UNCTAD: Saudi Arabia top ten foreign direct investment in the world

According to the World Investment Report (WIR) of the UN Conference on Trade and Development (UNCTAD), released in Riyadh on Thursday, Saudi Arabia lured 36 billion U.S. dollars in foreign direct investments last year, Saudi-based Arab News newspaper reported Friday.

"Being the largest FDI recipient in the region, Saudi Arabia has projected impressive growth last year and it has earned investor confidence from global entrepreneurs," Taffere Tescfachew, chief of the Office of UNCTAD Secretary-General and Strategy and Policy Coordination, was quoted by the paper as telling a news conference in the Saudi capital.

The report that covered 192 countries was released simultaneously in 42 countries worldwide.

The kingdom was placed 14th last year in the WIR though with five-percent higher inflows of 38.1 billion U.S. dollars in 2008.

According to the report, the United States was the top contributor of the kingdom's FDI inflows in 2009 with 5.8 billion U.S. dollars, followed by Kuwait with 4.3 billion, UAE with 3.8 billion, France with 2.6 billion, Japan with 2 billion and others with smaller amounts.

The investments were channeled into several economic sectors, including real estate and infrastructure, building contracts, financial services, mining, oil and gas exploration, transportation, telecommunications and information technology, the report said.

Sectors that received the most FDI include information and communications technology, real estate, infrastructure, banking and insurance, mining, oil and gas, and transportation. Saudi Arabia accounts for 70 percent of FDI in the Gulf Cooperation Council (GCC) region, which declined to $50.8 billion (SR190.5 billion) from $60 billion in 2008 (SR225 billion).

In 2009, the U.S. remained Saudi Arabia’s top exporter, accounting for 14 percent of all imports, followed by China with 11 percent, and Germany with 8 percent. Machinery and transportation equipment holds a large share of the import market, accounting for 46 percent. Chemical and base metals were the next largest imports followed by foodstuffs, representing 19.7 percent and 15 percent of imports, respectively.

It has drawn on its reserves to fund record budgets and keep its $400bn five-year infrastructure development programme on track.

Saudi Arabia’s finance ministry said it approved 1420 contracts for various projects the country valued at 71.5bn Saudi riyals ($19.1bn) during the first half of 2010.

The kingdom, which invested its surplus income in low risk bonds during the oil price boom last decade, spent over $30bn in 2009 from its net foreign assets to keep its economy growing. Policy makers say this counter-cyclical strategy helps dampen downturns for countries dependent on income from oil exports.

Global FDI inflows for 2009 were $1.1 trillion (SR4.1 trillion) and UNCTAD expects this will increase to more than $1.2 trillion (SR4.5 trillion) in 2010 and rise to $1.6 trillion (SR6 trillion) to $2 trillion (SR7.5 trillion) by 2012. The top 10 global recipients of investment in 2009, in order of FDI, are the U.S., China, France, Hong Kong, the U.K., Russia, Germany, Saudi Arabia, India, and Belgium.

Global Arab Network