What Affects FDI Inflows to Lebanon?
The United Nations Conference on Trade and Development (UNCTAD) mentioned that flows to Lebanon in 2011, were affected by the slowdown in the Lebanese real estate sector,which is the most important recipient of FDI, due to the adverse spillovers of both the global financial crisis and regional unrest. Figures released by the (UNCTAD) show that foreign direct investment (FDI) in Lebanon totaled $3.2bn in 2011, constituting a decrease of 25.2% from $4.3bn in 2010. FDI inflows to Lebanon totaled $4.8bn in 2009, $4.3bn in 2008 and $3.4bn in 2007, as reported by Lebanon This Week, Byblos Bank economic publication.
Lebanon was the third largest recipient of FDI in nominal terms among 19 Arab countries, the sixth largest among the 22 economies of the MENA region, and the fourth largest in West Asia in 2011. Also net FDI inflows to Lebanon totaled $2.3bn in 2011, making the country the third largest destination of net inflows in the Arab world.
Also, Lebanon posted the seventh steepest drop in FDI among Arab coun- tries and in the MENA region last year. Lebanon was one of 10 Arab and MENA countries that saw a fall in FDI inflows in 2011. In comparison, FDI to Arab economies declined by 35.6% year-on-year, contracted by
11.4% to MENA countries and dropped by 16.3% to West Asia; while FDI to developing economies grew by 11% and global FDI rose by 16.5%. In parallel, Lebanon ranked in 10th place globally and was the only Arab economy among the top 10 worldwide on the Inward FDI Attraction Index, while it ranked in 92nd place globally and in 14th place in the Arab world on the Inward FDI Potential Index.
FDI inflows to Lebanon accounted for 8% of total FDI in Arab countries and for 4.4% of inflows to the MENA region in 2011, compared to 6.8% in the Arab world and 5.3% regionally in 2010. They also represented 6.6% of total flows to the 13 countries that form West Asia, 0.5% of FDI inflows to developing countries, and 0.2% of global foreign direct invest- ment in 2011.
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