Dubai posts Dh24.7 billion FDI, creates 18,325 new jobs

Dubai continued its dominance as a preferred destination of global investors by recording a foreign direct investment (FDI) inflow of Dh24.7 billion into 445 projects, creating an estimated 18,325 new jobs in 2020.

According to the Financial Times’ fDi Markets, the leading global source of data on greenfield FDI, despite the harsh global epidemic challenge, Dubai currently ranks first in the Middle East and North Africa region and fourth globally as a magnet for greenfield FDI capital.

In greenfield FDI projects that attracted 2.1 per cent of all such projects in 2020, exceeding the 2.0 per cent mark for the first time, Dubai also achieved a record as it continued to lead regional and global FDI locations in facilitating global business growth and expansion.

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of the Executive Council of Dubai, said Dubai’s position as a leading FDI destination globally and regionally underscores the attractiveness of its investment environment and the confidence of the investor community in the emirate’s future economic potential.

“Dubai’s success in combating the Covid-19 pandemic and starting the recovery phase in record time is a testament to our commitment to provide the best investment environment in the world and transform global challenges into new opportunities for growth, driven by technology and innovation, and powered by Emirati and global talent, making Dubai the best place in the world to work, live, and invest,” the Dubai Crown Prince said.

According to data from the Dubai FDI Monitor released by the Dubai Investment Development Agency (Dubai FDI), an agency of Dubai Economy, the record FDI flow was for 455 projects, exceeding the annual average of past five years.

The outstanding FDI performance of Dubai was in the face of extremely challenging global investment circumstances created by the Covid-19 pandemic and its economic impact. According to the Global Investment Trends Monitor published in January 2021 by the United Nations Conference on Trade and Development, global FDI plunged 42 per cent to an estimated Dh3.15 trillion from Dh5.5 trillion in 2019.

Sami Al Qamzi, director general, Dubai Economy, said Dubai's economy has continued to demonstrate high levels of resilience, diversity, and speed of adapting to changes, supported by its world-class infrastructure, legislation, and ease of doing business.

“Dubai has become a hub in the global economy, offering growth and expansion opportunities for investors across strategic and future-oriented sectors in financial services, logistics, hospitality and trade as well as leading Industry 4.0 technologies, accelerating digital transformation across all sectors, industries, and smart city services in Dubai,” said Al Qamzi.

Fahad Al Gergawi, chief executive officer, Dubai Investment Development Agency (Dubai FDI), said thanks to the strategic foresight of Dubai’s leadership and the emirate’s future-readiness, global investors and entrepreneurs have realised success and growth in Dubai over the years. “Our performance in 2020 flows from the success stories that drive investor confidence and the opportunities shaping future economic potential.”

With more than 50 per cent of all announced FDI projects in the emirate classified as greenfield FDI, Dubai’s consolidated its status as a smart and sustainable city of the future, a gateway to regional growth markets and a leading global business hub in 2020, despite the stringent measures it took to combat the global pandemic.

FDI capital from reinvestment projects reached Dh1.6 billion in 2020, exceeding the Dh1 billion mark for the first time since 2016, as per data from Dubai FDI Monitor.

The US was the top FDI source country, accounting for 21 per cent of capital and 22 per cent of FDI projects. Others among the top five source countries for FDI capital included France (16 per cent), Japan (11 per cent), the UK (7.0 per cent), and Germany (6.0 per cent). In terms of projects, the UK accounted for (14 per cent), France (6.0 per cent), India (6.0 per cent), and the Netherlands (4.0 per cent) made up the rest of the top five in FDI projects. The top five source countries accounted for 60 per cent of the total FDI capital flows and 52 per cent of the total number of announced FDI projects.

The top five sectors accounting for 69 per cent of the total FDI capital flows in 2020 were accommodation & food services (40 per cent), electric power generation (13 per cent), information services (8.0 per cent), healthcare & social assistance (4.0 per cent), and retail & whole trade (4.0 per cent). The top five sectors that received FDI projects, accounting for 54 per cent of the announced FDI projects into Dubai in 2020, were accommodation & food services (18 per cent), retail & wholesale trade (14 per cent), software publishers (10 per cent), finance & insurance (6.0 per cent), and management of companies (6.0 per cent).

Dubai’s dynamic innovation, entrepreneurship, and venture capital ecosystem enabled Dubai-based startups to attract an estimated Dh2.36 billion in FDI capital through 31 investment deals in 2020, according to data from MAGNiTT, a Dubai-based firm that captures and analyses startup funding information.

The share of FDI projects in strategic sectors reached 57 per cent of all announced FDI projects in Dubai in 2020, which further strengthens the foundation for Dubai’s sustainable economic development. These investments accounted for 91 per cent of estimated FDI capital flows, reaching a record Dh22.5 billion. “The Dubai Government’s strategic plans and accelerated future-readiness have especially attracted strategic FDI into high and medium-tech sectors in 2020, as 76 per cent of all strategic FDI projects in 2020 were high and medium-tech with a total of Dh11.2 billion in estimated FDI capital,” Dubai Economy said.

issacjohn@khaleejtimes.com