Middle East companies are planning a major expansion into new markets in Asia and the US despite the global economic slowdown.

Although corporate investors in the major Gulf economies will be splitting their investments between the UAE, Qatar and India in the year ahead, in five years' time their focus will be firmly on India, with the UAE second and China third, said a report in our sister publication, the Gulf Daily News.

These predictions come in a survey of 50 senior corporate investment strategists carried out for KPMG International.

The strategists, representing large multinational companies based in Bahrain, Saudi Arabia, Kuwait, the UAE, Oman, Qatar, and Egypt, were asked a series of questions on which countries, other than their own, they plan to invest in during the year ahead, and in five years' time.

For next year, the UAE is the choice of 26 per cent of investors, followed by Qatar and India, both on 22 per cent. Saudi Arabia, Bahrain and China are joint third on 14 per cent.

But in five years' time, India is the clear leader, with 34 per cent of investors planning to invest. The UAE is second with 22 per cent planning to invest, and China is third with 16 per cent.

Qatar is fourth with 14 per cent, and the US moves ahead of Saudi Arabia, with 12 per cent planning an investment compared with 10 per cent investing in Saudi.

"These responses suggest that large Middle Eastern corporations are set on becoming more international in their operations, but are taking a cautious, step-by-step approach to investment outside the region," said KPMG Egypt partner Abdelhamid Attallah.

"The worldwide problems with credit do not seem to worry these people very much. Only 13 per cent think that this will be a problem for the foreseeable future, and many say that it will affect investment plans for no more than two or three years."

Most of the companies surveyed are in the early stages of international expansion. Around half (46 per cent) will be investing in their chosen countries for the first time.

"We also asked our respondents which countries they expect to be most influential in their sector in the next year and in five years' time," said Attallah.

"The results showed a real change in the balance of economic power."

"Among the Gulf States, Saudi Arabia is expected to be the most influential state in the coming year, followed by the UAE and Qatar.

"But in five years the UAE will be in equal first place, as the investments now being made into service industries in the UAE mature into market influence." - TradeArabia News Service