DUBAI, 4 May 2003 — Saudi Arabia, Bahrain and the UAE have proposed an Arab umbrella association to attract foreign direct investment to the Middle East.
The idea came from the Saudi Arabian General Investment Authority (SAGIA), the Economic Development Board of Bahrain and the Dubai Development and Investment Authority (DDIA).
Prince Abdullah ibn Faisal ibn Turki, SAGIA’s governor, said Arab governments had taken few steps to unify their approach.
“Too little work toward cooperation has been seen with no clear mechanism guiding inter-Arab cooperation in the area of FDI regulation and promotion,” he told an international conference on investment.
He said the formation of the proposed Arab-wide investment promotion institution would enhance national efforts as well as efforts of specialized agencies like the Inter-Arab Investment Guarantee Corporation and the Arab Monetary Fund.
“The aim of the proposed association is to create a common Arab front; a comprehensive, well-planned and cooperative mechanism for the promotion of global and regional investments into the Arab world,” said DDIA Director General Saeed Al-Muntafiq.
“FDI inflows were put at $4.99 billion for 2002. They were as low as $2.65 billion in 1999 and as high as $7.86 billion in 1998,” he noted.
Earlier, Dubai’s Crown Prince Sheikh Mohammad ibn Rashid Al-Maktoum, who is also defense minister of the United Arab Emirates, told the conference that the Arab world must raise standards of accounting and transparency and move aggressively to identify business opportunities if it is to come up to speed and win foreign investment.
He said investment opportunities “must be nurtured” as Arab nations were lagging sorely behind their potential.
“It is only by applying best practices that are tailor-made to the region in areas like accounting standards, corporate governance, laws and regulations and transparency that we can improve the investment climate in the region,” Sheikh Mohammad said in a speech read out in his name.
“Governments must create systems whereby opportunities are identified and categorized. We need to ensure that opportunities are correctly matched with the input they require — whether it is capital or talent,” he said.
Sheikh Mohammad said that Arab states had great potential for more investment due to their natural resources, tourism potential and — with a combined population of more than 300 million — enormous human capital.
“Why, despite all this, do the 22 Arab countries have a gross domestic product of only $700 billion, which is less than that of Germany? Why have Arab states attracted less than one percent of the $735 billion of foreign direct investment in 2001?” Sheikh Mohammad asked.
The crown prince’s address inaugurated a three-day international conference on investment attended by more than 700 delegates from both government and the private sector. His speech was read out by Sheikh Ahmed ibn Saeed Al-Maktoum, who is chairman of the Dubai-based airline Emirates.
While the United Arab Emirates grew rapidly in the late 20th century thanks to oil revenues, Dubai has in recent years moved aggressively to turn into a regional trade, tourism and technology hub.
