31 March 2023, N Business
GCC economies Qatar and Saudi Arabia also feature in world’s top 25 first.
The UAE has been ranked as the top emerging market across the Middle East and North Africa region, and third globally, after China and India, as revealed in Kearney’s 2023 Foreign Direct Investment Confidence Index (FDICI).
Other Middle East economies featuring in the list of top 25 emerging markets include Qatar (fourth), Saudi Arabia (sixth), Egypt (14th), Turkey (15th) and Morocco (16th), according to the index.
This is the first time in the index’s 25-year history that an exclusive ranking for emerging markets has been included, to provide business leaders with insights into emerging markets that are most appealing to investors, Kearney said.
“The UAE remains an exceptionally attractive destination for investors, particularly in light of the launch of the Dubai Economic Agenda (D33) — an $8.7 trillion economic plan to boost trade, investment and promote its status as a global hub,” said Rudolph Lohmeyer, partner at national transformations institute, Kearney Middle East.
Launched in January, the D33 strategy aims to catapult Dubai into the world’s top cities by economic strength in the next 10 years and involves a programme to help 30 private companies to achieve unicorn status ― companies worth more than $1 billion. It aims to establish the emirate in the top three global cities.
The UAE, the Arab world’s second-largest economy, is estimated to have grown by 7.6 per cent last year, the highest in 11 years, after expanding 3.9 per cent in 2021, according to the UAE Central Bank.
The banking regulator expects the country’s economy to grow by 4.3 per cent next year and has maintained its growth forecast of 3.9 per cent growth for the current year.
The UAE’s non-oil foreign trade hit a record Dh2.23 trillion ($607.1 billion) last year as the Emirates hastened to put in place measures to reduce its dependence on hydrocarbons and boost its economic partnerships globally.
“It is clear that the government remains relentlessly committed to diversifying the UAE’s economy and strengthening the UAE’s business environment,” Mr Lohmeyer said.
“Their disciplined approach to driving the future-readiness of the economy and the country is stunning. Funding this ongoing transformation will continue to benefit from hydrocarbon demand as the energy transition unfolds in various ways and at various speeds around the world.”
Kearney’s index is an annual survey of global business executives, which rates the markets that are likely to attract the most investment in the next three years.
Respondents included executive-level managers and all participating companies, from 30 countries, with annual revenue of $500 million or more.
In the overall index, which is led by the US, Canada, Japan, Germany and the UK, the UAE is 18th, while Qatar and Saudi Arabia are 21st and 24th, respectively.
Developed markets account for 19 out of 25 spots in the overall index.
Saudi Arabia’s performance was fuelled by its economy growing at 8.7 per cent last year, “sweeping pro-business reforms, strong fiscal outlook and accelerating progress in economic diversification”, the report said.
The successful hosting of the World Cup last year boosted investors’ interest in Qatar, whose economy grew 4.1 per cent last year, up from 1.5 per cent in 2021, Kearney said.
His report emphasised the cautious investor optimism about the global economy.
More than three quarters of respondents said they were planning to increase their foreign direct investment (FDI) in the next three years and 86 per cent cited FDI as more important for their corporate profitability and competitiveness. However, this positive sentiment was tempered by concern about downside risk.
“Our results this year reflect a degree of caution,” said the report’s co-author Erik Peterson, partner and managing director of Kearney’s global business policy council.
“Investors cited a rise in commodity prices, an increase in geopolitical tensions, and rising political instability in emerging markets as among the top risk factors over the next three years.”
The index found that business leaders believe globalisation is and will remain the central force in FDI. Nearly 66 per cent of respondents expect a jump in globalisation in the next three years, while 23 per cent anticipate a decline.