The Arab countries witnessed the establishment of 809 new foreign direct investment projects in 2017, an increase of 35 projects compared to the previous year. The investment cost was estimated at more than $70.6bn, providing more than 100,000 job opportunities, a report on ‘Investment Climate in Arab Countries’ released by The Arab Investment and Export Credit Guarantee Corporation (Dhaman) has revealed.
The Dhaman Investment Attractiveness Index (DIAI) 2018 noted the Gulf Cooperation Council (GCC) countries acquired 542 new investment projects in 2017 related to 443 companies at an investment cost of around $22.7bn. The projects provided more than 51,000 new job opportunities.
Russia topped the list of the most important investors in the region for 2017 with a value of $32.8bn, representing 46.4 percent of the total.
Historically, the number of foreign direct investment projects in the Arab countries increased from 460 projects in 2003 to 1,324 projects in 2008 and then witnessed a general trend of decline with the repercussions of the global financial crisis as of 2009 until it fell again to 769 projects in 2015. The number climbed back to 809 projects in 2017.
Between 2003 and 2017, the number of foreign companies operating in the Arab countries was estimated at 7,350, 8.5 percent of the total number of companies investing outside their borders in the world. Between 2003 and 2017, foreign direct investment companies in the region were concentrated in a limited number of countries.
The total investment cost or expenditure of FDI projects in Arab countries between 2003 and 2017 was estimated at more than $1.1 trillion, 8.5 percent of the world total of $13.3 trillion. The total employment opportunities provided by these projects was estimated at more than 1.9 million job opportunities representing 5.9 percent of the world total amounting to 37.5 million jobs.
In 2017, 92 Arab companies established 172 new projects in the region beyond their country’s borders. The investment cost of these projects has been estimated at around $12.6bn, creating 29,400 new job opportunities.
The real estate sector is considered the most important in attracting Intra-Arab projects in 2017, with investments amounting to $7.4bn with a share of about 59 percent of the total cost of projects followed by the food and tobacco sector of $1bn and 8.2 percent, the renewable energy sector of $939m and 4.2 percent. The chemicals sector ranked fourth with a value of $676m and a 5.4 percent share. The total cost of Intra-Arab investment projects between 2003 and 2017 was estimated at more than $337bn with an increase of $13bn, which is 4 percent, compared with $324bn at the end of April 2016.
The real estate sector is considered the most remarkable in attracting Intra-Arab projects in 2017 with 59 percent of the investment cost. The financial services sector came in the first place in terms of the number of projects with 25 projects, a share of 14.9 percent of the total number of 168 projects, followed by the consumer goods industry with 24 projects each and 14.3 percent.