What makes the UAE the region’s fastest-growing investment destination?

From its strategic location at global crossroads and strong financial reserves and sovereign wealth funds to investment in major development and infrastructure projects, the UAE has been able to create a modern, dynamic and diverse economy in only 50 years.

It is, though, the desire to keep pushing forward and to keep extending the nation’s horizons that has ensured the UAE remains a global beacon for talent, innovation and endeavour, and a model environment for investment and entrepreneurship.

The UAE, for instance, ranked first regionally and ninth globally in the Global Competitiveness Report 2021 issued by the Global Competitiveness Center, and ranked first globally in 22 indicators. In a staggeringly short time, it has managed to redefine the limits of the possible.

The priority for the next 50 years is to continue accelerating economic development and unlocking opportunity, especially by encouraging small and medium-sized enterprises and instilling a culture of entrepreneurship throughout the country.

Global magnet for capital and talent

One of the key pillars of the UAE’s ambitions is to attract FDI in key sectors, particularly those associated with the knowledge economy and advanced technologies. Artificial intelligence, the Internet of Things, Blockchain, innovative medical technologies, high-speed transportation, augmented virtual reality, robotics, self-driving cars and renewable energy are all fields in which the UAE wants to excel in the immediate term.

Despite the UN’s figures that global foreign direct investment flows decreased by 42 per cent in 2020 over Covid-19, the UAE has seen 44 per cent growth in inward FDI flows in 2020, compared to 2019, to reach Dh73 billion. The UAE ranked first in the Arab world and 15th globally in terms of its ability to attract foreign direct investment, according to the results of the Global Foreign Direct Investment Report for the year 2021 issued by the United Nations Conference on Trade and Development. It attracted FDI of $19.9 billion in 2020, a growth of 11.24 per cent over 2019, despite the pandemic.

The UAE also ranked first in the West Asia region, receiving 54.4 per cent of the total FDI inflows, amounting to $36.5 billion, and first in the Mena region, receiving 40.2 per cent of the total FDI inflows, amounting to $49.4 billion.

The forecast is healthy, with the flexibility and attractiveness of the UAE’s business environment, and the constant update of provisions and procedures to meet global standards, keeping the capital inflows coming.

Another sign of the positive investment climate is the UAE’s GDP, which totaled $421 billion in 2020, despite the global pandemic. Per capita GDP rose to $43,100, exceeding that of countries such as the UK, Spain, New Zealand and France.

Solid economy despite adversities

The UAE’s ability to recover from the pandemic owes much to the prompt, nationwide action taken in March 2020, and the efficacy of sanitation, lockdown and social distancing measures deployed in the weeks and months that followed. In economic terms, the Central Bank’s comprehensive support was equally crucial, contributing some Dh100 billion and a range of support packages to the economy. As a result, the UAE ranked first in the Arab world and second globally in the “Resilience to Epidemics 2021” index, issued by the Consumer Choice Center to rate nations’ response to the onset of Covid-19.

The UAE Central Bank now estimates that positive growth rates for the national economy will be restored by the end of 2021, with estimates of up to 2.5 per cent growth in real GDP, and 3.6 per cent growth in real non-oil GDP. In 2022, this will reach 3.5 per cent growth in real GDP, and 3.9 per cent growth in real non-oil GDP.

The government is working with all stakeholders to double the national economy over the next 10 years to reach Dh3 trillion by 2031.

An ideal industrial base

business@khaleejtimes.com