Qatar tops world in BMI index for investment attractiveness |
Gulf Times - 03 February, 2017
Qatar has topped the regional as well as global infrastructure Risk/Reward Index (RRI) league tables set by BMI Research on the back of the country’s infrastructure project pipeline stocked with numerous high-value projects related to the FIFA 2022 World Cup and its strong construction industry real growth forecasts.
Qatar, which is followed by the UAE in the RRI table, offers strong construction industry growth, stable political systems and an open business environment in which it is “relatively easy” to operate in as an international construction company, the Fitch Group company has said in a report yesterday.
On the region’s performance, BMI Research said the Gulf Cooperation Council (GCC) infrastructure markets offer the best balance of strong opportunities and low risk business environment regionally and globally. This is reflected in their dominance of the top spots of the new RRI league tables both for Middle East and North Africa (Mena) and on a global level.
The GCC markets occupy the top six positions within the Mena RRI table.
Beyond the GCC in Mena, strong rewards are on offer in Egypt, Iran and Morocco on the back of solid growth and industry size belies high operational risks, while Iraq, Libya and Yemen that are locked in conflict languish at the bottom of the regional table.
However, Mena underperforms on both industry risks and country risks, indicative of often opaque and business environments – most notably in non-GCC countries – as well as elevated political risk across many markets.
“Reflecting a range of systemic economic and political risks in the region, ranging from uncertain lines of succession, embedded terrorist threats and conflict, to painful economic realignments in the face of lower for longer oil prices, Mena has the second lowest regional average country risk score globally, ahead of Sub-Saharan Africa,” BMI said. BMI said it has overhauled its infrastructure RRI methodology to “more accurately capture the different elements that impact the overall investment attractiveness” of a country’s infrastructure sector.
BMI has increased the number and variety of indicators that make up the final index score and re-assessed the weightings of the reward and risk indicators to “ensure the most accurate reflection” of the risk/reward environment is reflected through its matrix.
The RRI uses a combination of BMI’s proprietary industry forecasts and analyst assessment of the regulatory climate.