Survey finds the country will draw the most foreign direct investment in the Middle East.
UAE most popular investment location for multinationals in the region
The UAE will be the most popular investment destination for multinationals based in the GCC and Egypt over the next 12 months, according to a survey on Middle East investment objectives by a leading accounting firm. In a series of surveys conducted this year, KPMG International investigated the future direction of capital flows both globally and in specific regions of the world. In a survey focusing on investment intentions among a group of large companies based in the Middle East and Egypt, 50 senior corporate investment strategists based in Saudi Arabia, Kuwait, UAE, Oman, Qatar, Bahrain and Egypt were asked where in the world, other than their own country, they plan to invest during the next 12 months. The UAE came out on top with 26 per cent. The services and manufacturing sectors in the UAE were of particular interest to investors, with respectively 62 per cent and 38 per cent of respondents ranking those sectors as the most lucrative.
When it comes to the long term, companies in the region are more ready to look elsewhere for investment opportunities. "Middle East companies are currently focusing on their own region, but five years down the road they are looking at other countries such as India and China," said Ashok Hariharan, a partner at KPMG. Qatar and India followed the UAE in the polls for the next 12 months; however, in five years' time, India is the clear leader, with 34 per cent of investors planning to invest there. Under the five-year timescale, the UAE comes in second with 22 per cent planning to invest and China is third with 16 per cent, according to the survey.
The survey also indicated that Saudi Arabia was the most influential country in the region, but the UAE was catching up fast. "The most influential country in terms of investments is Saudi Arabia, which is not surprising considering the amount of wealth contained in the country. What was striking is that the UAE will compete with Saudi Arabia, and five years down the road it will be on equal footing with Saudi Arabia," said Mr Hariharan.
He added that in the wider global context, India and China will be the dominant players, and their influence will have an impact in the Middle East. This is the first time the survey has been conducted in the Middle East and is KPMG's attempt to quantify the shift in capital flows as growing economies command more investment appeal. email@example.com