“Dhaman”: The Capex of Foreign Investment Projects

 in Arab Countries Declined to $112 billion in 2025

Due to Geopolitical Developments

The Corporation recommended adopting programs to improve the political, security, economic, legislative, and procedural environment

GCC countries, along with Jordan and Morocco, ranked at the forefront of Arab countries in the Dhaman Investment Climate Index

Priority should be given to reforms that are easier to implement, less costly, more effective, and faster to execute, with a particular focus on expanding and enhancing e-government services

Please, use the following images:

The cover of the report of the investment climate in Arab countries for 2026

A diagram of the report’s major findings for 2026

State of Kuwait: 8-7-2026

The Arab Investment & Trade Credit Guarantee Corporation (Dhaman) revealed that the average Arab ranking remained stable at 102nd place globally in its composite index of investment climate components for 2025. This reflects the continued gap from the global average ranking of about 23 places, despite 13 Arab countries recording an improvement in their rankings within the index.

In its 41st Annual Investment Climate Report 2026, launched today from its headquarters in the State of Kuwait, the Corporation recommended adopting integrated and flexible programs to enhance the Arab investment environment. These recommendations focus on four key areas: political and security; institutional, legislative, and procedural; economic; and the production elements; this comes particularly after the Capex of foreign direct investment FDI projects in the Arab world declined by 9%, falling to $112 billion in 2025 due to geopolitical developments.

As for the inward foreign direct investment (FDI) flows to the Arab countries, they declined by 10.1% to reach approximately 119. 3 billion USD in 2025, according to UNCTAD estimates.

 With its continued concentration at more than 80% in 3 Arab countries, namely the UAE, which attracted 48.2 billion USD, representing 40.4% of the total; Saudi Arabia, with 32.6 billion USD, accounting for 27%; and Egypt, with 15.4 billion USD, representing 13%.

This coincides with the decrease in the region's share to 7.3% of the global total and 13.3% of the total for developing countries.

At the political and security levels, the Corporation underscored the importance of intensifying peaceful efforts to resolve conflicts and strengthening regional coordination to combat terrorism, organized crime, and external interference. It also emphasized the need to modernize security systems, de-escalate civil unrest, and reinforce the rule of law.

As for the institutional, legislative, and procedural environment, the report recommended updating and simplifying investment and business laws to keep pace with developments transparently, with digitizing and automating procedures and reducing their duration, with the need to strengthen governance, quality control systems, and develop the justice and law enforcement system to protect investors and their rights through local legislation, international agreements, and advanced arbitration services, in addition to providing insurance against political and commercial risks.

With respect to the economic environment, the institution stressed the adoption of policies to curb inflation to enhance currency stability, reform the tax and customs systems, and develop infrastructure and logistics. It also called for empowering the private sector and stimulating its participation and diversifying economic resources by offering additional benefits and incentives to targeted sectors.

Concerning the production elements, the report emphasized the importance of developing human capital and bridging the skills gap through education and training and increasing labor market flexibility, making industrial and service land available and accessible, and diversifying and facilitating direct financing channels while activating the role of banks and financial institutions. The demands also included localizing knowledge, stimulating research and development in the production and service sectors, and securing local supply chains, intermediate inputs, and essential components.

The organization called for several points to be considered, most notably: learning from the experiences of countries that have successfully improved their investment environment and rankings in international indices; starting with the easiest and most effective; relying on technology and e-services; and taking into account the differences between countries in terms of resources, capabilities, and challenges.

The report also highlighted the ranking of Arab countries in the 2025 Composite Investment Climate Index, revealing that the Gulf Cooperation Council (GCC) countries, Jordan, and Morocco led the Arab world. The UAE ranked first regionally and 17th globally, followed by Qatar in second place regionally and 38th globally, then Saudi Arabia in third place regionally and 40th globally. Oman came in fourth regionally and 51st globally, followed by Kuwait in fifth place regionally and 52nd globally. Bahrain ranked sixth regionally and 57th globally, then Jordan in seventh place regionally and 74th globally, and finally Morocco in eighth place regionally and 75th globally.

Tunisia and Egypt also achieved better rankings than the Arab average, placing 95th and 100th globally, respectively. In contrast, 11 other Arab countries (Algeria, Lebanon, Djibouti, Mauritania, Iraq, Libya, Palestine, Syria, Somalia, Sudan, and Yemen) ranked near the bottom of the list, ranging from 104th to 158th globally, respectively.

In its concluding remarks, the institution reaffirmed its commitment to continuing its pivotal role as the world's first multilateral investment insurance body since its establishment in 1974, and to working to overcome the structural and political obstacles hindering capital flows between Arab countries and from the rest of the world.

It noted that it provides comprehensive insurance umbrella for investors against political risks (such as expropriation, nationalization, war and civil disturbance, transfer restrictions, and government breach of contract), in addition to insuring Arab trade and its financing against political and commercial risks, which encourages banks to finance development projects and deals at preferential interest rates and with longer repayment periods, as well as its advisory role to governments through monitoring, assessing and providing recommendations to develop the investment climate in the region.