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Cairo – Corona’s repercussions have revealed new economic characteristics for the Arab region, and that it is still a safe haven for investment and capital seeking global growth, despite the ensuing conflicts.
The indicators of the Arab Corporation for the Guarantee of Investment and Export Credit (Guarantee) monitored the characteristics of this phenomenon and indicated that foreign investments are mainly concentrated in the United Arab Emirates, Saudi Arabia and Egypt.
Companies from 14 countries invested in the Arab region during the first quarter of this year, and the list of top 10 investing countries in the region included Japan, the United States, France, the Philippines, Belgium, Saudi Arabia, Germany, Bahrain, China and India. . Official figures indicate that the share of these companies as a whole amounted to about 79.5 percent of the volume of investments destined for the countries of the Arab region.
The savings on investments of foreign companies coincide in the countries of the Arab region, despite expectations of a decline in capital expenditure of the 5,000 largest multinationals in the world.
The company expects foreign direct investment inflow rates to decline in the Arab region by between 21% at a low and 51% at a high this year.
Despite the slowdown in global investment flows, the Arab region has become a major destination for capital due to its consumer boom and its desperate need to develop a large number of its sectors that are still virgin full of enormous opportunities for business. investment.
The education, health, food, oil and gas and mining sectors are among the most important investment destinations, as are the venture capital sectors, interested in using technology to digitize transactions and services.
The number of new foreign direct investment projects in Arab countries dropped to 185 projects in the first quarter of this year, a decrease of 30 percent from the same period last year due to the pandemic.
But the feature of the investment slowdown went global in the days of Covid-19, but still flows across the various countries of the region, compared to its complete halt in the number of investment destinations around the world, which increases investment opportunities in the countries of the region Arab.
The multinational capitals intend the Arab region to fill the gaps in consumption there, or through production with the aim of re-exporting to other destinations and markets that enjoy preferential agreements with the countries of the region.
The pandemic has revealed a new dimension that increases the investment attractiveness of the Arab region, while the volume of investments issued by the countries of the region reached approximately $ 4.9 billion in the first quarter of this year.
This trend increases the chances of attracting investment to the region by encouraging Arab investments that export to foreign destinations to enhance joint cooperation opportunities in other countries in the region or in the same countries that export investments.
The top five Gulf investment destinations included Uzbekistan, Australia, South Africa, Saudi Arabia and Egypt, which reveal new investment potential for countries in light of the pandemic.
The UAE is the most important investor in the Arab region, in terms of project costs, which last year amounted to approximately 51.2 billion dollars
According to Daman, Saudi Arabia tops the list of major Gulf countries investing abroad with a 49% share, followed by the United Arab Emirates with a 38% share, Bahrain with around 10% and by Kuwait with about 1%.
Monitoring indicators of Arab capital movements and Arab investments exported abroad indicate that the shares of the UAE and Bahrain in total investments are increasing compared to the first quarter of 2019.
Gulf foreign investment is concentrated in five main sectors: coal, oil and gas, renewable energy, financial services, transportation and storage, food and beverage.
The number of Gulf projects exported to foreign markets has reached about 70, with investments equal to 4.9 billion pounds (about 308 million dollars), with a participation rate with foreigners of about 80 per cent of the total cost of project investment.
Among the 37 sectors in which the foreign investment projects received in Arab countries in the first quarter of this year were distributed, the coal, oil and gas, chemicals, renewable energy and telecommunications sectors remained in first place. line between the sectors receiving investments.
Together, these sectors accounted for 58.5 percent of total foreign capital destined for countries in the Arab region, with investments of approximately $ 9.5 billion.
The Secretary General of the Arab Investors Union Jamal Bayoumi confirms that the Arab region is qualified to be a center for attracting investment, as transcontinental companies suffer from a slowdown in the growth rates of their main markets, especially the European region , which is witnessing economic crises, which have prompted its markets to slow down significantly.
Bayoumi said in a statement to Al-Arab that “cross-border investments are looking for fast growing areas with high consumption, and these ingredients are available in the Arab region, in addition to the enjoyment of products manufactured on its soil to access more markets. without customs taxes “.
Last year, the foreign direct investment movement tracked the UAE, which ranked first in the region for attracting international investment, while the largest number of projects in the region received around 1,814 projects, with a share of about 41%. Saudi Arabia comes in second with around 513 projects, or 12%, and Egypt comes in third with around 476 projects, or 11%.
The United Arab Emirates is the most important investor in the Arab region, in terms of the cost of the projects, which last year amounted to approximately 51.2 billion dollars, followed by China with 41.9 billion dollars, then Russia 39 , 3 billion dollars, after signing the Dabaa nuclear power plant for the production of electricity in Egypt, whose investments amount to approximately 25 billion dollars.
Mohamed Sameh, former head of the Arab Union for Direct Investment, confirmed that the Arab region has become an important center in the M&A market, due to the acceleration of investment growth in it due to its urgent need to expand. sectors of its economy.
He revealed to “Al-Arab” the upcoming meetings between investors from the Arab region, Europe and China aimed at establishing joint projects in various Arab countries. These talks have entered advanced stages which will be revealed in the next period.
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