Qatar makes debut on Kearney's 2022 FDI Confidence Index

Qatar has made its debut on Kearney's 2022 Foreign Direct Investment (FDI) Confidence Index, ranking 24th amongst global peers and displacing Finland from the top 25. FDI in the country increased by $8.2m in Q4 2021, compared to a drop of $57.1m recorded in the previous quarter.
The report from the global strategy and management consulting firm is an indicator of future FDI flows around the world, and the rankings reveal rebounding investor optimism about the global economy. The results illustrate both, areas of business leader foresight as well as the blind spots regarding the changes that were on the immediate horizon. Findings from the latest report suggest we are likely to see a continued shift in FDI to developed markets, capitalizing on destinations marked by regulatory transparency and stability. Investors cite transparency of government regulations and lack of corruption as the most important overall factors when choosing where to make FDI.
Qatar has noted relatively lower levels of inward FDI than those of its peers over the past decade. However, changes in legislations aimed at liberalization of the business environment have prompted investors to be more optimistic in recent years. In May 2018, the Qatari government approved a draft law that allows foreign investors to own 100 percent capital in all sectors. Further, companies listed on the Qatar Stock Exchange have increased their foreign ownership limit to 49 percent, most of which had previously been set at 25 percent. 
Kearney's FDI Confidence Index illustrates that Qatar's strong technological and innovation capabilities are a priority factor for investors. Amiable COVID-19 policies, a strong vaccination campaign and the mending of diplomatic ties with neighbouring countries has placed the country on a path to strong socio-economic recovery. The country's economy has rebounded to a growth rate of 2.2 percent in 2021, up from a contraction of 3.6 percent in 2020. 
“Systematic changes in economic policies have contributed to reinforcing and strengthening the national economy and building investor confidence. Qatar's adoption of open economic policies and commitment towards diversifying the economy has made the investment environment far more attractive in recent years. Providing and supporting promising investment opportunities in various sectors, including logistics, technology, manufacturing, food security, health and sports, along with the issuing a law supporting partnership projects between the private and public sectors in the country has gone a long way in changing investor perceptions. The country will be making history as the first in the Arab world to host the 2022 FIFA World Cup; and embracing policy changes while easing business bureaucracy ahead of the event is likely to drive further foreign director investment in the economy,” says Jad Elias, Partner and Qatar Office Lead, Kearney Middle East.
Commenting on the 2022 FDI Confidence Index, Rudolph Lohmeyer, Partner, National Transformations Institute, Kearney Middle East says:“In January, investors had remarkably strong optimism regarding the global economy and FDI relative to the prior year. They did, however, have concerns regarding a rise in commodity prices, escalating geopolitical tensions, and persistent inflation. These concerns have now unfortunately unfolded and been exacerbated by Russia's invasion of Ukraine. For Qatar, the UAE and others in the region positioned as open crossroads in a more fragmented global economy, the FDI outlook remains strong.”
This year's report also includes a thematic section that reflects on how investors view their companies' environmental, social, and governance (ESG) commitments as well as those of their foreign investments.“Investors are clearly enthusiastic about pursuing ESG commitments,” said Erik Peterson, managing director of the Global Business Policy Council and co-author of the study. Indeed, a striking 94 percent of investors agreed that their respective companies had developed a strategy to achieve their ESG commitments, 89 percent view their company's ESG commitments as a source of competitive advantage, and 73 percent said their ESG commitments had become stronger over the past three years. They also point to the role that ESG can play in improving supply chain issues and boosting productivity as among the most important factors driving their company's commitment to ESG. However, Peterson added,“Investors are still frequently split on which ESG goals to prioritize and how to measure them.”

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