Strong investor incentives push UAE higher in FDI confidence index

Investors highly optimistic regarding UAE's economic outlook: Kearney

  
Dubai Marina skyline,UAE. Image used for illustrative purpose.

Dubai Marina skyline,UAE. Image used for illustrative purpose.

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The UAE now ranks 15th globally in Kearney’s 2021 Foreign Direct Investment (FDI) Confidence Index, up from 19th place last year, thanks to its strong enabling environment, featuring advanced technological infrastructure and high innovation levels.

The UAE is one of only five countries globally that achieved a higher ranking this year in an increasingly competitive global FDI attraction environment, Kearney said. Its business environment demonstrates continued strengths in factors most important to investors, including government incentives for investors.

According to the new report from the global strategy and management consulting firm, investors say 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 & North Africa generally remained stable.

Optimism levels regarding the economic outlook for the UAE scored higher in relative terms than those documented last year, placing it among the top 5 countries in terms of net optimism.

Rudolph Lohmeyer, partner, National Transformations Institute, Kearney Middle East said: “The UAE was among the first countries to approve a COVID-19 vaccine, and it has embarked on an extremely ambitious campaign to vaccinate its whole population by the end of 2021. Behind only Israel and the Seychelles, the UAE has vaccinated the highest portion of their population (per 100 people), which can be expected to boost economic and investment prospects further.”

“The UAE continued to engage beyond its borders this year – with the signing of the Abraham Accords in August signaling the UAE’s commitment to regional stability and economic integration. Expo 2020, which was postponed to October 2021, should further contribute to the resurgence in tourism, including from Israel, in the latter part of the year,” he added.

Commenting on the 2021 FDI Confidence Index, Paul A. Laudicina, founder of the index and Kearney’s Global Business Policy Council said: “A year into the pandemic and its severe disruption to the global economy, investors understandably appear chastened. In last year’s survey, investors displayed a strong level of optimism about the global economy and their investment outlook, and many were caught flat-footed by the COVID-19 disruption that brought the world to an economic standstill.”

There are only three emerging markets in this year’s Index: China, the UAE, and Brazil. China remains the highest-ranked emerging market, a distinction the country has held consistently since 1999. However, concern over escalating US–China trade tensions and a more general corporate rethink of international supply chains could explain its drop to 12th place, Kearney said.

(Writing by Brinda Darasha; editing by Daniel Luiz)

brinda.darasha@refinitiv.com

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© ZAWYA 2021

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