Dubai continued to lead the region in attracting FDI and climbed up in global FDI destination rankings in 2016. What is the outlook for FDI inflows to Dubai in the current global business environment?
FDI plays a vital role in strengthening Dubai's economic sustainability and competitiveness. We remain positive about the outlook for FDI inflows to Dubai in the coming years thanks to high investor confidence and the Dubai Plan 2021, which is transforming Dubai into one of the smartest and most sustainable cities in the world. In 2016, Dubai ranked third globally, after London and Singapore, in the number of FDI projects, which is a clear indicator of a strong diversified economic growth. Dubai managed as well to maintain its leading position in the region and ranked seventh in FDI capital inflows despite the challenging global economic environment. Moreover, in a few years Dubai will host Expo 2020. The mega event has already created new opportunities for both leading global businesses and SMEs to be partners in infrastructure development and service delivery.
The bankruptcy law has now been implemented and will presumably boost Dubai's Ease of Doing Business ranking. How does the entity envisage that this will affect the flows of FDI?
There is no doubt that improved regulations address investor concerns and indicate maturity and an improved confidence in Dubai's business environment. Dubai has established clear FDI policy leadership and continues to lead with modern regulatory frameworks to keep pace with the economic shifts and new business models. We see a positive impact on FDI flows moving forward, as we work in close partnership with private sector leaders to introduce new future-ready policy levers and create new opportunities for investors and entrepreneurs.
Dubai FDI launched Dubai FDI Monitor in 2016. How is accuracy being maintained when investments are taking a more unorthodox form; for instance, with freelance visas, emerging sectors becoming more prominent, and companies based upon intangible assets?
Dubai FDI Monitor maps out the investment landscape in Dubai through tracking, validating, and analyzing FDI flows as part of Dubai FDI's data analytics and foresight program. This is the first-ever FDI monitor at a city level and the feedback on the reporting service has been extremely positive. As a service to foreign investors, we support decision-makers who will now be able to analyze FDI trends and opportunities in Dubai by sector, geographic clusters, and source countries. The FDI results and trend analysis reports are based on international classification standards (NACIS) and fDi Markets data as well as our tracking technology and database. We take reasonable steps to ensure that the service provided is accurate and current, taking into consideration that the data is updated in real time. As part of our continual improvement process we are now tracking M&As and new forms of investment, which both reflect the economic maturity of the domestic economic base and allow us to monitor FDI activities of joint ventures, strategic partnerships, alliances, sub-contracting, and license arrangements.
Dubai has been moving up the Global Innovation Index and now ranks as the most innovative Arab nation. Which sources and channels of FDI have been particularly pivotal in assisting that move?
The UAE National Agenda 2021 is set to drive the knowledge economy contribution to reach 5% of GDP. The UAE Innovation Strategy and the Higher Policy for Science, Technology and Innovation played an important role in galvanizing efforts at the federal and local levels to climb up on the Global Innovation Index ranking. Major global players in the financial and ICT industries today choose Dubai as a regional innovation center. FDI in R&D activities in Dubai was 1% of total capital flows in 2015 and it has improved dramatically to reach 5% in 2016.