DOHA: The Foreign Direct Investment (FDI) flows from Qatar to other countries declined by 8.5 percent to $1.8bn, last year. Meanwhile, the inward fund flow saw a marginal increase of 0.6 percent to $327m, the United Nations Conference on Trade and Development (UNCTAD) said in its “World Investment Report 2013.”
UNCTAD’s country fact sheet on Qatar’s ‘cross-border merger and acquisition’ shows Qatar’s net purchase reached $4.61bn in 2012.
The report noted FDI flows from the GCC to other countries declined last year, by 17.7 percent to $18.6bn. Kuwait was once again the largest investor overseas, accounting for 41 percent of outflows with $7.6bn, followed by Saudi Arabia with $4.4bn and the UAE with $2.5bn.
Overall, the FDI in the GCC in 2012 increased slightly over the previous year to reach $26.4bn, bringing to an end to three consecutive years of declining FDI flow to the region since the pre-financial crisis peak of $61.7bn in 2008, NBK’s economic update said yesterday.
The GCC’s positive performance is further accentuated when placed in the context of developing economy and world FDI flows, both of which declined in 2012, by 4.4 percent and 18.2 percent, respectively. The GCC increased its share of developing economy FDI to 3.8 percent from 3.6 percent.
While Global FDI flows, especially those originating from developed economies, remain inhibited by the deleveraging of international banks and investors’ heightened sensitivity to risk, the GCC, as a destination for foreign investment has benefited from a combination of relatively high hydrocarbon prices, buoyant economic growth and an ambitious programme of government-sponsored investment projects. The region also regularly accounts from more than 50 percent of all FDI to the Middle East and North Africa.
In the UAE and Kuwait, FDI inflows increased in 2012 to $9.6bn and $1.9bn, respectively. The 25 percent increase in FDI to the UAE over the previous year was further evidence of the recovery in Investors’ appetites after the Dubai World debt crisis. In Kuwait, the doubling of FDI was primarily the result of Qtel’s (Ooredoo) acquisition of additional shares in the mobile operator Wataniya.
GCC FDI flows have also been facilitated by the significant improvements made by individual countries in the ease of doing business. Saudi Arabia and the UAE, for instance, ranked 22 and 26 in the world, respectively, have made positive strides in reforming the procedures, costs and time taken to start a business, trade across borders and deal with construction permits.