Dubai still top FDI destination

8. February. 2010
ArabianBusiness

A new report -last week- has concluded that Dubai remains the most attractive city in the Middle East for Foreign Direct Investment (FDI), despite the recent speculation over the emirate’s ability to pay its debts.

According to management consulting firm AT Kearney, its recent FDI Confidence Index ranked the UAE as the 11th preferred FDI country destination globally, supported by the city rankings of Dubai, which came first in the region, and Abu Dhabi, which was in second place.

The Index is constructed using primary data from a proprietary survey administered between October and December 2009 to senior executives of the world’s leading corporations. The respondents were selected from the Global 1,000 population as determined by 2009 revenues, and the largest corporations in emerging economies.

“This survey addressed leading international investors’ plans and their concerns in the context of today’s global issues and analyzed their key criteria for selecting future investment destinations,” said Dr Dirk Buchta, vice president and managing director of AT Kearney Middle East. “These results indicated that Dubai is considered a regional success and investors rank it as their number one investment location in the Middle East.”
 
In the study, global investors pointed to Dubai’s unique location, infrastructure and value proposition as a hub to access the regional market. In addition the city scored highly in the ‘ease of doing business’ category.

Being ranked amongst the top 25 FDI destinations identified in the report means potential access to approximately 70 percent of the global FDI inflows.

“The high FDI confidence ranking of Dubai indicates that the emirate is seen as one of the prime access points and gateway for FDI into the Middle East and beyond,” said Matthieu De Clercq, senior manager at AT Kearney Middle East.

Despite recent events surrounding the global financial crisis, the survey found that the vast majority of investors have no plans to reduce their investments in the city. More than 80 percent of all investors surveyed, which have or have planned investments in Dubai, either plan to maintain the current level of investment or further increase their investment levels in the next three years.

Investors with regional experience did point to several challenges for further FDI growth in Dubai, including cross-cultural challenges, corporate governance, transparency and availability of business data.

“Dubai is regarded a catalyst for the region and while there are still opportunities to excel, the study’s results are significant and indicate that Dubai is the destination of choice for regional FDI and has the strength and talent to rebound against the international economic downturn,” added Dr Buchta.