The United Arab Emirates (UAE), as part of a broader plan to expand its trade ties with Asia and Africa is seeking US$ 150 billion in foreign investment.
Consequently, this is also geared towards the Arab nation’s quest to reposition itself as a global hub for business and finance.
In a report released today, September 5, 2021, the UAE which has spent years as the Middle East’s business and financial capital, will work on economic partnerships with eight countries.
These partners include South Korea, Indonesia, Kenya, Ethiopia and Turkey, where relations with President Recep Tayyip Erdogan have taken shape in recent months after years of tensions in regional policy.
The Gulf state has been an area faced with regional competition from neighboring Saudi Arabia. That has seen Crown Prince Mohammed bin Salman pursue an economic plan to attract foreign investment and woo global companies to set up their regional headquarters in the kingdom.
In fact, most international companies currently choose to base their activities in the Middle East in Dubai, one of the UAE’s seven sheikhdoms.
“The UAE is seeking 550 billion dirhams (US$150 billion) of domestic investment over the next nine years and aims to be among the top 10 global investment destinations by 2030,” indicated UAE Finance Minister Abdulla bin Touq. According to him, the UAE will focus on investments from countries including Russia, Australia, China and the UK.
Notable investments in the recent past
Furthermore, one of the most notable internal investments in recent years was Uber Technologies Inc’s acquisition of UAE-based ride hail company Careem in 2019 for US$3.1 billion.
This agreement generated interest from regional and international venture capital firms, and the appetite for backing up start-ups in the Middle East has grown over the last few years, arising from the rapid use of mobile technologies in the region.
Foreign direct investment (FDI) into the UAE grew by 44.2 percent in 2020 compared to 2019 and reached to a total of US$19.88 billion. The increase brought the cumulative balance of FDI inflows to about US$174 billion, achieving a growth of 12.9 per cent compared to the same period in the previous year.
The UAE currently ranks first in the Arab world and in the region and 15th globally in the Kearney FDI Confidence Index for 2021. It advanced by four ranks compared to 2020, surpassing several major global economies such as Singapore, Australia, Portugal, Denmark, Ireland, Brazil and Finland in the general ranking of the index.
Moreover, this new development comes as the UAE picks up from the economic shock of the pandemic, which triggered the collapse of oil prices and crucial tourism markets when lockdowns strangled business and authorities cut spending. The country’s economy shrank over 6 per cent last year, with credit agencies estimating that the tourist hub of Dubai saw an even sharper decline of 11 per cent.
Although this announcement is intended to give the UAE a major boost in trade compared to its peers, information still lags about when and how these will be done.
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