Investment Monitor‘s investor guide to the Middle East used 26 data points to analyse its countries, highlighting the winners and losers across the region by all measures. Following this, Investment Monitor has selected five countries in the Middle East to watch in 2022.
Oman’s economy is set to grow by 3.3% in 2022, according to a report by the International Institute of Finance.
The increase in demand for oil, alongside the ending of the current Opec+ agreement to allow an increase in oil production, will benefit the country in 2022. A new five-year plan for 2021–25, as part of Vision Oman 2040, has also provided a more tangible outlook for the short term. Reforms are key, Oman having set a 3.2% annual average growth rate in non-oil activities in its GDP. The country plans to diversify its focus to tech, agriculture, fisheries, food processing, transporting, storing and logistics.
On 11 January 2022, Oman and the UK agreed a sovereign investment partnership, only the second of its kind in the Middle East. The deal will strengthen economic ties and increase investment into both countries. In the four quarters to the end of Q2 2021, total trade in goods and services between Oman and the UK was £979m (OR514.4m). The agreement plans to focus on areas such as clean energy and technology. Benefits of the agreement will be seen almost instantly as trade continues to pick up following the downturn as a result of Covid-19.
Qatar will host the FIFA World Cup 2022 in November and December, bringing with it an abundance of opportunities. The country has predicted that hosting the FIFA World Cup will create more than 1.5 million new jobs in key sectors such as construction, real estate and hospitality.
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Organisers hope to attract 1.2 million tourists during the tournament, generating substantial income for the economy. Furthermore, the legacy of the tournament and its increasing profile as a tourist destination should provide longer economic benefits to Qatar.
The country also hopes to attract foreign investors in increasing numbers. In 2019, the government eased restrictions on foreign investment, permitting full foreign ownership of businesses in most sectors. Coupled with a low tax rate of 10% and reinstated diplomatic ties with Saudi Arabia, the country’s attractiveness to investors is increasing.
Keen to move away from a reliance on fossil fuels, Saudi Arabia is increasing its focus on the private sector. The country expects to witness economic growth of 7.4% in 2022, according to its budget document.
Saudi Arabia is pushing to become a tech hub and in August 2021 launched a series of technology initiatives worth more than $1.2bn. It launched the biggest tech programme in the Middle East and North Africa region, which aims to enhance digital capabilities and is designed to create one programmer out of every 100 Saudi nationals by 2030, in addition to encouraging innovation and creativity. A skilled workforce is likely to attract investors and those wanting to enter the country ahead of the curve to benefit from these types of initiatives.
Commitments from tech giants including Apple and Microsoft to open training academies in Saudi Arabia, alongside Google’s plans to set up innovation hubs, will propel the county further into the tech scene.
To continue to attract tech investors, the country is also progressing with its plans for a $500bn AI-powered city, Neom. The first stage is scheduled to open in 2025 and there are plans to extend the city into Egypt and Jordan, making it the first private zone to span three countries.
United Arab Emirates
Following the beginning of celebrations in 2021 for ‘The Year 50’, as the United Arab Emirates (UAE) celebrated its milestone Golden Jubilee, enthusiasm for growth in the next 50 years is building, promptly starting in 2022.
The country has launched its Projects of the 50, a series of developmental and economic projects that aim to accelerate the UAE’s development, transform it into a comprehensive hub in all sectors and establish its status as an ideal destination for talent and investors.
The central bank of the UAE has forecast the economy to grow by 4.2% in 2022. This growth is aided by the increase in oil and gas prices, a rebound in demand for goods and services but also the country’s response to Covid-19.
The country has been hailed for its efforts in fighting the pandemic. It was one of the first countries in the world to launch support packages and initiatives. As a result, the country increased its share of the Middle East’s GDP to 16.1% in 2020, from 15.9% in 2019.
As part of plans for meet its economic growth targets, the UAE aims to attract $150bn in foreign direct investment by 2030. To remain attractive to investors, the country announced all government entities would adopt a new working week schedule from January 2022. This consists of four-and-a-half days from Monday to Friday morning, bringing it more in line with Western schedules. The UAE’s hands-on approach to attracting global investment and talent, alongside incentives and reforms, make it one to watch.
In 2021, Israel's currency, the shekel, was one of the best-performing in the world, reaching a 26-year high in the November. Economic activity rebounded strongly in 2021 and GDP is projected to grow robustly by 6.3% in 2021, 4.9% in 2022 and 4% in 2023, the OECD said in its December 2021 Economic Outlook report for Israel.
Covid-19 strengthened the need for new and innovative technologies, with Israel providing a solid base for investors thanks to its ever-developing tech scene and skilled workforce. Minister of Economy Orna Barbivai noted that for the first time, exports of services, including tech services such as cybersecurity and AI, accounted for 51% of total exports, exceeding exports of goods, which accounted for 49%.
A report published by Start-Up Nation Central also highlighted a stellar year for start-ups in the country, with $25bn raised in funding from January through November 2021 and 33 companies achieving unicorn status.
With demand for technology ever growing, many are pitching Israel as the next Silicon Valley.