GCC's foreign direct investments (FDI) into the European Union jumped €2.3 billion to €63 billion in 2008, EU's statistical office Eurostat said. Foreign direct investments in the GCC from the European Union countries surged to €4.6 billion in 2007 to €18.9 billion in 2008, the Eurostat said. Luxembourg was the largest recipient of GCC FDI at €59.3 billion. FDI from the GCC made up 31.8 percent of total FDI inflows into the EU in 2008, the second-biggest by a regional bloc. FDI worth €65.8 billion from North America to the EU made up 33.1 percent. The major recipient of FDI in the GCC was Saudi Arabia where FDI inflow reached $38.3 billion in 2008, an increase of 57.2 percent. On a compound annual growth rate basis, FDI inflows to Saudi Arabia increased 117.9 percent during 2003-2008 which shows the country's efforts to diversify, the report said. The UAE was ranked second among GCC as it received FDI inflow of $13.7 billion in 2008, a 3.4 per cent decrease from the previous year, it added. Saudi Arabia and UAE account for 81.9 percent of the total $63.4 billion FDI inflow in GCC. Qatar recorded a huge increase in FDI inflow last year, thanks to the governmental policies to easy regulations on foreign participants. In Bahrain, FDI inflows reached $1.7 billion in 2008, up 2.2 percent from 2007. In Qatar, foreign inflows were directed to investments in the LNG, power, and telecommunication sector, the report said. Kuwait and Oman witnessed a drop FDI inflow despite easing limitation on foreign participation. The UAE was the biggest GCC investor in Luxembourg. The UAE's direct investment was €58.5 billion. Qatar came second (€641 million), Saudi Arabia (€134 million), Bahrain (€110 million) and Kuwait with €23 million. Luxembourg was also the largest EU investor in the GCC at €12.7 billion, followed by Denmark (€1 billion), the UK (€867 million), France (€711 million) and Germany (€236 million). A previous report by Saudi American Bank said over the five years ended June 2008, the cumulative acquisition of foreign assets by the GCC exceeded $900 billion. Favorite investment destinations for GCC capital flows have been Europe, the Middle East and North Africa, and East Asia. In its report, Global Investment House said foreign direct investment in the GCC said grew 57.2 per cent during the period 2003-2008 on a compound annual growth rate basis. Continuous and new reforms have taken place in the GCC for the past two decades to promote FDI and create a favorable legal environment for foreign investors,” World Investment Report study said.
