Repression + Dictatorships + Human Rights Abuses = Lower Investment + Higher Insurance Costs

Arab states have suffered a slump in foreign direct investment of as much as 24 percent this year as political unrest sweeps the region, according to the group that insures such funding against non-commercial risks.

Foreign financing will shrink to between $50 billion and $55 billion in 2011 from $66.2 billion the previous year, the Arab Investment & Export Credit Guarantee Corp., known as Dhaman, said in an e-mailed response to questions.

The total value of insurance operations concluded by Dhaman in the first eight months was about $780 million, “a significant increase” versus last year, indicating heightened concern, Fahad al-Ibrahim, its director-general, said in the e-mail.


Egypt is worst affected, with foreign direct investment dropping an estimated 92 percent to $500 million, according to a report issued by Dhaman in October. Tunisia, where the so-called Arab Spring began, is estimated to have drawn $1.2 billion in funding this year, a decline of 20 percent, the report said.


Kuwait-based Dhaman’s figures, which have not been verified by individual governments, suggest Libya received about $500 million, down 87 percent, and Syria $484 million, where unrest continues, a decline of 65 percent. Bahrain, which witnessed anti-government protests by the majority Shiite population, may have suffered a 36 percent drop to $100 million.