UAE’s government is committed to enhancing the business environment and promoting economic diversification. Recently, the UAE has been recognized as the leading emerging market in the Middle East and North Africa region, and is ranked third globally, after China and India, in the Foreign Direct Investment Confidence Index (FDICI) 2023 by Kearney’s 2023 Foreign Direct Investment Confidence Index.

Qatar ranks fourth in the Middle East, followed by Saudi Arabia in sixth place, Egypt in fourteenth place, Turkey in fifteenth place, and Morocco in sixteenth place.

For the first time in the 25-year history of the index, a specific ranking for developing markets has been included. According to Kearney, this information is valuable for business leaders seeking to identify the most attractive emerging markets for investment.

“The UAE remains an exceptionally attractive destination for investors, particularly in light of the launch of the Dubai Economic Agenda (D33) — an $8.7 trillion economic plan to boost trade, and investment and promote its status as a global hub,” said Rudolph Lohmeyer, partner at national transformations institute, Kearney Middle East.

According to the UAE Central Bank, the country’s GDP surged by 7.6% last year, marking the highest growth rate in 11 years, following a 3.9% growth in 2021. The banking regulatory authority has maintained its growth prediction of 3.9% this year and foresees the nation’s economy expanding by 4.3% in the following year.

“It is clear that the government remains relentlessly committed to diversifying the UAE’s economy and strengthening the UAE’s business environment,” said Lohmeyer.

“Their disciplined approach to driving the future-readiness of the economy and the country is stunning. Funding this ongoing transformation will continue to benefit from hydrocarbon demand as the energy transition unfolds in various ways and at various speeds around the world,” he added.

Kearney’s annual survey of global business executives, including participants from 30 countries with annual revenue of $500 million, ranks the markets most likely to attract investment over the next three years. The survey includes executive-level managers from all participating businesses.

The UAE is ranked 18th globally in the index, while Qatar and Saudi Arabia are ranked 21st and 24th, respectively. The leading countries in the index are the US, Canada, Japan, Germany, and the UK.

According to the study, Saudi Arabia’s economic achievements were propelled by its robust annual growth rate of 8.7%, comprehensive pro-business reforms, favorable fiscal projections, and rapid advancements in economic diversification.

Additionally, Qatar’s hosting of the World Cup last year generated more investors’ attention, leading to a 4.1% growth in its economy compared to a 1.5% growth in 2021.

Within the next three years, over 75% of respondents are planning to increase their foreign direct investment (FDI), with 86% stating that FDI is crucial to the profitability and competitiveness of their companies. However, despite this optimism, there is concern about potential risks and downsides.

“Our results this year reflect a degree of caution,” said Erik Peterson, partner and managing director of Kearney’s global business policy council. “Investors cited a rise in commodity prices, an increase in geopolitical tensions, and rising political instability in emerging markets as among the top risk factors over the next three years,” Peterson added.