Gulf Cooperation Council (GCC) countries have been witnessing a “remarkable increase” in foreign direct investments (FDIs) from about $30bn in 2000 to approximately $431bn in 2015, a Goic official said.
Gulf Organisation for Industrial Consulting secretary-general Abdulaziz bin Hamad al-Ageel made the statement during a presentation delivered at the GCC-France Economic Forum held recently at Salons Hoche in Paris.
During the forum, organised by the Federation of GCC Chambers (FGCCC) in collaboration with the Franco-Arab Chamber of Commerce (FACC), al-Ageel said cumulative foreign investments are currently valued at $431bn, “five times more than their value in 2005.”
On the other hand, GCC investments abroad reached approximately $248bn, excluding sovereign funds valued at around $2.7tn, al-Ageel said.
“The average annual growth rate of FDIs in the GCC was two times bigger compared to the rest of the world, around 19% in GCC countries versus 9% internationally. The 2008 global financial crisis resulted in an increase of the flow of foreign investments towards GCC countries that were viewed as a stable environment and safe haven for capital.”
As to the distribution of foreign investments throughout the GCC, al-Ageel said Saudi Arabia attracted 52% of the cumulative foreign investments, given its large economy and absorptive capacity, in addition to its unique geographic position.
The UAE, he added, was the second GCC country attracting 26% of the total investments, followed by other GCC countries. He said the remaining GCC countries have many opportunities to further draw foreign investments.
In the industrial sector, al-Ageel explained that there were approximately 2,303 joint industrial projects with foreign investments, for example 16% of the total GCC industrial projects (16,890) in 2015.
He added that the total value of FDIs in the GCC industrial sector was around $53bn (14% of the total investments in GCC industrial sector valued at about $380bn). These investments offered 303,000 job opportunities (19% of the total labour force of about 1.6mn workers in the GCC industrial sector), he said.
On the distribution of cumulative FDIs in the industrial sector, al-Ageel said the contribution of cumulative FDIs in industrial projects in Qatar reached approximately 20% of the total investments in its industrial sector, the highest share compared to other GCC countries like Bahrain where it was only about 1.4% of the total investments.
Al-Ageel said cumulative GCC FDIs in France increased by about 9.8% annually between 2012 and 2015, valued at around $10bn in 2015. French investments in GCC countries “increased remarkably” at an annual rate of 25% during the same period to reach approximately $5.5bn in 2015.
He said Saudi Arabia attracted about half of France’s FDIs in the GCC (approximately $5bn in 2015), followed by Qatar (28% or about $3bn of the total cumulative French FDIs in the GCC), Oman (17.9%), Kuwait, UAE, and Bahrain with close figures “reflecting potential investment opportunities in the future.”
Al-Ageel said Qatari cumulative FDIs’ share of the total GCC cumulative FDIs in France was valued at approximately $2bn in 2015, as a result of increasing economic relations between the two countries. Qatar was followed by Oman and the UAE with approximately 27% and 23%, respectively. Trailing behind were Saudi Arabia, Kuwait, and Bahrain.
He said French imports witnessed a steady growth between 2005 and 2015 with a compound annual growth rate (CAGR) of 5.5%, to fulfil the increasing local demand as a result of their growing economies, which reveals huge potential investment opportunities in the future. Similarly, GCC exports to France witnessed a surge that was smaller (1.3% CAGR) from about $7bn in 2005 to approximately $8bn in 2015.
In addition, non-oil industrial imports from France to GCC countries registered a 4% CAGR between 2009 and 2014 as they were valued at approximately $11bn in 2014. Saudi Arabia’s share was about 83% of the total imports, followed by Qatar, Bahrain, Kuwait, and Oman.
Transport machinery, devices and equipment formed about 42% of the total industrial imports from France to the GCC in 2014, followed by chemical and plastic products (27%).
On the other hand, non-oil industrial exports to France were valued at about $4bn (approximately 34% of the total GCC exports to France in 2014). In this regard, Qatar ranked first with about 43% of the total exports, followed by Bahrain, Kuwait, and Oman. Chemical and plastic products were the top exports (63% of the total non-oil exports from GCC countries to France), al-Ageel said.