RIYADH – Saudi Arabia was one of the top 10 most attractive countries in the world for Foreign Direct Investment (FDI) in 2009 with inflows reaching $36 billion, according to the World Investment Report (WIR 2010) released Thursday.
The report put the Kingdom at number eight in the world, and first among Arab and Middle East nations, with the USA, China and France leading the way globally.
“None of the countries in the Middle East came near to Saudi Arabia in terms of FDI inflows,” said Taffere Tesfachew, Chief of the Office of the Secretary-General, Strategy and Policy Coordination Unit of the United Nations Conference on Trade and Development (UNCTAD).
Releasing the report, Tesfachew said that UNCTAD endorsed the Saudi Arabian General Investment Authority (SAGIA) deadline to top the charts by 2010 and praised its role in creating an environment conducive to investment in the Kingdom. SAGIA has been striving since 2004 to place the Kingdom among the top 10 most competitive nations in the world.
The sources of largest FDI inflows into the Kingdom in 2009 were revealed as the USA with $5.8 billion, Kuwait with $4.3 billion, the UAE with investments valued at $3.8 billion, France with $2.6 billion, and Japan with $2.0 billion.
Much FDI into Saudi Arabia in 2009 was destined for high-tech projects and services, but inflows generally covered a wide range of economic sectors such as real estate investment and infrastructure, building contracts, banking and insurance, quarrying, mining, oil and gas exploration, transportation, telecommunications and information technology.
The 2009 inflows, however, were lower by 5 percent than the 2008 FDI inflows of $38.1 billion, a fall reflected in all the region’s main recipient countries with the exception of Qatar and Lebanon.
According to SAGIA, net FDI inflows contributed to raising the internal FDI stock value to $147.1 billion by the end of year 2009.
“These levels of FDI inflows, although high, are still below the aims of SAGIA, taking into consideration the great potential of the Saudi economy, its developed infrastructure and investor-friendly laws,” an official said.
On FDI outflows from West Asia, Tesfachew said that they decreased by 39 percent in 2009 to $23 billion, mainly due to a fall in outflows from the United Arab Emirates from $16 billion to $3 billion.
“Investment policy measures taken in the West Asia region in 2009 have generally improved the conditions for foreign investment,” Tesfachew said. “A number of countries in the region reduced the tax rate in order to stimulate the economy across the board or in specific sectors or regions.”
The United States topped the WIR 2010 list with its 2009 FDI of $130 billion, followed by China ($95 billion), France ($60 billion), Hong Kong (China, $48 billion), the United Kingdom ($46 billion), Russian Federation ($39 billion), Saudi Arabia ($36 billion), India ($40 billion), and Belgium ($34 billion). – SG