While the federation of seven emirates holds the lead in attracting investors in the Gulf, foreign direct investment dropped to almost $9 billion in 2016 from a peak of $14.2 billion in 2007, according to United Nations data. Some 12.9 percent of stocks traded in Dubai are owned by foreign funds, compared with 6.5 percent in Qatar and 5 percent in Saudi Arabia, according to exchange data compiled by the research arm of EFG-Hermes Holding.

Yet compare that to Turkey where foreigners own nearly 64 percent shares, or Brazil where they held close to 50 percent, and it’s clear that foreigners are still wary of overinvesting in the Gulf’s absolute monarchies—which adds to the pressure Gulf states are under to stay competitive. Most of them have been funding big budget deficits since oil collapsed in 2014 and economic growth is lagging the average for emerging markets.

“This will give the U.A.E. a stronger edge compared with the region,” said Nabil Al Rantisi, managing director at Daman Investments in Dubai. “The neighboring countries still have a long way to go in developing their infrastructure.”

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