Annual Investment Meeting 2017: Protectionism to hit global growth, warns UAE

dubai - Economic openness and free markets have been an incentive for the growth of economies, says UAE Economy Minister

Protectionist policies would only undermine the growth of investments and negatively impact the prosperity of the global economy, Sultan bin Saeed Al Mansouri, UAE Minister of Economy, said on Sunday.

Inaugurating the seventh edition of the Annual Investment Meeting (AIM), the world's largest annual gathering on foreign direct investment, the minister said economic openness and free markets have been an incentive for the growth of economies. "Trade protectionism policies have always served short-term objectives, but their long-term implications are negative."

"Today, we meet to emphasise that FDI has always been a contributing factor in the development of the economies of receiving and exporting countries," he said.

He said in line with the 2021 Vision, the UAE has not only become a regional and global centre for investment and business but also a source of huge investment flows to several countries in the world.

Al Mansouri said the UAE, ranked 16th in the Global Competitiveness Report in 2016-2017, has the most competitive position in the region, he said.

The UAE is also the largest investment-attracting country in the Middle East and North Africa region, according to Unctad's Global Investment Report 2016, he said.

"This competitive position has not been achieved by chance, but instead through determination and hard work. Achieving it also required a clear vision of leadership, strategies, teams, performance indicators, continuous follow-up, learning and benefiting from the experiences of other countries, and through interaction and cooperation of the private sector in building sustainable partnerships. This is what makes the UAE the second largest Arab economy and the most diversified economy in the region," he said.

FDI is a major driver of economic growth and sustainability. The world economy has seen a surge in FDI flows over the past decades, and it is clear that both developed and developing countries are working hard to develop favourable policies and incentives to attract more foreign investments.
However, on a national level, "we must pay greater attention to the desired outcomes and the potential gains that can be achieved, by developing improved FDI strategies, to increase productivity and enhance national competitiveness," Al Mansouri said.

The minister said in 2015, global FDI inflows increased by about 40 per cent to $1.8 trillion. "However, this growth did not indicate to a similar increase in productive capacity in other countries. In order to accomplish the positive outcomes that can be achieved through FDI, such as job creation, skills and knowledge transfer, nations must create a clear vision and concrete agendas for a more competitive economy," he said.

In contrast to 2015, FDI inflows in 2016 have shrunk to $1.5 trillion. This decline was more pronounced in emerging markets than in developed economies. As a result, emerging markets face increasing challenges to attract global FDI.

Al Mansouri said the Annual Investment Meeting has launched the AIM Start-Up Platform for entrepreneurs. This platform serves to connect promising start-up companies with potential partners and investors from around the world.

"Today, the world is highly interconnected and affected by any changes, therefore, causing some societies to stand still and feel unable to cope with these rapid changes. Thus, collective and collaborative efforts between governments and private sectors are essential to overcome the challenges and to build a secure, stable and prosperous future for the citizens of the world to live in," he said.

Khalifa bin Salem Al Mansouri, acting undersecretary of the Abu Dhabi Economic Development department, said AIM 2017 explores investment opportunities between world nations and among regional and international companies.

"A key objective of the UAE Vision 2021 is to increase the volume of foreign investments in the country, by building strong and sustainable relations of mutual benefits between our wise government and the friendly governments and companies from around the world," he said.

- issacjohn@khaleejtimes.com