In 2023, despite a global decline in foreign direct investment (FDI), the UAE saw a significant increase of 35 per cent in FDI flows, reaching Dh112 billion. This boost placed the UAE second globally, after the US, in terms of new foreign direct investment projects in 2023. The country also ranked first in the Arab world, West Asia, and the Middle East for both inbound and outbound investments. Emerging as the 11th country globally for foreign investments, the UAE is on track to meet its government’s target by 2030.
Sheikh Mohammed bin Rashid Al Maktoum, the Vice-President and Prime Minister of the UAE, and Ruler of Dubai, shared this positive news on his social media post on Friday. This information was part of the World Investment Report 2024 issued by the United Nations Conference on Trade and Development (UNCTAD) on Thursday. According to the report, global FDI dropped by 2 per cent to $1.3 trillion in 2023, amidst economic slowdown and rising geopolitical tensions. The report also noted that FDI flows to developing countries fell by 7 per cent to $867 billion.
Despite the challenges faced by the global economy, there is still a possibility of modest growth in the upcoming year, as stated by UNCTAD. This growth is expected to be driven by easing financial conditions and investment facilitation efforts in both national policies and international agreements. Sheikh Mohammed emphasized the UAE’s attractiveness to investors worldwide, promising to continue creating the best investment environment globally. UNCTAD highlighted the importance of creating transparent and streamlined environments for business facilitation and digital government tools to promote investments.
The report also emphasized the need for institutional investors to boost FDI flows into infrastructure projects, especially in developing countries, to support long-term economic growth and stability. The UN agency called for countries to promote investment opportunities and improve participation in global production networks. Industries such as automotive and electronics in regions with easy access to major markets are witnessing growth in investments, while developing countries struggle to attract foreign investments.
With the global economy facing disruptions from crises, protectionist policies, and regional realignments, it is crucial for countries to focus on creating conducive environments for investment and enhancing global supply chains. The UAE’s remarkable performance in attracting foreign investments showcases its commitment to fostering a thriving investment landscape. Despite the challenges, the country’s proactive approach in promoting investment opportunities positions it as a key player in the global investment arena.
