Importance of foreign direct investments

All countries of the world are working to adapt their domestic policies to be more attractive to foreign investment. This policy has been activated in the Sultanate of Oman since the mid-seventies of the last century.

The latest figures published by the Arab Corporation for Guaranteeing Investment and Export Credit for the year 2022 indicate that Oman received $3.716 billion in foreign investment last year, compared to $4.021 billion in 2021, a decline of 7.6%. If we examine the numbers, we find that Oman’s ranking among the Arab countries is good in attracting foreign investment as a result of the efforts made in this regard.

The statistics showed a slight decline in total FDI inflows to the Arab countries during the past year of 3%, to reach about $54 billion. This decline coincides with the decline in foreign investment flows globally by 12.4%, to reach $1.3 trillion in 2022.

There are several reasons for this decline, but according to the report, this is due to the continuation of the Russian-Ukrainian war and its repercussions on the global economy, besides the increasing pressures inflation and tightening financial conditions in most countries of the world.

The Arab countries’ share of foreign investment in 2022 represents about 4.2% of the total global flows and 6% of the total investment flows incoming to developing countries, while there was a geographical concentration of these investments towards three Arab countries that accounted for 78% and the remaining 22% was distributed among the rest of the Arab countries.

Of the total of these financial flows, the United Arab Emirates managed to attract about $22.7 billion last year, with a share of 42.3% of the total, to rank first among the Arab countries, followed by Egypt in second place, with $11.4 billion and a share of 21.2% of the total, then Saudi Arabia ranked third with its acquisition of about $8 billion and a share of 14.7% of the total foreign investment flows, while Oman ranked fourth among 22 Arab countries with a rate of 6.9% of the total flows to the Arab countries.

Oman’s efforts to attract foreign investment in this regard have been strenuous since several years ago, and most of the concerned authorities are working today to create an appropriate and encouraging climate to attract these investments, and to prepare economic zones and provide them with the capabilities and ingredients necessary for investment.

This helps to improve the economic environment in the country, and enhance competitiveness and the policy of economic diversification. Also, the government enacts appropriate laws and legislations by the concerned authorities to attract foreign investment, signing of economic agreements with the world, all of which work to attract more domestic and foreign investments to the country.

Today, we must take advantage of the geopolitical developments taking place in the region and the world in order to attract more foreign investments, and to avoid bureaucratic practices and hesitation in making decisions. Oman has a lot of investment elements and economic potential that would establish more projects in various economic fields.