I recently participated in a panel discussion at the 9th Edition of the Future Investment Initiative in Riyadh, Saudi Arabia, exploring a question that has gained urgency in recent years: Is foreign direct investment moving away from the West? The conversation revealed a tension between perception and reality; while headlines suggest capital is fleeing Western markets, the fundamentals tell a more complex story about where investment flows and why.
Moderated by CNN correspondent Eleni Giokos, the discussion brought together Former U.S. Secretary of State Mike Pompeo, Bahrain’s Minister of Sustainable Development Noor Ali AlKhulaif, and Jordan’s former Minister of ICT Nadia Al Saeed. Secretary Pompeo made a straightforward observation: U.S. Treasury yields remain attractive, the dollar continues to dominate global reserves, and major economies are still making significant investment commitments to the United States. Japan alone announced a $550 billion investment commitment, yet global FDI has declined for two consecutive years, reflecting genuine uncertainty in international markets.
What became clear is that investment decisions today are driven less by geography and more by fundamentals: regulatory clarity, ease of doing business, talent availability, and legal protections. Minister AlKhulaif described how Bahrain has positioned itself as a service hub for the region by prioritizing agility, robust financial regulation, and comprehensive support for human capital development. The country’s non-oil economy now represents 85% of GDP, a deliberate result of decades of reform. Similarly, Minister Al Saeed highlighted Jordan’s focus on education, technology, and strategic alignment with global industries, particularly in sectors like health tech, EdTech, and cybersecurity.
From a legal standpoint, two key shifts are redefining the investment environment. The first is the decline of bilateral investment treaties (BITs), longstanding agreements that offered foreign investors neutral arbitration and protection against unfair treatment. Countries such as India, Indonesia, and several in Latin America have terminated dozens of these treaties, raising questions about how investors will secure recourse in future disputes.
The second is the rise of inbound investment screening mechanisms. What began in the U.S. with the Committee on Foreign Investment (CFIUS) has now expanded to more than 100 jurisdictions. Cross-border deals, particularly in technology, often require multiple layers of clearance before closing, adding complexity, cost, and delay.
These developments mean that due diligence today must go beyond financial and commercial assessment. Investors can no longer assume that the legal framework that existed when they started evaluating a deal will still be in place when they’re ready to close. National interests are increasingly intersecting with economic policy, and what’s permissible today may not be permissible tomorrow.
Despite these challenges, the panel concluded on a measured but optimistic note. The Gulf region is demonstrating how strategic policy, investment in human capital, and regulatory innovation can attract capital even in uncertain times. The competition for investment is intensifying, but so are the opportunities for jurisdictions willing to provide what investors need: stability, transparency, and enforceable legal protections.
As global capital continues to seek reliable markets and strong returns, the question is not whether FDI is moving away from the West – it’s whether governments everywhere are prepared to offer the legal and regulatory frameworks that allow investors to commit with confidence.
Watch our full discussion here.
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