The UAE is first in the Arab world in the investment climate and investment attraction index, with a value of $48.2 billion for the year 2025.

KUWAIT, 8th July, 2020 (WAM) – The UAE topped the list of the most important Arab destinations for foreign direct investments for the year 2025, with a value of $48.2 billion, or 40.4%, especially after it ranked first in the Arab world and 17th globally in the “Daman” compiled index of the investment climate for the year 2025, where it improved two places compared to the index for the year 2024.

According to UNCTAD estimates, inward foreign direct investment flows to Arab countries declined by 10% to reach $119.3 billion in 2025, with their concentration continuing to exceed 80% in three Arab countries, at a rate of 80%, coinciding with a decline in the region’s share to 7.3% of the global total and 13.3% of the total developing countries.

The Arab Corporation for Investment and Trade Credit Guarantee (Daman) announced the stability of the average Arab ranking at 102nd place globally in its combined index of investment climate components for the year 2025, which reflects the continued gap from the global average of about 23 places, despite 13 Arab countries recording an improvement in their ranking within the index.

In its forty-first annual report on the investment climate for the year 2026, which it launched today from its headquarters in the State of Kuwait, the Foundation recommended adopting integrated and flexible programs to enhance the Arab investment environment.

These recommendations focus on four main areas: “political and security, institutional, legislative, procedural, economic, and factors of production.” Especially after the cost of new foreign direct investment projects in Arab countries declined by 9% to reach $112 billion in 2025, as a result of geopolitical events.

At the level of the political and security situation, the Foundation stressed the importance of intensifying peaceful efforts to resolve conflicts, and activating regional coordination to combat terrorism, organized crime, and foreign interference. She stressed the need to modernize security systems, calm civil unrest, and strengthen the rule of law.

At the level of the institutional, legislative and procedural environment, the report recommended updating and simplifying laws related to investment and business to keep pace with developments in a transparent manner, with the digitization and mechanization of procedures and shortening their duration, with the need to strengthen governance, quality and oversight systems, and develop the justice and law enforcement system to protect investors and their rights through local legislation, international agreements, and advanced arbitration services, in addition to providing insurance against political and commercial risks from specialized bodies, led by the Daman Corporation.

Regarding the economic environment, the corporation stressed the importance of adopting policies to curb inflation, enhance currency stability, reform the tax and customs systems, and develop the infrastructure and logistics.

It called for empowering the private sector, stimulating its participation, and diversifying economic activities by providing additional benefits and incentives to the targeted sectors.

Regarding the factors of production, the report stressed the importance of developing human capital, bridging the skills gap through education and training, increasing the flexibility of the labor market, making industrial and service lands available and facilitating access to them, and diversifying and facilitating direct financing channels while activating the role of banks and financial institutions.

The demands also included localizing knowledge, stimulating research and development in production and service fields, and securing local supply chains, intermediate inputs, and basic components.

The Foundation called for a number of observations to be taken into consideration, the most prominent of which are: benefiting from the experiences of countries that have succeeded in improving their investment environment and their ranking in international indicators, starting with the easiest and most effective reforms, and focusing on technology and electronic services, as well as taking into account the differences between countries in terms of resources, capabilities and challenges.

The report indicated the ranking of the Arab countries in the combined investment climate index for the year 2025, as it revealed that the Gulf Cooperation Council countries, Jordan and Morocco were at the forefront of the Arab ranking, led by the UAE in first place in the Arab world and 17th globally, followed by Qatar in second place in the Arab world and 38th in the world, then Saudi Arabia in third place in the Arab world and 40th in the world, and the Sultanate of Oman came in fourth place in the Arab world and 51st in the world, then Kuwait ranked Fifth in the Arab world and 52nd globally, followed by Bahrain in sixth place in the Arab world and 57th in the world, then Jordan in seventh place in the Arab world and 74th in the world, then Morocco in eighth place in the Arab world and 75th in the world.

Tunisia and Egypt also achieved a better position than the average Arab ranking, as they were ranked 95th and 100th globally, respectively.

On the other hand, 11 other Arab countries were ranked between 104 and 158 globally, respectively.

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