Foreign direct investments (FDI) in the UAE reached Dh68.63 billion ($18.688 billion) in 2006, up 10.8 per cent from the previous year’s Dh61.91 billion.

The figures were revealed on Monday by Sheikha Lubna bint Khalid Al Qasimi, UAE Minister of Economy, from a survey conducted by the Ministry of Economy (MoE), in coordination with the Economic and Social Commission for Western Asia (ESCWA) and the United Nations Conference on Trade and Development (UNCTAD).

The survey covered companies with at least one non-resident, regardless of nationality, having invested 10 per cent or more of the company’s capital.

Abu Dhabi’s Department of Planning and Economy, the Abu Dhabi Chamber of Commerce and Industry, the Dubai Statistics Centre and Sharjah’s Management Information Systems Department also collaborated on the project.

According to the field survey, which gathered data for the years 2005 to 2006, the main economic sectors instrumental in the substantial FDI growth were the financial intermediation and insurance (34.4 per cent), construction (29 per cent), domestic trade (14 per cent), and manufacturing (10.1 per cent). Dubai posted the largest share at 62 per cent, followed by Abu Dhabi at 24 per cent, while Sharjah contributed 10 per cent. The rest of the emirates contributed 4 per cent to the total FDI.

 The volumes of FDIs posted within the two-year period were significantly higher than previously estimated; the actual 2005 figure surpassed  the original projection by around Dh40 billion, while the actual 2006 figure exceeded expectations by approximately Dh47 billion. The huge gap clearly shows the growing confidence of foreign investors in the country’s investment environment, it said.

Sheikha Lubna said: “It is imperative that we expedite the development of a database of our country’s FDIs, given the increased competition among countries to attract international investments. Our stable investment environment, which enjoys both regional and global prominence, must be enhanced not only systematically but scientifically as well so it can reach its full potential. The UAE Government has in fact adopted a strategy of enhancing its statistical and developmental capabilities, especially as applied to an economic sector as important as foreign investments.”

The survey identified financial intermediation and insurance (35 per cent), building and construction (35 per cent) and domestic trade (14 per cent) as the main economic contributors for Dubai. Financial intermediation and insurance (42 per cent), building and construction (21 per cent) and manufacturing (17 per cent) were the top three for Abu Dhabi; while financial intermediation and insurance (27 per cent), building and construction (26 per cent), and transport, storage and communication (21 per cent) accounted for the biggest shares in Sharjah.

The survey also showed manufacturing  as the largest contributing factor in the rest of the emirates with Umm Al Qaiwain at 99 per cent, Ajman 95 per cent, Ras Al Khaimah 87 per cent, and Fujairah 58 per cent. Extracting industries also contributed a significant 24 per cent of FDIs in Fujairah, while water and electricity accounted for the remaining 5 per cent in Ajman.

The UAE is considered one of the best global locations for FDI as a result of progressive economic liberalization policies and a strong collaboration between the public and private sectors. Its willingness to welcome foreign capital, particularly for the oil and gas industries, has led to a vibrant and continuously evolving economy, differentiating it from other less-open countries in the region, it said.

“Foreign investments are of strategic importance to the UAE. They provide external sources of capital that are necessary for our country’s sustained development. They also fuel the efficient transfer of expertise, knowledge and technology, and affirm our status a