Foreign direct investment in the UAE has increased by 116 per cent in the past decade, as the country’s economy continues to grow despite pandemic-driven headwinds.
Total FDI rose to $20.7 billion in 2021 from $9.6bn in 2012, state news agency Wam reported on Friday, citing a report from the Ministry of Economy.
FDI in the Arab world’s second largest economy climbed to $9.8bn in 2013, $11bn in 2014, $8.5bn in 2015 and $9.6bn in 2016. The value of FDI reached $10.35bn in 2017, $10.38bn in 2018, $17.9bn in 2019, and $19.9bn in 2020, the data showed.
The UAE was ranked 19th globally in the list of top 20 countries that attract FDIs, and the first in West Asia and the Middle East and North Africa region, the UN Conference on Trade and Development's World Investment Report said.
Kearney's FDI Confidence Index for 2021 also ranked the UAE first in the Arab world and 15th globally, advancing four places compared with 2020. It outperformed major global economies such as Singapore, Australia, Portugal, Denmark, Ireland, Brazil and Finland in the overall ranking.
The UAE is undertaking various measures to boost FDI inflows. Last year, it unveiled a new strategy to attract investment in the industrial sector and increase its contribution to Dh300bn ($81.68bn) from Dh133bn in the next 10 years.
The country overhauled its commercial companies' law in 2020 to attract more foreign capital and annulled the requirement for onshore companies to have an Emirati shareholder. It also announced legal reforms to help the country attract more FDI and support the growth of small- and medium-sized enterprises last year.
Its economy, which expanded by 3.8 per cent in 2021, is forecast to grow by 5.4 per cent and 4.2 per cent in 2022 and 2023, respectively, the latest projections from the country’s central bank showed.
The International Monetary Fund expects the UAE’s economy to grow 4.2 per cent this year and 3.8 per cent next year.
The country is also signing new trade deals to support the economy and boost investments. It signed Comprehensive Economic Partnership Agreements with India, Israel and Indonesia this year and is negotiating with other countries on similar deals.
The growth in FDI inflows to the UAE reflects the confidence of the international community in its investment environment, Thani Al Zeyoudi, Minister of State for Foreign Trade, said in April.
New legislation and the launch of the Projects of the 50 campaign are set to have a concrete effect in the long term on the flow and quality of foreign and domestic investments as well as the UAE’s overall economic growth, he said.