Ernst & Young indicated that foreign direct investment (FDI) in Arab countries totaled $790.2bn and increased at a compound annual growth rate (CAGR) of 5.1% between 2003 and 2011.
FDI inflows reached $43bn in 2003, $58.5bn in 2004, $72.9bn in 2005, $118.8bn in 2006, $68.5bn in 2007, $202.7bn in 2008, $99.6bn in 2009, $62.4bn in 2010 and $63.8bn in 2011. The Middle East was the main source of investments with 35% of the value of FDI during the 2003-11 period, followed by Western Europe with 24% and North America with 18%.
The real estate, hospitality and construction sectors attracted $327bn or 41.4% of total FDI during the covered period, followed by the energy sector with $184.5bn (23.3%), the chemicals sector with $100bn (12.7%), and the metals & mining sector with $47.7bn (6%). Further, Arab countries attracted a total of 6,329 FDI-related projects that created about 1.1 million new jobs during the nine-year period.
The number of FDI-related projects grew at a CAGR of 12.5% and that of FDI-created jobs rose by a CAGR of 6.3% during the 2003-11 period. There were 362 new projects in 2003, 359 projects in 2004, 479 projects in 2005, 693 projects in 2006, 584 projects in 2007, 1,070 projects in 2008, 993 projects in 2009, 861 projects in 2010 and 928 projects last year. The six GCC economies attracted 62.3% of the value of FDI projects, as well as 79.1% of the number projects and 65.3% of the jobs created during the 2003-2011 period.
Source: Ernst & Young- Byblos Bank Research