The United Arab Emirates (UAE) ranks 15th globally in Kearney’s 2021 Foreign Direct Investment (FDI) Confidence Index, up from 19th place in 2020.
The UAE business environment demonstrates continued strengths in factors most important to investors, including government incentives for investors. The country’s strong enabling environment, featuring advanced technological infrastructure and high innovation levels, is also central to its FDI attractiveness. The UAE is one of only five countries globally that achieved a higher ranking this year in an increasingly competitive global FDI attraction environment.
According to the new report from the global strategy and management consulting firm, investors say they are more cautious regarding FDI globally as they gear up for a long-haul economic recovery. The ranking reveals a significant fall in overall optimism about the global economy since pre- and early-pandemic levels last year; however, investor optimism about the Middle East & North Africa generally remained stable. Optimism levels regarding the economic outlook for the UAE scored higher in relative terms than those documented last year, placing it among the top 5 countries in terms of net optimism.
This year’s rankings point to continued apprehension and uncertainty about how quickly the global economy will recover post-COVID. In addition to the fall in confidence about the economy, most of the overall scores for the top-25 countries have fallen compared with previous years. Only 57 percent of investors are optimistic about the three-year global economic outlook, which is much lower than the corresponding figure last year of 72 percent (prior to and at the onset of the pandemic).
Reflecting investors’ increased caution this year, developed economies account for the lion’s share of the top-25 list for two primary reasons. Only three emerging markets are on this year’s Index: China, the United Arab Emirates, and Brazil. China remains the highest-ranked emerging market, a distinction the country has held consistently since 1999. However, concern over escalating US–China trade tensions and a more general corporate rethink of international supply chains could explain its drop to 12th place.
