans and initiatives to ensure business continuity in the near-term, Dubai Economy is seeking to enhance the readiness of the investment environment to boost growth in the post-Covid-19 stage,” Sami Al Qamzi, director general of Dubai Economy said.

The pandemic has disrupted global trade and tipped the world economy into the deepest recession since the Great Depression. The International Monetary Fund is projecting a 4.9 per cent contraction this year and a sluggish recovery in 2021.

The UAE, which has reopened its economy gradually, has seen  the number of Covid-19 cases fall while business activity has picked up on the back of monetary and fiscal support.

The country was the first in the Mena region to introduce economic stimulus measures, including zero interest funding to banks to boost lending growth. It also unveiled other initiatives such as discounted utility bills and fee waivers.

“With the easing of restrictions on movement and travel, we are working closely with investors to facilitate the realisation of announced FDI projects that faced challenges as a result of the Covid-19 crisis,” Fahad Al Gergawi, chief executive of Dubai FDI, said.

Globally, Dubai ranked third in the number of greenfield FDI projects and fourth in FDI capital flows, according to Financial Times’ fDi Markets, which records data on capital flows and greenfield FDI projects around the world.

Dubai-based start-ups attracted Dh739 million in FDI during the period.