Barriers and Opportunities for Enhancing Capital Flows

In the COMCEC Member Countries

Figure 1.8: Magnitude of FDI flows by range for COMCEC Member Countries within the

upper-middle income group, 2012

Source: UNCTAD World Investment Report 2013

High-Income Countries (HICs)

All countries in the high-income group except Brunei belong to the GCC. These GCC economies

are enjoying high economic growth on the back of historically high oil prices, expanded oil

production, expansionary fiscal policies, and low interest rates. At the same time, however, the

economies remain dependent on hydrocarbon extraction, while rising government spending

has raised breakeven oil prices, implying heightened vulnerabilities. A number of patterns can

be identified among countries in this group.



The pattern of capital flows – particularly FDI – has been somewhat volatile over the

past decade for GCC economies. For example, from 2000 to 2008 net investments by

the GCC abroad were higher than net investments by foreigners in the GCC. As

elsewhere, inflows into GCC countries have been affected by global conditions. In 2007,

GCC countries’ inward FDI peaked. In return, Bahrain, Kuwait, Qatar, Saudi Arabia and

the UAE invested as much abroad as they received in the form of inward FDI.



According to UNCTAD, annual FDI inflows to the GCC averaged 6% of GDP between

2005 and 2011. Although data on the geographical distribution of inward FDI are

limited, available data for Kuwait and Saudi Arabia suggest that a large share of FDI

originated from within the GCC. However, over 23% of total FDI in Saudi Arabia came

Bahrain, Brunei Darussalam, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates

UMIC (16)

FDI flows, 2012

Malaysia

$10-49bn

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Turkey

>$10bn

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Iran

$1.0-9.9bn

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Kazakhstan

>$5bn

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Azerbaijan

$1-4.9bn

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Iraq

$1-4.9bn

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Jordan

$1-4.9bn

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Lebanon

$1-4.9bn

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Turkmenistan $1-4.9bn

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Algeria

$1-1.9bn

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Tunisia

$1-1.9bn

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Albania

$0.5-0.9bn

Gabon

$0.5-0.9bn

Maldives

$0.1-0.4bn

Suriname

<$0.1bn

Libya