A new report has revealed that, in 2008, foreign direct investment (FDI) into the Middle East dropped by more than six percent and is predicted to plunge further this year in the midst of the global economic crisis.

As per the United Nations Economic and Social Commission, the present year witnessed a fall by around $60bn in FDI inflows to the Western Asia (ESCWA) region - covering 14 Arab countries -, which was lower from $64bn in 2007.

The report also specified that FDI in the region is expected by ESCWA experts to further fall in 2009, the blame of which goes to economic slowdown that has led to postponement of the completion and execution of several of investment projects.

Three countries, Saudi Arabia, the UAE and Egypt, were listed by the report, which grabbed the lion's share of total FDI flows to the ESCWA region in 2008 and totaled for approx 76 percent of FDI flows to the region.

The report informed, "The performance of these countries is mainly attributed to their successful endeavors to ameliorate their business environment and to their overall investment-friendly climate. In 2008, FDI to Saudi Arabia amounted to $22.5bn, down from $24.3bn a year earlier, a 6.5 percent decline. Foreign investments in the kingdom mainly targeted the real estate sector (21 percent), petrochemicals (16 percent), and the mining industry (10 percent)."

The UAE lured approx $13.7bn during 2008, which was lower by 3.2 percent compared to 2007.

Furthermore, a fall was also seen in FDI flows in 2008 in other ESCWA member countries, including Kuwait, Oman and Yemen.

During 2008, five ESCWA countries saw an increase in FDI, namely - Bahrain, Jordan, Lebanon, Sudan and Syria.

The report continued, "FDI flows to the ESCWA region were concentrated in three main areas of petrochemicals, financial services and the real estate while the US, Japan, UK and France were among the biggest contributors."