UAE An Attractive Destination For Investment Over Next 3 Years

UAE an Attractive Destination for Investment Over Next 3 Years

The United Arab Emirates (UAE) rose to 15th position globally in 2021, up by four positions compared to the previous year on the Kearney’s Foreign Direct Investment Confidence Index (FDICI). The rankings were calculated based on the market research survey conducted by Kearney of 500 senior executives of the world’s leading corporations. The survey questionnaire asked questions related to companies’ likelihood of making a direct investment in a market over the next three years. Interestingly, global business executives stated that UAE is likely to attract the most investment in the next three years in the Middle East. 

Despite the Covid-19 pandemic, UAE was one of the five countries that achieved a higher ranking in 2021 on the FDICI index. Some of the scales in which UAE ranked high were; government incentives for investors, enabling environment, technological infrastructure and innovation. Optimism levels regarding the economic outlook for the UAE scored higher in relative terms than those documented last year, placing it among the top five countries in terms of net optimism. The UAE along with Brazil and China were also named as the only three emerging markets on FDICI.

Foreign Direct Investment in Post-Pandemic Economy

The 2021 FDICI rankings displayed a high level of uncertainty about the timeline in which the global economy will recover from the post-Covid situation. In addition to the fall in confidence about the global economic recovery, the overall scores for the top-25 countries have fallen significantly when compared with previous years. Only 57% of investors interviewed were optimistic about the three-year global economic outlook, while more than 72% were confident about it in the year 2020, in a survey conducted before the pandemic began. Investors are more cautious regarding FDI globally as the majority of the countries are still going through economic recovery. The ranking reveals a significant fall in overall optimism about the global economy since pre-pandemic levels in 2020; however, investor optimism about the Middle East and North Africa (MENA) region generally remained stable.

Read: Investors Positive & Confident about the UAE Economy

Foreign Direct Investment in UAE

Overcoming Covid-19 situation will be a key to economic recovery and the improvement in FDI inflow. The UAE government has taken several measures to control the Covid-19 outbreak and accelerate the pace of economic recovery. Some of the major initiatives taken by the government include the successful roll-out of Covid-19 vaccines (52.46% of the UAE population is vaccinated), extension of freeze on government fees to support the local economy and businesses, announcement of UAE citizenship and Dh 30 Bn Strategic Programme to Boost the UAE Economy and Dubai Master Plan 2040. This has increased the investors’ confidence in the government’s commitment to provide an effective environment for the businesses to grow. As a result, UAE expects a significant increase in the FDI inflow with the futuristic strategies planned by the government.

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