UAE Investment Thrives: Sheikh Mohammed Vows to Maintain Prime Investment Climate

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UAE’s Remarkable Surge in Foreign Direct Investment: A Testament to a Thriving Economy

Despite a global decline in foreign direct investment (FDI) in 2023, the UAE witnessed an impressive 35% increase in FDI flows last year, amounting to approximately Dh112 billion. This surge underscores the nation’s growing appeal as a prime investment destination.

In 2023, the UAE secured the second position globally, following the United States, in terms of new foreign direct investment projects. It also ranked first in the Arab world, West Asia, and the Middle East for both inbound and outbound investments. Currently, the UAE holds the 11th position globally for foreign investment, steadily advancing towards the government’s 2030 target.

These achievements were highlighted by Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, in a recent post on X. He referred to the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2024, which was released on Thursday.

The UNCTAD report, which covers over 200 economies, indicated that global FDI fell by 2 percent to $1.3 trillion in 2023 due to an economic slowdown and rising geopolitical tensions. The report also noted that the decline would have been 10 percent excluding significant fluctuations in investment flows in certain European conduit economies.

FDI flows to developing countries decreased by 7% to $867 billion, and tight financing conditions resulted in a 26% drop in international project finance transactions. The report highlighted that crises, protectionist policies, and regional realignments are disrupting the global economy, fragmenting trade networks, regulatory environments, and supply chains.

Despite these challenges, UNCTAD pointed out that modest growth in FDI is possible this year, driven by easing financial conditions and investment facilitation efforts in both national policies and international agreements.

Investing in the UAE

In his post, Sheikh Mohammed stated in Arabic: “Many around the world are betting on the UAE with their investments, talents, and wealth. We tell them: Whoever bets on us, we will bet on them. God willing, we will continue to create the best investment environment in the world.”

UNCTAD also observed that investments are growing in several global value chain-intensive manufacturing sectors, such as automotive and electronics, in regions with easy access to major markets. However, many developing countries continue to struggle to attract foreign investment and participate in global production networks.

To promote investment, UNCTAD called for the creation of transparent and streamlined environments through business facilitation and digital government tools. It also urged institutional investors to boost FDI flows to infrastructure projects, particularly in developing countries, to support long-term economic growth and stability.

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