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UAE Climbs the Ranks as an FDI Destination While CEO Expects a Healthy Fiscal Position in Qatar and Building Plans in Saudi Set to Generate Over SAR 16 Trillion


Middle East : 08 July 2013

UAE Moves Higher in the Ranks for FDI Destinations

The UAE continues climbing the rankings listing the leading foreign direct investment destinations, driven mainly by a solid infrastructure, prime location and tax free climate and according to a recent report by A.T. Kearney.

Based on the findings of the Global FDICI, the UAE has risen one rank to reach 14th place in the world listing of FDI destinations. The ranking places the UAE above Spain, Switzerland and South Africa.

United States nabbed the top spot, with China and Brazil following in second and third, Canada in fourth and India in fifth place.

This index has been conducted on a regular basis over the past 15 year and serves as a gauge measuring sentiment among senior level executives in the world’s largest organizations.

According to A.T. Kearney’s report, the UAE experienced 40 percent higher inflow levels in 2011, reaching $7.7 billion. The FDI inflow levels may see further expansion as the Emirates lighten up on current foreign ownership regulations. A new UAE law allowing expanded foreign ownership is expected, meaning individual foreigners will be able to own 50 percent or more of companies located outside of free zones.

A.T. Kearney Middle East partner Anshu Vats noted that the UAE remains strong in hospitality, tourism and logistics, attracting significant regional investment. As the UAE foreign ownership laws loosen, the FDI levels should increase, according to Vats.

Analysts note that the entire Middle East, including but not exclusive to the UAE, displays many positive qualities that attract investors, including solid fundamentals and strong demographics. An earlier Ernst & Young report noted that the FDI project levels rose by 7.8 percent across the region in 2011.

The young and wealthy population of this region, along with the combination of significant natural resources, rising oil prices and sizeable budget surpluses in oil exporting nations, have allowed governments in the Middle East to boost infrastructure spending and efficiently move diversification efforts forward, according to the Ernst & Young report.

Around one third of respondents committed to a “wait and see” approach in terms of FDI. A.T. Kearney chairman emeritus Paul Laudicina noted that although some investors remain in a holding pattern established in the recession, optimism has risen and investors are “less jittery” than in past years.

Doha CEO Notes Healthy Expectations for Fiscal Position in Qatar

The overall fiscal position of Qatar is forecasted to remain healthy, with a surplus of 5.7 percent expected by 2016, according to Dr R Seetharaman, CEO of Doha Group. Qatar’s current account balance is also expected to remain at the high levels of 15 percent of GDP by 2016.

Economic growth in Qatar should reach almost 5 percent this year, as service activities account for over 60 percent of the overall economic growth, according to Seetharaman’s statements made in Vienna, Austria.

Segments like telecommunications, financial services and transportation are expected to experience expansion. The National Development Strategy stretching from 2011 to 2016 should address the challenges laid out the National Vision 2030. Expectations see aggregate GDP growth at 6.9 percent on average from 2012 to 2016, with hydrocarbon GDP growth at 4.4 percent and non-hydrocarbon GDP growth at 9.1 percent.

Seetharaman named Qatar as a “role model” in the Arab region.

He also noted that the IMF remains committed to assisting Arab nations to manage their economic transitions successfully, including lending, technical assistance and policy advice. A drive to establish strong, transparent fiscal institutions begins with technical assistance as they deal with public management of financial issues. Tax policies and the administration of a more equitable tax structure, as well as supervision of the banking industry and subsidy reform, remain good areas for technical assistance.

Building Projects in Saudi Arabia Set to Generate More Than SAR 16 Trillion in Investments

As SR 375 billion in construction projects move down the pipeline, Saudi Arabia continues to drive long term growth in MENA’s construction sector. This economic sector is expected to generate SR 16.125 trillion in investments by 2020.

The Saudi Arabian government is set to invest over SR 1.443 trillion in the economic and social infrastructure of the kingdom by 2014, as laid out in the Ninth Development Plan. Vocational schools, colleges and housing projects account for a good part of that spending.

A massive collection of investors, suppliers, industry professionals and decision makers are set to attend Saudi Build 2013. The latest technological advances in the industry will be showcased there, as well as business solutions for real estate agents, developers and contractors.

This year marks the silver anniversary for this construction fair, running at the Riyadh International Convention & Exhibition Center from November 4 to 7, 2013.

Riyadh Exhibition Company assistant general manager Zeyad Al-Rukban noted that Saudi Build remains the largest and most trusted networking platform within the kingdom’s construction sector. This event plays a vital role in the move towards a more diverse Saudi economy and unlocks new and exciting business and growth opportunities within the industry and in related sectors of the Saudi economy, according to Al-Rukban.

Over the last quarter century, Saudi Build has drawn major construction firms and international investors, solidifying Saudi Arabia as one of the leading and most lucrative construction markets in the world.

This year’s event is expected to outdo the 2012 results, where 812 exhibitors came from 34 nations to meet with 22,649 visitors moving through a 26,000 square meter exhibition space.

Saudi Build is accredited by UFI, an association that grants certification to leading professional events and exhibitions. Saudi Build 2013 is sponsored in part by Rajhi Steel, and offers information and displays on products and services relating to several aspects of the construction industry, including building materials, equipment, architectural finishing, stone, granite and marble products, tools, technology, engineering, and security and safety systems.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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