Foreign direct investment inflows to Arab countries and the world declined by 3 percent and 12.3 percent respectively in 2022 to reach $54 billion and $1.3 trillion, according to the Arab Investment and Export Credit Guarantee “Dhaman,” a multinational organization that provides guarantee services against commercial and non-commercial risks in Arab countries. According to a statement on Thursday, Dhaman cited the ongoing Russian-Ukrainian conflict and its effects on the international economy, rising inflationary pressures, and tightening financial conditions globally as the causes of the fall. According to the organization’s annual report, the Arab world accounted for 4.2 percent of global investment inflows and 6 percent of investment inflows to developing nations in the past year. Detailing the countries where Arab countries saw inflow of investments, the organization said that the United Arab Emirates (UAE) attracted $22.7 billion, or 42.3 percent, followed by Egypt with $11.4 billion, or 21.2 percent, Saudi Arabia with $8 billion, or 14.7 percent, Oman with $3.7 billion, or 6.9 percent, Morocco with $2.1 billion, Bahrain with $2 billion and Mauritania with $1.1 billion. Dhaman’s report also pointed out that foreign direct investment balances pouring into Arab countries increased by the end of last year by 4.4 percent compared to 2021, exceeding $1 trillion, according to data from the United Nations Conference on Trade and Development (UNCTAD). According to the UNCTAD data, three Arab countries accounted for more than 57 percent of the total cumulative balances incoming to the Arab region, with Saudi Arabia topping the list with a volume of balances amounting to $269 billion and a share of 25.2 percent of the overall balance, followed by the UAE with $194.3 billion, or 18.2 percent of the overall balance, and Egypt with $149 billion, or 13.9 percent of the overall balance. Conversely, foreign direct investment outflows from Arab countries plummeted by 54 percent in 2022 amounting to $23.3 billion driven by a downward trend in investment flows, recording negative values in three Arab countries, including Kuwait, which witnessed, according to the UNCTAD, the liquidation of external investments worth $25.6 billion. By the end of last year, foreign direct investment balances issued by Arab countries increased by 10.7 percent to $590 billion, to which 5 Gulf countries, namely the UAE, Saudi Arabia, Qatar, Kuwait and Bahrain, contributed 89 percent of the total balances issued by the Arab region. With regard to cross-border merger and acquisition deals witnessed by the Arab countries during the past year, the value of sales deals in nine Arab countries amounted to $36 billion, with a 5.1 percent share of the global total of more than $706 billion, namely in Saudi Arabia, Bahrain, the UAE and Egypt. On the other hand, the value of purchase deals in eight Arab countries amounted to more than $28 billion, of which Kuwait, the UAE, Saudi Arabia and Lebanon contributed more than 96 percent of the total.
Source: Jordan News Agency