Details

Amid growing need for private-public partnership

-Gulf Region requires to ensure financial, economic, political stability

to maintain investment inflows

-UAE ranked 16th globally by World Competitiveness Report 2016-2017

The Arabian Gulf countries come on top of the world’s most investment-conducive nations thanks to the diverse investment opportunities they abound in, with all investment projects implemented in the region over the past years having borne fruits in a way that exceeded all expectations. These success stories are undoubtedly attributable to the positive role played by the region’s governments in developing effective investment and development plans that have yielded positive returns.

In its weekly real estate report, Al Mazaya Holding states that more constructive plans and efforts are needed over the coming period for the regional countries to reach the aspired pan-economic and financial integration required to survive the ongoing headwinds, specially that some economic tracks have shown negative symptoms that have had their own bearing on the investment landscape, not to mention the state of political tension boiling over the region that could result in an exodus of foreign investments.

The report added that despite the continued efforts being made across the private and public sectors, the pressures the economic and financial areas in the region are facing have resulted in wasting multiple investment opportunities that could have added enormous value to the regional economies.

In this respect, the report mentioned, a large number of economic projects and blocs have seen the light over the past period at the global level and generated significant economic values. And in some countries, the financial returns generated by these projects have surpassed the expectations. The report added that the GCC region boasts a lot of potential and advantages that could enable its countries to continue to forge ahead with the current projects and even launch new developmental and production-oriented enterprises over the coming period on the condition that financial, economic and political stability have been restored in addition to providing comprehensive developmental strategies over the medium term that can be adjusted if necessity arises.

The report said that regional countries enjoy a competitive edge in terms of investment, including security, stability and high cash inflows in addition to robust legislation that ensures full protection for foreign investments. In this regard, it singled out the United Arab Emirates as the region’s favourite destination for Arab and foreign investments thanks to a number of advantages, including stability, security, economic resilience, flexible legislation and business–friendly environment that entices different segments of investors.

The report maintained that the UAE is currently working on multiplying prospects for foreign investment growth, including providing myriad incentives for giant companies and business entities to gain a foothold on the UAE market and establishing economic partnerships with different world countries. This policy has enabled the country to draw accumulated foreign investments estimated at $118 billion by the end of 2016.

Foreign investments in the UAE are particularly centred in processing and heavy industries, including aluminium, and petrochemicals, in addition to tourism and aviation. The country ranked 16th globally on the World Competitiveness Report 2016-2017 which serves as an international testament to the successes achieved by the country’s domestic economy.

In the meantime, the report said, the Saudi Arabia’s economy is still in a position to secure investment successes in the coming period, pointing out that the value of investments until the end of 2016 amounted to $7.5 billion, with the transformational plans now adopted by the Saudi government expected to yield positive returns in the coming period, as it lays a special focus on strengthening the private sector contributions to the national economy and boosting competitiveness on the global level.

The report mentioned that the KSA is providing significant contributions to the global economy and helping stabilise world economic growth, noting that the decreasing government debt rate is likely to help draw more investments to the country in the coming period and pave the ground for executing more infrastructure and developmental enterprises.

It added, however, that the road is still long and onerous for the regional countries to ensure economic integration, citing the current geopolitical challenges as having a negative impact on potential investment inflows, causing considerable investments to flee the region to other markets.

In the meantime, the report noted that foreign direct investment (FDI) to other parts of the world is likewise facing headwinds, with foreign investment inflows to areas with less growth rates having decreased 13 per cent, while advanced economies witnessed an increase of 4.9 per cent in FDI to one trillion dollars over the past period, particularly in Europe, Canada, USA, Australia and Japan.

The report added that privatisation plays a significant role in propelling FDI, noting that developing economies have failed to secure the planned investment growth despite their need for considerable investments in areas of energy, water, and education. The development plans launched by the governments of the region and private sector require billions of dollars to ensure proper development before 2030, said the report, explaining that such plans are based on diversifying economic resources and income streams to ensure economic resilience, stability, and confidence.

Concluding, the report underlined the importance of reinforcing pillars of financial, economic and political stability to maintain investors’ confidence at a satisfactory level that promotes growth plans and ensures sustainable investment inflows into all economic sectors.