His Excellency Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications, Managing Director of the World Government Summit Organization, stated that the global changes that occurred due to the Covid-19 pandemic has imposed radical changes in how governments work; it has emphasized that social and economic priorities are key in the work of governments.

This came on the occasion of the launch of a new report for the World Government Summit, in partnership with global management consultancy Oliver Wyman, titled "De-risking the Investment Landscape... High-impact FDI policies for the GCC", which is part of a series of new reports that aim to foresight the future of governments in a post-pandemic phase. The reports aim to propose and recommend the new mechanisms and methodologies that are based on latest innovations, best practices, and smart solutions to enable the next generation of governments.

Omar Sultan Al Olama said: "The series of reports by the World Government Summit, in cooperation with its knowledge members, reflect the summit's endeavor to enhance government knowledge, highlight the most prominent global trends and transformations, support governments in harmonizing their future plans, chart the future of key sectors, and enhance the level of readiness."

“Oliver Wyman is proud to once again be a part of the World Government Summit,” said Pedro Oliveira, Managing Partner IMEA Region at Oliver Wyman. “The Summit provides an important international platform for many actionable forward-thinking initiatives at a time when nations are navigating out of one of the most challenging years in recent times. We look forward to addressing the key topic of FDI (foreign direct investment) in GCC states and supporting regional and global recovery through our expertise and thought leadership.”

The report highlights the significant decline in foreign direct investment globally, which is 42% in 2020, approximately $859 billion, down from $1.5 trillion in 2019, and that is due to the uncertainty caused by the Covid-19 pandemic; These numbers are the lowest recorded since the 1990s, highlighting that it is also 30% lower than the level of foreign direct investment in 2009 after the global financial crisis.

The decline was evident in developed countries, with flows declining by 69%, to reach approximately $229 billion, while foreign direct investment flows to North America decreased by 46% to reach $166 billion, with a decrease in cross-border mergers and acquisitions by 43%. There was also a significant decline in investments on projects that were already announced by 29%, and a 2% evident decline in financing deals.

Although incoming foreign direct investment for developing economies decreased by 12%, recording about $616 billion, these economies accounted for 72% of global foreign direct investment, which is the highest percentage of foreign direct investment flows.

The report indicates that the Arab Gulf states, during the past few years, began to consider foreign direct investment as an essential element in their long-term policies aimed at economic development and diversification. This shift is due to the growing realization of the potential of big economic impact that the foreign direct investment will generate; and how it is crucial to focus on innovation and investing in human capital; both of which are two key factors that make foreign direct investment more valuable than just an external source of financing.

FDI in the Arab Gulf region have witnessed a steady increase since 2017, by 26% and that is during the period from 2017 to 2019. The main reason for this increase is the effort put forth by both the United Arab Emirates and Saudi Arabia in this field, and it also reports that the Sultanate of Oman and Bahrain recorded an increase in Foreign direct investment relative to GDP (Gross Domestic Product).

The report also indicates that to face the current state of uncertainty, the Arab Gulf Countries must prepare for a range of scenarios, and develop strong policies with specific strategic objectives that will contribute to enhancing the long-term structural attractiveness of the main economic sectors for foreign investors.

The report has also showcased a set of successful targeted policies in attracting foreign direct investment, such as the Dubai International Financial Center, which strengthened Dubai's leadership regionally and globally in the field of financial services; which led to it becoming among the top 10 cities in the global financial centers index. The report also specifies that the center succeeded in registering assets worth more than 178 billion dollars and 820 companies. The Report also highlighted the success of the Khalifa Industrial Zone in Abu Dhabi (KIZAD) in attracting investments amounting to about $20 billion.

The report has also showcased the efforts and experiences of the Royal Commission for Jubail and Yanbu in the Kingdom of Saudi Arabia in which it has diversified the sources of its economic activity and reduced its dependence on the extraction of crude hydrocarbons. The report also pointed that each city has developed into an urban industrial center by making use of the current advantages in the petrochemical sector in the broader economic development, and that Jubail attracted foreign direct investments worth more than 30 billion dollars, while Yanbu attracted 8 billion dollars in investments.

The report suggests that the global pandemic has negatively affected foreign direct investment worldwide, bringing the decline to a record number not witnessed in the world since World War II. There is still a lot of ambiguity on how soon will foreign direct investment recover on a global scale; however, most estimates point to a slight recovery in 2021, with absolute values remaining much lower than in previous years.

The report suggested that global economic factors would make it more difficult to increase foreign direct investment in the near future, in light of the financial shock that many economies were exposed to, which could have been a source of large inflows.

The report recommended strengthening fiscal incentives to attract foreign direct investment in all countries in the region; encouraging them to take advantage of the relatively low tax rate compared to many other countries in the world.

The report also highlighted how important it is for decision-makers in the economic sectors to support the development of more flexible financial and regulatory policies, to enhance outreach and levels of international trade relations as well asalign with sovereign wealth funds to unite efforts in attracting foreign direct investment. The report also emphasized the importance of reducing broader investment barriers, carrying out comprehensive regulatory reforms that help ensure the sustainability of foreign investments, and open markets to international companies.

The World Government Summit recently announced the signing of 8 new knowledge memberships with a selection of the most prominent consulting agencies and global research institutes, to launch a series of reports and studies that will identify the most important trends and opportunities to support governments, and enhance their readiness for the future.

These reports will focus on foresighting the future of governments around the world, studying global transformations and challenges facing humanity, defining priorities and requirements for the next era, and developing new work mechanisms and methodologies based on modern data to empower the next generation of governments.