The Foreign Investment Office (FIO), an agency of the Dubai Department of Economic Development (DED), has commissioned an in-depth special study to further enhance the competitiveness of the economy. The preliminary findings of the report which surveyed more than 1,000 global and regional investors highlight that investors have confidence in Dubai as a destination for foreign direct investments (FDI) and as the FDI hub for the wider Middle East and North African (MENA) region.
The preliminary findings identified that an impressive 54% of the participants in the survey already have a presence in Dubai and an additional 16% of global and regional investors plan to enter Dubai in the next three years. Most of these global companies look to Dubai as an essential part of their total value chain to access the attractive markets of the MENA region, maintaining their most vital and strategic activities in Dubai.
The broader MENA region has an expanding labor force and growing consumer market of around 1.7 billion individuals. It is characterized by a young and vibrant population where the majority of the population is below 25 years of age. The International Monetary Fund (IMF) predicts that the region will post a gross domestic product (GDP) growth rate of 5.5 per cent – all factors that make the MENA region attractive for foreign investors.
The past decade has brought dramatic growth in FDI flows into the Middle East. FDI in the Gulf Cooperation Council (GCC) region has grown from US$3 billion in 2000 to US$62 billion in 2008, according to the United Nations Conference on Trade and Development (UNCTAD). Total inflow to the UAE was US$21 billion in 2008, according to FDI Intelligence – an indication of investor confidence.
"The confidence in Dubai as a hub for FDI to the MENA region and the positive growth outlook for the regional markets is encouraging. It highlights the Emirate's ability to rebound and become a world leading FDI destination for global investors," said Mr Fahad Al Gergawi, CEO, FIO.
According to the investors interviewed, Dubai has reached the next level of economic maturity and attractiveness. Their outlook is based on Dubai's ability to build a strong infrastructure as well as its prevailing business savvy approach and innovation. Investor confidence in Dubai is based on its history of delivering strong performance across several sectors.
The achievement of Dubai is supported by the 2010 A.T. Kearney FDI Confidence Index report where UAE scored first as a country, and Dubai stands out as the preferred FDI destination in the Middle East for the ease of doing business, access to best-in-class infrastructure, advanced logistics facilities and safe environment. The investors consider Dubai as a gateway destination to the MENA region.
"The Dubai Foreign Investment Office (FIO) will continue to roll-out actions to sustain the strong investor confidence in Dubai as a regional hub. We will seek to attract additional investors through targeted efforts," said Mr Al Gergawi.