Amman, July 8 (Petra) – Jordan recorded a substantial 25% surge in Foreign Direct Investment (FDI) inflows in 2025, with total investment volumes reaching $2.022 billion, according to the Arab Investment and Trade Credit Guarantee Corporation (Dhaman).

In a statement issued Wednesday from its headquarters in Kuwait, Dhaman revealed that the Kingdom advanced two spots to rank 7th regionally and 74th globally in its 2025 Composite Investment Climate Index.

Dhaman's 41st Annual Investment Climate Report for 2026 revealed that the overall Arab average stabilized at 102nd globally, indicating a 23-rank gap from the global baseline despite notable index improvements across 13 Arab nations.

The report outlined that rising geopolitical tensions led to a 9% contraction in new greenfield FDI project costs within Arab countries, which totaled $112 billion in 2025. Similarly, United Nations Conference on Trade and Development (UNCTAD) data showed a 10% drop in total FDI inflows to the region, settling at $119.3 billion. More than 80% of these inflows remained concentrated in just three Arab economies, bringing the region's global share down to 7.3%.

To counter these macroeconomic pressures, Dhaman recommended that Arab governments adopt flexible, integrated structural reform frameworks focusing on four priority pillars. The first pillar targets geopolitical and security stability by accelerating peaceful conflict resolution, enhancing regional counter-terrorism and organized crime coordination, and fortifying the rule of law. The second pillar addresses institutional, legislative, and procedural frameworks by streamlining business laws, digitizing administrative transactions, improving governance, and enhancing investor protections via domestic arbitration and political risk insurance. The third pillar emphasizes economic optimization through curtailing inflation, stabilizing national currencies, reforming tax and customs codes, upgrading logistics infrastructure, and incentivizing private sector participation. The final pillar centers on the factors of production, calling for the development of human capital through targeted vocational training, increased labor market flexibility, simplified industrial land acquisition, and diversified financing channels.

The report highlighted distinct performance tiers across Arab economies, with Gulf Cooperation Council (GCC) states, Jordan, and Morocco leading the index. The United Arab Emirates led the region at 17th globally, followed by Qatar at 38th, Saudi Arabia at 40th, Oman at 51st, Kuwait at 52nd, Bahrain at 57th, Jordan at 74th, and Morocco at 75th.

Tunisia at 95th and Egypt at 100th also outperformed the regional average. Conversely, eleven Arab nations – Algeria, Lebanon, Djibouti, Mauritania, Iraq, Libya, Palestine, Syria, Somalia, Sudan, and Yemen – ranked lower on the index, placing between 104th and 158th globally.

Established in 1974 as a joint Arab multilateral institution owned by Arab member states and four major regional financial bodies, Dhaman operates as the world's pioneer multilateral investment insurance provider, dedicated to mitigating political and commercial risks to stimulate capital flows into the region.

//Petra// AA