UN report: Bahrain leading Arab world in DFI

Published October 24th, 2000 - 02:00 GMT

Bahrain is proving its mettle as an investors’ haven, attracting a total of $810 million worth of foreign direct investment from 1997 through 1999, making it the leading country in the Arab world in this category. Direct investment in the Bahraini economy amounted to $329 million in 1997, $181 million in 1998 and $300 million in 1999. 


Bahrain’s new-won status was revealed last week at a press conference at the Bahrain Chamber of Commerce to launch the ‘World Investment Report 2000: Cross-Border Mergers and Acquisitions and Development’, prepared by the UN Conference on Trade and Development (UNCTAD). 


At an average of 107.3 percent between 1996 and 1999, the inflow of foreign direct investment into Bahrain, as a percentage of total capital inflow, was also the highest the Arab region. In 1996, the foreign direct investment inflow as a percentage of gross capital formation got as high as 271.1 percent but in 1998 it slipped to 20.8 percent. 


According to Dr. Faysal Abdel-Gadir, the UN resident coordinator in Bahrain and the UN development program resident representative, capital outflows from Bahrain stood at 21 percent of gross capital inflow into the economy. Outflows equaled $48 million in 1997, $181million in 1998 and $200 million in 1999. 


"FDI inflows and outflows in Bahrain are relatively high, not only in comparison to the region but also worldwide, including developed countries," said Abdel-Gadir, quoted in the Egyptian Gazette.


Bahrain's inward stock, comprising of investment portfolios of mainly offshore firms stood at $5.3 billion in 1999, up from $5 billion a year earlier. According to Abdel-Gadir, foreign direct investment inward stock values in Bahrain have increase significantly over the past 20 years, although this rate of increase has slowed down over the past five years. 


Although cross-border merger and acquisition activities stood at $30 million in 1999, up from a mere $4 million in 1993, the UN report showed that cross-border merger and acquisition activity as being low in Bahrain, in comparison to values in other parts of the region. — (Albawaba-MEBG)

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