The UAE became the world’s 15th biggest recipient of Foreign direct Investment (FDI) in 2020, ranking one place above the UK and seven places higher than the prior year, according to the United Nations Conference on Trade and Development (UNCTAD).
Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Ruler of Dubai has recently stated that despite a 35 percent drop in global FDI flow last year, investment into the UAE grew 11 percent to about $20 billion.
According to UNCTAD’s World Investment Report, “Natural resources transactions fueled investments in the country citing $10 billion sale of a 49 percent stake in its natural-gas pipelines.”
In recent years, Adnoc’s (Abu Dhabi National Oil Company) approach of transferring cash linked to non-core assets has been a key driver of international investment into the UAE. It raised $5 billion in 2019 for its oil pipelines, while a $10 billion sales of a 49 percent interest in its gas pipes network last year attracted capital from a variety of sovereign and institutional infrastructure investors.
In UNCTAD’s study , medium and high-tech sectors accounted for 53 percent of FDI into Dubai in the first half of last year. CCL Pharmaceuticals of Pakistan is one among the investors and had purchased a majority stake in Dubai’s StratHealth Pharma.
“The UAE has boosted its competitive position through reforms such as 100 percent foreign ownership of onshore companies and measures designed to attract foreign talent, as well as setting out ambitious growth plans to diversify the economy,” Scott Livermore, chief economist at Oxford Economics, said.
According to the report, the country was also the 13th largest investor with a $19 billion FDI outflow as prominent investors such as International Holdings Company invested in Sudan’s agricultural sector and Mubadala invested $201 million in Uzbekistan’s energy industry.
Saudi Arabia also managed to increase FDI inflows by 20 percent to $5.5 billion last year. Saudi Aramco recently closed a $12.4 billion deal to sell a 49 percent stake in its oil pipeline business to a consortium managed by EIG Global Energy Partner.
