The UAE is among the world’s most preferred countries for foreign direct investment (FDI). It leads the Middle East and Africa on the recently published Kearney’s 2023 Global Services Location Index (GSLI).
The UAE moved four notches up the rankings to 21st place from two years earlier.
The index is published bi-annually by Kearney, a management consultancy firm. It evaluates countries on their attractiveness as potential locations for offshore services.
In its 12th edition, the GSLI included other Middle Eastern countries for the first time. Saudi Arabia, Qatar, Kuwait, Oman debuted on the list this year, as well as Jordan and Lebanon.
“India, China, and Malaysia continue to lead this year’s GSLI as the top three countries, with Brazil and the United Kingdom rounding out the top five. In addition, Indonesia, Vietnam, the United States, Thailand, and Mexico secure positions in the top 10. Meanwhile, the UAE and Morocco are the highest-ranked countries in the Middle East and Africa and continue to improve their global position,” Kearney said in a statement.
The 78 countries ranked by Kearney for the GSLI were selected based on several factors. These include corporate input, current remote services activity, and government initiatives to promote the sector. They were evaluated against 52 metrics across four major categories. Among these are financial attractiveness, people skills and availability, business environment, and digital resonance.
Read: Sheikh Mohammed bin Rashid announces record FDI inflows to UAE worth $23 bn in 2022
Foreign direct investment in UAE soars
Meanwhile, Abu Dhabi Department of Economic Development chairman Ahmed Jasim Al Zaabi announced that foreign direct investment in the UAE rose by 10 percent to $23 bn in 2022. He revealed the milestone at the recent launch of the annual World Investment Report 2023, published by the United Nations Conference on Trade and Development (UNCTAD).
“As our doors are open to investors from around the globe, the UAE is also among the world’s largest and most active investors. In 2022, UAE’s FDI outflows also increased by 10 percent to reach $25 bn. Our country moved up to 15th place from 20th place in 2021, reaffirming UAE’s role as the global leader of investments that help other countries to grow, provide jobs to millions of people and shape a brighter future for humanity,” said Al Zaabi.
The UAE’s FDI performance was attributed mainly to its stable political environment and flourishing economic climate. Its emerging digital economy also contributed to its continuing progress. As an example, more than 4,000 startups have set up shop in the UAE, which is now emerging as a top tech hub in the region.
In addition, the UAE continues to be a major destination for global events. This has added to its appeal as a destination for foreign direct investment. For instance, Abu Dhabi will host the World Investment Forum 2023 in October, just before COP28. The event will bring together world leaders to discuss climate finance, investment and explore potential partnerships.
Significance of technology and talent regeneration
Furthermore, Kearney highlighted two factors that were relevant to the index. One is the intensity of technology innovation in a country. The other is a nation’s focus on digital skill enhancement. It should be noted that the UAE has heavily invested in both.
“In an ever-changing global market landscape, where skills take precedence over cost advantages, a nation’s true strength lies in its capacity to foster and unleash the potential of its talented people,” said Rob Van Dale, digital lead, Kearney, Middle East and Africa.
According to Van Dale, while countries such as the UAE and KSA do not naturally have a cost advantage, their focus on talent regeneration is, for example, paying off. “Coupled with their investments in digital resonance and an already attractive business environment, they may in the near future further increase their attractiveness for high skilled services catering to their region,” he ended.
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