2013 Reports

The Arab Awakening, act II: Time to move more boldly on investment

O’Sullivan, Anthony; Böhmer, Alexander

Following the Arab Awakening in late 2010, the decline of foreign direct investment (FDI) in the Middle East and North Africa (MENA) from US$ 63 billion in 2010 to US$ 39 billion by the end of 2011, was significant, albeit with important differences among countries. FDI inflows continued to slow slightly in 2012 and are expected to remain flat in 2013. Although FDI inflows for the region as a whole were affected by a number of factors, including the crisis in global financial markets, the sharp decrease was also related to a loss of investor confidence and political instability that affected both oil importing and exporting countries. For example, in Egypt FDI inflows fell from US$ 6.4 billion in 2010 to a net disinvestment of US$ 483 million in 2011.Sectors in the region that were hardest hit included agribusiness, construction, light manufacturing, renewable energies, and tourism.