What is really happening to regional FDI?

Last week saw the publication of the latest global foreign direct investment figures by the United Nations Conference on Trade and Development, and for the first time this was done in Dubai.

Again the Middle East and North Africa region fared badly with USD4.6bn in FDI out of a global total of USD651.9bn. The GCC states pulled in just USD336m and the UAE only USD95m.

But hold on a minute. One Abu Dhabi power station alone was worth some USD400m in FDI last year. So the figures must be wrong.

Indeed, they are. UNCTAD officials told AME Info that the collection of data relies heavily on the central banks and other official sources, and that in many cases the reporting of FDI is inaccurate. UNCTAD even has a programme of seminars designed to teach local officials how to prepare FDI data.

So to accuse the Middle East in general and Gulf states in particular of poor performance with regard to FDI may not be entirely fair.

The Saudi Arabian General Investment Authority, for example, has done a brilliant job, and has commitments of more than USD11bn for FDI. Likewise, the Dubai Development and Investment Authority is playing a vital role in attracting FDI into the UAE.

Perhaps rather than UNCTAD officials telling the countries in the Middle East to be more proactive about FDI, they should put their own house in order. Data that is so obviously incorrect is not use to anyone and undermines the very case it aims to reinforce.

So what is the true position on FDI in the Middle East? As we do not have the data, we can only judge from an anecdotal basis.

No doubt it is true that many countries still do not allow FDI to take place in many sectors and have laws the prevent it. However, the whole mood in the Middle East towards FDI has taken a quantum leap forward in the past few years and day-by-day the barriers to FDI are coming down.

Whether we are talking about private universities in Syria, or real estate sales in Dubai, or gas exploration rights in Saudi, these are all tangible steps towards more FDI. So too is the expansion of LNG in Qatar and Oman, the creation of more free zones in Dubai, and Iran's decision, and reversal of that decision, to allow foreign car imports.

But to say that the Middle East is not making any progress with FDI, as the UNCTAD report suggests is untrue. There is a lot being done, and a lot being achieved. It just does not necessarily show up in the figures.