Top 25 desirable FDI locations

Interest among corporate executives for investments in the Middle East is at an all-time high according to A.T. Kearney's Foreign Direct Investment Confidence Index (FDICI), a regular survey of global executives conducted by management consulting firm A.T. Kearney

Middle East investment destinations attained the highest ever rankings in the 10-year history of the Index, with two locations placing among the top 25 most attractive investment destinations.

The United Arab Emirates rose to 8th position in the 2007 FDICI, up from 22nd in 2005 FDICI. Other Gulf States (Bahrain, Kuwait, Oman and Qatar) made their debut in 17th position in the current Index. In addition, Saudi Arabia and Egypt, although not ranked among the top 25 globally, were particularly attractive to investors from developing markets.

Compared to a year ago, 29 percent of investors report a more positive outlook toward the UAE, placing it fourth behind only India, China, and Brazil in terms of increased investor optimism globally. The FDI Confidence Index provides a unique look at the current investor sentiment and future prospects for international investment flows in the years ahead. Companies participating in the survey account for more that $3.8trn in global revenue.

'Investor interest in the Middle East rose strongly in 2006 and clearly that trend is poised to continue,' said Paul A. Laudicina, managing officer and chairman of A.T. Kearney. 'Reforms in a number of countries have greatly improved the climate and infrastructure for global business. Corporate investors are also obviously attracted to the wealthy regional market and the availability of services industry hubs like Dubai. A fast-growing population, access to capital, in addition to energy reserves, are motivating favourable CEO investor sentiment toward the region.'

The UAE ranks within the top 10 investment destinations for services investors, as well as for primary and heavy manufacturing investors.

However, political instability continues to be a deterrent to investment in the region. Leading investor concerns for the Middle East centred on the continued instability in Iraq, as well as possible outbreak of war with Iran. The risk of terrorism, anti-Western bias, and ethnic conflicts in the region are also deterrents for foreign investment.

Interest in Middle East investment varies by region. There is a lack of interest in the region from North American investors relative to their Asian and European counterparts. Among Asian investors, the UAE ranked 5th, and among European investors it ranked 10th. By contrast, the UAE did not rank among the top 15 most attractive destinations for North American investors.

'This lower interest from North American investors may be partly attributable to corporate concerns over potential political backlash at home,' said Martin Walker, senior director of the Global Business Policy Council, which conducts the study. 'Yet it is indicative of the strategic and investment challenges confronting executives in a globalised world replete with more FDI choices than ever before.'

The 25 most attractive FDI destinations according to corporate executives:
1. China
2. India
3. United States
4. United Kingdom
5. Hong Kong
6. Brazil
7 Singapore
8. The United Arab Emirates
9. Russia
10. Germany
11. Australia
12. Vietnam
13. France
14. Canada
15. Japan
16. Malaysia
17. Other Gulf States
18. South Africa
19. Mexico
20. Turkey
21. Indonesia
22. Poland
23. Central Asia
24. South Korea
25. Czech Republic