Foreign investment in UAE tops $18bn

Foreign direct investments (FDI) in the UAE rose 10.8% to 68.63 billion dirhams ($18.69 billion) in 2006, driven by growth in finance, construction, domestic trade and manufacturing, the Ministry of Economy said on Monday.

The ministry, citing figures from a survey conducted from 2005 through 2006, said FDI in the Emirates stood at 61.91 billion dirhams in 2005.

Financial intermediation and insurance accounted for 34.4% of FDI during the period, while construction accounted for 29%, domestic trade 14% and manufacturing 10.1%.

Dubai received the largest share of the UAE's total FDI at 62%, followed by Abu Dhabi at 24%, Sharjah at 10%, and the rest of the emirates contributing 4%.

The ministry said volumes of FDIs posted within the two-year period were significantly higher than previously estimated, attributing the disparity to the growing confidence of foreign investors.

The actual 2005 figure surpassed the original projection by around 40 billion dirhams, while the actual 2006 figure exceeded expectations by approximately 47 billion dirhams, it said.

"Foreign investments are of strategic importance to the UAE. They provide external sources of capital that are necessary for our country’s sustained development," Sheikha Lubna bint Khalid Al Qasimi, minister of economy, said in a statement.
"They also fuel the efficient transfer of expertise, knowledge and technology, and affirm our status as a regional and international trade hub."

Financial intermediation and insurance made up 35% of FDI in Dubai during the period, with building and construction making up 35% and domestic trade 14%.

In Abu Dhabi financial intermediation and insurance made up 42% of FDI, building and construction 21% and manufacturing 17%.

In Sharjah financial intermediation and insurance accounted for 27% of FDI, building and construction 26%, and transport, storage and communication 21%.
The survey was conducted by the Ministry of Economy in coordination with the Economic and Social Commission for Western Asia (ESCWA) and the UN Conference on Trade and Development (UNCTAD).

The figures were culled from a statistical survey project on FDIs that forms part of efforts by the UAE to develop a database of foreign investments. Source