Foreign direct investment (FDI) to GCC countries remained steady in 2012 at $26 billion despite a strong decline registered in Saudi Arabia, because of significant FDI growth in all other countries in the group, a report said.

FDI inflows to West Asia in 2012 continued a downturn that began in 2009, added the United Nations Conference on Trade and Industry's (UNCTAD) World Investment Report 2013, reported the Gulf daily News, our sister publication.

The report was launched at a meeting at the Diplomat Radisson Blu Hotel, Residence and Spa yesterday.

FDI to the West Asia region decreased by four per cent in 2012 to $47 billion, half the level of 2008, the report said.

The report, which is subtitled "Global Value Chains: Investment and Trade for Development", was released yesterday at leading financial centres across the world including Bahrain.

"Growing political uncertainty at the regional level and subdued economic prospects at the global level are holding back foreign investors' propensity and capacity to invest in the region," the report said.

The overall figure hides important differences among countries, the study noted.

A large fall in FDI flows was registered in the two main recipient countries - Turkey, down 23 per cent to $12.4 billion and Saudi Arabia, down 25 per cent to $12.2 billion.

However, FDI to these two countries still accounted for 52 per cent of the region's total inflows.

For the first time since 2006, Saudi Arabia ceded its position as the region's largest recipient country to Turkey.

FDI to the UAE increased by 25 per cent to $9.6 billion, continuing a recovery initiated in 2010 but remaining below the level of $14 billion that was reached in 2007.

High public spending by Abu Dhabi and a strong performance by Dubai's non-hydrocarbon sectors helped rebuild foreign appetites for FDI in that country.

Saudi Arabia and the UAE alone accounted for 83 per cent of FDI inflows to the GCC economies.

FDI to Kuwait more than doubled, reaching $1.9 billion, boosted by Qatar Telecom's acquisition of additional shares in Kuwait's second mobile operator Wataniya, which raised its stake to 92.1 per cent.

FDI inflows also increased in Bahrain, Oman and Qatar, the report said.

FDI to non-GCC countries in the region declined by 9 per cent to $21 billion due especially to the large drop in FDI to Turkey.

Lower global growth and a prolonged fiscal tightening in the European Union - Turkey's largest market - have reduced demand for Turkey's exports, thus affecting export-led FDI, according to the report. – TradeArabia News Service