In GCC, Saudi Arabia and the UAE received a big chunk of foreign direct investment in 2021, totaling billions of dollars as foreign investors seek to take advantage of investment opportunities in the region.
The Gulf Cooperation Council countries seek to increase foreign direct investment due to its critical role in transferring modern technologies and contemporary management and organizational patterns to transition to the digital economy and reduce their reliance on oil revenues.
Governments invested tens of billions of dollars in digital transformation programs, and total expenditure in Gulf countries increased in 2021.
GDP investment rates
According to the “investment guarantee 2021” report released by the Arab Investment and Export Credit Guarantee Corporation, the GDP investment rate was the highest in 2021 in Bahrain, reaching above 34 percent, 28.4 percent in Kuwait, 25.4 percent in the UAE, 24.9 percent in Saudi Arabia, and 20.5 percent in the Sultanate of Oman.
Saudi Arabia’s foreign investment opportunities
Saudi Arabia received 24 percent more FDI in the second half of 2021, hitting $3.7 billion, according to figures from Saudi Arabia’s Ministry of Investment.
To put it another way, the total amount invested by overseas investors rose by 257 percent last year to $19.3 billion, compared to the year 2020.
According to the Ministry, Saudi Aramco’s $12.4 billion infrastructure contract with an international consortium of investors increased net foreign direct investment inflows.
Despite the global economic downturn, the ministry considers that Saudi Arabia is becoming a more desirable investment destination, as seen by the steady increase in foreign cash inflows into the country.
Due to the national investment policy, foreign investors will have additional opportunities to participate in the Kingdom’s current economic transformation.
UAE FDI climbed 116% in the last decade
The foreign direct investment flows in the UAE increased 3.9 percent in 2021 compared to 2020 and amounted to $20.7 billion, as UAE Minister of Economy Abdullah bin Touq Al Marri revealed during the Annual Investment Forum 2022 at the Dubai Exhibition Center at Expo 2020.
The UAE’s performance in 2021 demonstrates the country’s commitment to attracting foreign direct investment since the UAE is one of the world’s 20 largest economies for FDI.
Al Marri added that at the end of 2021, the country’s cumulative foreign direct investment balance reached $171.6 billion, an increase of 13.7 percent from 2020.
FDI into the UAE has climbed by 116 percent in the last ten years, while total FDI balances have increased by 113 percent during the same period. Furthermore, the balance of FDI issued from the UAE overseas amounted to $22.5 billion in 2021. Annual growth is currently 19.1 percent, although it has increased by 789 percent in the last decade.