Today's Edition
Yusuf Al-Arabi (ABU DHABI)
UAE investments are a primary driver of the new global economy, with the UAE’s sovereign funds accounting for 20% of the world’s total sovereign investment funds, according to Jamal Saif Al Jarwan, Secretary-General of the UAE International Investors Council (UAEIIC).
In an interview with Aletihad, Al Jarwan said that the UAE’s investment asset volume is rising, especially given the overall promising prospects following a focus on emerging markets and explorations into new markets.
UAE investments abroad were worth $1.9 billion from 1991 to 2000, with an additional $53.6 billion added from 2001 to 2010, reaching a cumulative balance of $240 billion in UAE investments abroad by the end of 2022, compared to $215 billion in 2021.
In 2022, the outflow of UAE investments abroad reached $24.833 billion, an increase of 10% compared to $22.546 billion in 2021. The UAE ranked 15th globally in investments abroad in 2022, compared to 20th in 2021, in terms of countries exporting direct foreign investments, according to a report from the United Nations Conference on Trade and Development (UNCTAD). The business portfolio of the UAEIIC’s member companies is the largest in the Arab world as well as the Western Asia and Africa region, with assets approaching $1 trillion.
With its forthcoming strategic plans, the Council aims to increase the representation of UAE companies, and grow its members from 26 to 50, in a push to drive Emirati investments through the council’s platform to $1.5 trillion over the next five years, Al Jarwan said. Membership in the Council grew 13% in the first half of 2023 compared to the same period last year, he added.
Work Underway
Al Jarwan highlighted the Council’s role in enhancing, supporting, and ensuring the sustainability of UAE investments abroad to serve the state’s development agenda and its vision towards transitioning to a more diverse and flexible economic model.
The Council is focused on enhancing communication with promising economies, foreseeing opportunities for establishing new partnerships, and regularly reviewing and evaluating the global investment landscape, suggesting ideas and raising recommendations based on its evaluations, Al Jarwan said.
In the future, the Council aims for UAE investments to be a main driver of the new global economy to realise growth for its members. The Council is working on various axes to expand in key sectors in surrounding regional markets, including in the Middle East, the “BRICS” countries, the U.S., as well as in the Asian, North African, Latin American, and European markets, in addition to other emerging markets.
The prospects are generally favourable, with a focus on emerging markets, in addition to opening up new markets, the UAEIIC Secretary-General noted.
Volume of assets
Al Jarwan stated that, thanks to the vision and directives of the wise leadership, the UAE is proceeding with its ambitious goals for the next fifty years, in which a decisive role in empowering the private sector has been evident.
The UAE represents an important figure in the global investment equation, with its investment fund assets accounting for approximately 20% of the combined global assets of other investment funds. This places the UAE at the top of the global list, attracting the attention of global political and economic powerhouses, and making the country a significant investment destination, Al Jarwan said.
Contributions Abroad
Emirati investments make many positive contributions to the economies of both developing and developed countries, Al Jarwan said, characterising UAE investments as “an effective tool” with which to enhance economic development and achieve sustainability and economic prosperity.
Emirati investments in recipient countries lead to GDP increases and improved economic growth rates, and also play a significant role in creating new job opportunities, Al Jarwan added. Directly or indirectly, UAE investments are contributing to reducing unemployment rates and improving standards of living in developing nations.
In terms of technology transfer, knowledge, and experience, UAE investments help promote the transfer of modern technology and knowledge to the markets of the countries attracting UAE investments. This helps improve production efficiency, enhances innovation, and drives the economic wheel for those markets. In terms of infrastructure development, Emirati investments contribute to developing infrastructure in developing countries, such as building road networks, ports, and airports. This enhances transportation and trade, and attracts more investments and businesses.
Pertaining to developed economies, Al Jarwan said: “Emirati investments open new horizons for trade and commercial exchange between the UAE and developed countries, which increases export volume, improves the competitive advantage of local products in global markets, and supports economic relations. Emirati investments also support vital sectors in developed countries, with investments increasingly directed towards vital sectors such as smart transportation, biotechnology, and medical industries. The best example of this is the joint project ‘LifeSciences and Vaccine Manufacturing in the UAE’ by the UAE’s G42 Group and China’s Sinopharm CNBG company.” According to the UAEIIC Secretary-General, the Comprehensive Economic Partnership Agreements (CEPA) launched by the UAE government has great potential to establish principles for developing trade patterns and facilitating imports and exports. “CEPA’s important role is reflected in reciprocal investment flows; it’s more open, inclusive, and competitive, playing a crucial role in increasing Emirati investments abroad in the next phase,” Al Jarwan said.He noted that the UAE government launched the Comprehensive Economic Partnership Programme in September 2021 with the aim of expanding trade and investment partnerships with several strategic global markets, increasing the volume of trade and enhancing opportunities for national export and mutual investments.
