Foreign direct investment (FDI) into the United Arab Emirates (UAE) grew by 44.2 percent in 2020 compared to 2019 and reached to a total of $19.88 billion. The positive results come amidst the reeling impact of the COVID-19 pandemic on the volume of global investment and trade and on the world economy in general. The increase brought the cumulative balance of FDI inflows to about $174 billion, achieving a growth of 12.9 percent compared to the same period in the previous year. The investments included all sectors and economic activities, with majority of the activities led by the oil and gas sector. The Abu Dhabi National Oil Company (ADNOC) concluded huge investment deals and partnerships with several foreign companies which contributed to achieving this growth. Investments have also been robust on modern technologies which underpin the digital economy, such as artificial intelligence, the Internet of Things, blockchain, innovative medical technologies, high-speed transportation, augmented virtual reality, robotics, autonomous cars, renewable energy, innovation, technology, agriculture, among others. Meanwhile, the UAE's outward investments flow reached up to $9.2 billion in 2020, which showed to be highly performing in regional and international markets. Various vital economic sectors with major strategic investments have revealed sustainable results. These UAE companies have contributed to improving the competitiveness of the country especially in advanced industries and services, such as aviation, air transport services, transportation, and mining. In addition, these companies also made major progress in their investments in renewable energy, real estate and construction, communications and information technology, oil and natural gas, conventional energy and renewable energy, logistics, ports and infrastructure, tourism and hospitality as well as entertainment and aviation sectors, banking and the agricultural sector. Abdulla Bin Touq Al Marri, UAE minister of economy, said: "The UAE's economic and investment market has further advanced its ranking globally and has kept its leading position across the region. Thanks to the directives of our wise leaders, the UAE continues to improve its ranks in global indicators for foreign investment inflow and ease of doing business, confirming the success of the government's strategies towards making the country an attractive investment destination." "This is being done through an integrated system of policies and procedures, including the updating of economic legislations and regulatory frameworks. Government continues to launch support initiatives aimed at improving the performance of different sectors to stimulate growth of the national economy and accelerate the pace of its recovery. "We will continue to develop initiatives that will raise the efficiency of the investment environment, increase opportunities, especially in priority sectors, enhance the confidence of investors and businessmen, and work to unify efforts at both federal and local levels to consolidate the country's position and competitiveness regionally and globally." Bin Touq reiterated the UAE's progress in global indices for attracting foreign investments, reflects the positive outlook and confidence of investors, which stem from the government's strong commitment to economic diversity, innovation, infrastructure, and ease of doing business. He added that these factors have been proven to be the source of resilience and stability of the country's economy and its ability to overcome today's global economic challenges, as well as its efficiency and speed in coping with and tackling emergencies, crises and global changes. Dr. Thani Bin Ahmed Al Zeyoudi, minister of state for foreign trade, said: "The UAE's leading position in global indicators to attract foreign direct investment was not a coincidence, but rather the product of a clear vision of our wise leadership to make the UAE the most preferred investment destination. "These are visible in the policies adopted by the UAE for developing foreign direct investment and in its strategies, which enhance its leadership in attracting significant investments. These investments are directed at supporting our development plans focused on innovation, knowledge, technology and the digital economy, in accordance with the National Agenda 2021 and the UAE Centennial 2071." Al Zeyoudi further emphasized that the country's success in attracting FDIs is testament to the confidence of the international investment community in the country's business environment. It also confirms the UAE's sound policies and openness to enhance trade and investments, such as the recent amendments to the Commercial Companies Law. These changes are expected to bring about positive long-term impact on the flow and quality of foreign and domestic investments and the overall economic growth process of the country. He added that the new amendments further boost its competitiveness in attracting more foreign investments in new economic sectors, while also contributing to diversifying and developing businesses in the non-oil segments. It will also enhance the development of market movement, create new job opportunities, develop skills of professionals, as well as strengthen the confidence of foreign investors, and thereby providing greater opportunities for national and foreign investors to establish strong partnerships, he remarked. The UAE has climbed up by three ranks in attracting FDIs in 2018 and made it to the 24th ranking globally in 2019. It ranked first in the Western Asian region in attracting FDI, gaining 49.4 percent of the total inflow of foreign investment across West Asia in 2019. The country has maintained its 19th position in the world for outflows of FDI to other countries, according to the United Nations Conference on Trade and Development's (UNCTAD) World Investment Report 2020. The balance of FDI coming into the UAE until the beginning of 2020 is distributed according to continents and their relative importance as follows: Asia, Europe, followed by North America, and then Africa. In terms of countries, the United Kingdom and Northern Ireland comes in first, followed by India, China, and British Virgin Islands. Saudi Arabia comes at fifth, followed by Switzerland, France, Netherlands, the United States of America, and Japan. In terms of sectors, the balance of direct investments into the UAE were distributed in the following: wholesale and retail trade as well as repair of vehicles and motorcycles were the leading among the sectors while real estate activities ranked second. Financial and insurance activities ranked third, followed by mining and quarrying. The manufacturing industry ranked fifth, followed by the construction sector at sixth and then the professional, scientific and technical activities. Other sectors followed accordingly such as electricity, gas, steam and air conditioning supply, followed by transportation and storage, and lastly, information and communications technologies. The UAE currently ranks first in the Arab world and in the region and 15th globally in the Kearney FDI Confidence Index for 2021. It advanced by four ranks compared to 2020, surpassing several major global economies such as Singapore, Australia, Portugal, Denmark, Ireland, Brazil and Finland in the general ranking of the index. — SG
