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Investment Boom in the UAE: Sheikh Mohammed’s Vision for an Ideal Investment Environment

Posted by Luxury Link Properties on June 25, 2024

Investment Boom in the UAE: Sheikh Mohammed’s Vision for an Ideal Investment Environment

Despite a decline in global foreign direct investment (FDI) in 2023, the UAE experienced a remarkable 35% increase in FDI flows last year, totaling approximately Dh112 billion. This achievement positions the UAE as a leading destination for investors worldwide.

In 2023, the UAE ranked second globally after the United States in terms of new foreign direct investment projects. It also claimed the top spot in the Arab world, West Asia, and the Middle East for both inbound and outbound investments. Overall, the UAE is now ranked 11th globally in terms of foreign investment, well on track to meet the government’s 2030 target.

Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, highlighted these achievements in a recent X post. He reacted to the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2024, which was released on Thursday.

According to the UNCTAD report, which covers more than 200 economies worldwide, global FDI fell by 2 percent to $1.3 trillion in 2023 amidst a global economic slowdown and rising geopolitical tensions. The report noted that the decline would have been 10 percent when excluding a few European conduit economies that registered large swings in investment flows.

FDI flows to developing countries fell by 7% to $867 billion, while tight financing conditions resulted in a 26% drop in international project finance transactions. The report highlighted that crises, protectionist policies, and regional realignments are disrupting the world economy and fragmenting trade networks, regulatory environments, and global supply chains.

Despite these challenges, UNCTAD noted that modest growth in FDI is possible this year, driven by easing financial conditions and investment facilitation efforts in both national policies and international agreements.

World Invests in the UAE

In his tweet, Sheikh Mohammed said, “Many around the world are betting on the UAE with their investments, talents, and their wealth. We tell them: Whoever bets on us, we will bet on them. God willing, we will continue to create the best investment environment in the world.”

UNCTAD noted that investments are growing in several global value chain-intensive manufacturing sectors like automotive and electronics in regions and countries with easy access to major markets. However, many developing countries remain marginalized, struggling to attract foreign investment and participate in global production networks.

UNCTAD called for countries to promote investment by creating a transparent and streamlined environment through business facilitation and digital government tools. It also urged institutional investors to boost FDI flows to infrastructure projects, especially in developing countries, to support long-term economic growth and stability.

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