By Andy Sambidge
New report by legal firm Allen & Overy says UAE bucks global trend to target China, India
UAE business leaders believe that the best growth opportunities are close to home, bucking a global trend that favours emerging economies such as China and India, according to a new global report by legal practice Allen & Overy.
Allen & Overy conducted in-depth research among 1,000 global business leaders from large international companies across 19 countries.
The findings showed that, when asked to identify their top three growth markets for the next two to three years, 53 percent of UAE respondents picked Saudi Arabia and 49 percent picked Qatar.
Globally, China proved to be the most attractive destination with 44 percent of all respondents identifying it as one of their three top growth markets, followed by India at 34 percent, then the US on 23 percent and Brazil on 14 percent.
However, the survey also showed that only four percent of UAE respondents picked China as a top growth market.
The survey also said that UAE business leaders were more bullish about their business prospects over the next 24 months than those of any other country, with 80 percent feeling "very confident" and 20 percent "reasonably confident" against a global average of 53 percent being very confident.
"While business leaders globally are focusing on the BRIC countries, it is clear that UAE firms see far greater potential within the Middle East," the survey said.
"Investment flows within the Middle East have proved more resilient to the global downturn than those in Europe, giving cause for confidence among UAE executives," it added.
An analysis of the latest data on global investment flows by the firm also showed that foreign direct investment (FDI) inflows to the UAE were $3.9bn in 2010, marginally lower than the 2009 level of $4bn, and far below the 2005-2008 levels of over $10bn.
FDI outflows stood at $2bn in 2010, lower than the peak of $15.8bn in 2008, but much closer to the 2005 level of $3.7bn.
When asked about economic influence, the findings revealed that 63 percent of UAE business leaders believe the Middle East is growing in economic influence as a region, compared to 34 percent of all respondents who felt the region's influence was increasing.
The UAE's performance was against a wider backdrop of the survey showing Asia Pacific's influence was on the rise and way ahead of other regions.