Arab world FDI flows decline by 37.4% in '11 |
Saudi Gazette - 24 August, 2012
Inter-Arab direct investment reached $ 6.82 billion in 2011, official data received from 5 Arab countries – Algeria, Egypt, Jordan, Tunisia, and Yemen – compared with $ 12.5 billion received by 10 Arab countries in 2010, the Arab Investment & Export Credit Guarantee Corporation (Dhaman) – an autonomous Arab regional organization – annual report "Investment Climate in Arab countries 2011" said.
The report showed that during the past 17 years (1995-2011), accumulated inter-Arab FDI inflows reached $ 178.5 billion, of which 82 percent ($ 144.4 billion) was directed toward 7 Arab countries; Saudi Arabia, Sudan, Egypt, Lebanon, Algeria, Bahrain and UAE.
The report noted a decline of 37.4 percent for FDI inflows to Arab countries (21 countries) reaching a total value of $ 43 billion in 2011, compared with $ 68.6 billion in 2010.
It attributed the decline to the ongoing political and social events which have been taking place in the region since the end of 2010, and also to the repercussions of the global economical and financial crisis.
Global FDI inflows increased during the year 2011 to reach $ 1.5 trillion, dropping the Arab countries’ share of it from 5.2 percent in 2010 down to 2.8 percent in 2011.
The FDI inflows increased in 9 Arab countries, namely, Algeria, Bahrain, Djibouti, Iraq, Jordan, Kuwait, Morocco, Palestine, and UAE. On the other hand, FDI inflows decreased in 8 countries – Lebanon, Mauritania, Oman, Saudi Arabia, Somalia, Sudan, Syria, and Tunisia. Three countries – Egypt, Qatar and Yemen – reported negative FDI inflows in 2011.
Saudi Arabia ranked first among Arab countries as the larg
est host country for FDI inflows, with $ 16.40 billion and a 38.2 percent share of the total Arab FDI inflows for the year 2011, followed by the UAE with $ 7.68 billion and a 17.9 percent share, Lebanon in third place with $ 3.38 billion and a 7.9 percent share, Sudan fourth with $ 2.69 billion and a 6.3 percent share of the total Arab FDI inflows in 2011.
On Arab countries cross border mergers & acquisitions, the report showed that they reached $ 9 billion in 2011, compared with a negative value of $ 9.8 billion in 2010.
According to Dhaman’s data received from official national sources in seven countries – Saudi Arabia, Egypt, Tunisia, Syria, Jordan, Libya, and Palestine – FDI stock inflows from 1990 – end of 2011 reached $ 189 billion, out of which, $ 122.7 billion went to Saudi Arabia with a share of 65 percent of the total, followed by Egypt with $ 26.4 billion and a share of 14 percent, Tunisia in the third place with $ 25.6 billion and a share of 13 percent.
In terms of geographical distribution of FDI stock from/in counterpart economy data, the report revealed that the US is the largest foreign investor in Arab countries, with an accumulated value of $ 26.1 billion and 14 percent share of the total, followed by France in second place with $ 19 billion and a 10 percent share, Germany third with $ 16.6 billion and a 9 percent share, United Kingdom fourth with $ 14.8 billion and a 8 percent share, followed by Japan in fifth place with $ 14.8 billion and an 8 percent share of the total.
In terms of sectoral distribution for FDI stock, the service sector was largest recipient of FDI since the early 90’s with a 43 percent share of the total, followed by the industrial sector ranked second with a 29.6 percent share, then the agriculture sector with only a 1.3 percent share.
The remaining 26.1 percent was distributed among other unclassified sectors and activities.