The UAE likely to attract the most investment in MENA: Kearney

Global business executives surveyed by consulting firm Kearney say the UAE is likely to attract the most investment in the next three years in the Middle East.

Kearney’s 2021 Foreign Direct Investment (FDI) Confidence Index ranked the UAE 15th globally, up from 19th place in 2020. The UAE is one of only five countries worldwide that achieved a higher ranking this year in an increasingly competitive global FDI attraction environment.

The UAE ranked high for 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 joins and Brazil and China as the only three emerging markets on this year’s Index.

This year’s rankings point to continued apprehension and uncertainty about how quickly the global economy will recover post-Covid. In addition to the fall in confidence about the economy, most of the overall scores for the top-25 countries have fallen compared with previous years. Only 57 per cent of investors are optimistic about the three-year global economic outlook, which is much lower than the corresponding figure last year of 72 per cent (before and at the onset of the pandemic).

Read: UAE announces $10bn investment fund with Israel

Investors told Kearney they are more cautious regarding FDI globally as they gear up for a long-haul economic recovery. The ranking reveals a significant fall in overall optimism about the global economy since pre- and early-pandemic levels last year; however, investor optimism about the Middle East and North Africa generally remained stable.

“Overcoming Covid-19 will be key to global economic recovery and the improvement in FDI flows as the two go hand in hand,” said Erik Peterson, managing director of the Global Business Policy Council and co-author of the study.

“And economic growth in the near term will be determined in large part by the duration of the global pandemic, the effectiveness of fiscal and monetary responses, and the success of vaccination efforts.”