KUWAIT CITY - Foreign investment in Arab states surged in 2003 after a sharp decline the previous year apparently as a result of the September 11, 2001 attacks in the United States, a report said Wednesday.
Inflows to 21 Arab countries totaled 8.62 billion dollars last year, up 60 percent 5.38 billion dollars in 2002, a report by the Kuwait-based Inter-Arab Investment Guarantee Corp said.
In 2001, total foreign investment reached 7.71 billion dollars, which means inflows dipped 30 percent in 2002. That was the first decline since 1999, the report said.
Arab economic officials and experts have said the September 11 attacks have taken their toll on the drive by Gulf states in particular to attract foreign investment, seen as crucial to diversifying their oil-dependent economies.
Investment inflows last year increased in 13 Arab countries and dropped in six others. There were no investments in Iraq and areas of the Palestinian Authority.
The largest increase was recorded in Morocco. where foreign investment rose from 481 million dollars in 2002 to 2.28 billion dollars last year.
Sudan came in second, as investment grew to 1.35 billion dollars in 2003 from 713 million dollars the previous year. Foreign investment in Jordan reached 379 million dollars last year compared to a meagre 56 million dollars in 2002.
Algeria topped the list of countries where investments declined. Foreign capital inflow dropped from 1.065 billion dollars in 2002 to just 634 million dollars last year.
Other Arab countries which saw foreign investments decline include Egypt, Qatar, the United Arab Emirates, Tunisia and Yemen.
Foreign investment inflows into OPEC kingpin Saudi Arabia increased from a negative 615 million dollars in 2002 to 208 million dollars last year. The figure remains way below a peak at 4.3 billion dollars in 1998.
Based on the latest figures on the status of investment worldwide provided by the United Nations Conference on Trade and Development (UNCTAD), the report said that Arab share of total investment inflows was only 1.54 percent in 2003.
From 1995 to 2003, Arab countries attracted foreign investments worth 46.7 billion dollars, or just 0.73 percent of the world's total in that period.
Morocco topped the list with nine billion dollars, followed by Egypt with 6.9 billion dollars, Algeria 4.9 billion dollars and Tunisia 4.8 billion dollars.
Total inflows worldwide reached 559.5 billion dollars in 2003, down from 678.8 billion dollars the previous year.
Developed countries accounted for 366.6 billion dollars (65.5 percent), developing countries 172 billion dollars (30.74 percent) and Central and Eastern European countries received 21 billion dollars, or 3.76 percent.
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