By Khalid Al-Jaberi

President of  Ousol for Economic and Sustainable Development (OESD)

The Rise of Near-Shoring States

From the Petro-Dollar Era to the Petro-Computer Economy

In 2025, global foreign direct investment (FDI) flows rose to approximately $1.66 trillion, marking a 15% increase compared to 2024, according to OECD data. Yet this increase did not necessarily reflect balanced or sustainable growth as much as it reflected a profound repositioning of global capital within an increasingly volatile economic and geopolitical environment.

The world is no longer investing according to the same logic that shaped global markets over the past several decades.

The United States maintained its position as the world’s largest destination for foreign direct investment, attracting approximately $288 billion in 2025, followed by China with nearly $80 billion and Brazil with roughly $77 billion. At the same time, the United States was also the world’s largest outward investor, with overseas investment flows exceeding $310 billion, followed by Japan and China.

Behind these figures, however, global indicators reveal a far deeper transformation.

A significant portion of the growth in investment flows was not driven by traditional industrial expansion, but rather by:

Meanwhile, new industrial investment across emerging markets experienced a sharp decline, with investment in manufacturing and industrial projects falling by nearly 44%. The bulk of global capital expenditure became concentrated in a limited number of countries, most notably:

Looking ahead to 2026, international forecasts suggest that global uncertainty is likely to persist due to:

This signals that the global economy is gradually entering a new phase — one defined not merely by growth, but by “economic resilience” and the ability to withstand disruption within a rapidly evolving political, technological, and financial order.

The world no longer operates according to the same economic principles that governed the post–Cold War era. The global economic system built upon open globalization, extended supply chains, and low-cost production has begun to fragment under the pressure of geopolitics, technological rivalry, energy instability, and mounting economic and security risks across the globe.

What we are witnessing today is not simply a temporary inflationary episode or a cyclical slowdown in the markets. It is the beginning of a historic transition toward a new global economic model that is redefining the concepts of:

The world has effectively entered the age of “geoeconomics,” where economic decisions are no longer shaped solely by cost efficiency, but increasingly by security, alliances, and strategic resilience.

For this reason, major economies — particularly the United States and Europe — have begun redesigning global production and investment maps according to standards fundamentally different from those that prevailed over previous decades.

The world that once searched for the “cheapest factory” is now searching for:

This transformation has given rise to concepts such as:

These are not merely economic terms; they reflect the restructuring of the global economic order around alliances, economic flexibility, and strategic security.

Major powers no longer fully trust the model of unrestricted globalization, which left the global economy dangerously exposed to:

As a result, the global economy is gradually shifting from an “economy of maximum efficiency” toward an “economy of strategic resilience.”

Within this transformation, the United States and Europe have not abandoned industry, as some believe. Instead, they have redistributed industry according to layers of value creation.

Western economies are now retaining the highest-value and most security-sensitive sectors, including:

Meanwhile, segments of traditional and manufacturing industries are being relocated to allied regions or to countries offering greater logistical and energy stability.

In essence, the West is retaining “the brain of industry” while redistributing “the body of industry” across new strategic geographies around the world.

This explains why industries such as:

are increasingly seeking new locations beyond traditional industrial hubs.

Yet these industries are no longer relocating solely to the cheapest destinations. They are moving toward countries capable of providing:

Here, the Middle East emerges in an entirely different role from that of previous decades.

The region is no longer viewed merely as a supplier of raw energy exports. It is increasingly positioned to become a strategic hub linking:

The world has effectively entered a transition that can best be described as a shift from the:

Petro-Dollar

to the:

Petro-Computer

In the twentieth century, oil power was measured primarily by its ability to generate dollar-denominated financial surpluses.

Today, however, energy itself is becoming the direct fuel of the digital economy.

Artificial intelligence cannot function without enormous electricity capacity, while hyperscale data centers require:

As a result, oil, gas, and electricity have become essential components of global technological influence — not merely financial influence.

This is why Gulf states have increasingly recognized that their future lies not only in exporting crude oil, but in transforming energy wealth into:

This explains the massive investments currently taking place across the Gulf in:

The United Arab Emirates and Saudi Arabia, for example, did not enter the aviation sector by attempting to manufacture complete aircraft from the outset. Instead, they focused on building integrated ecosystems that include:

The same model is now emerging across sectors such as:

Yet one critical reality must be understood: the world will not redistribute these industries equally among all nations.

The global economy has become more selective than ever before.

International capital no longer searches only for large consumer markets or abundant natural resources. It is increasingly searching for “resilient allied states” — countries capable of:

This is why the real competition today is no longer merely between economies, but between models of economic governance themselves.

A slow-moving and bureaucratically overextended state that cannot adapt may find itself excluded from the next generation of global economic positioning — even if it possesses enormous natural resources.

Conversely, other countries may rapidly emerge as industrial, logistical, and economic hubs precisely because of their flexibility and institutional agility.

This is where Iraq’s strategic importance becomes increasingly evident.

Iraq possesses an exceptional geographic location, vast energy resources, a large domestic market, a youthful population, and direct connectivity to regional trade and energy corridors.

Yet despite these advantages, the Iraqi economy still operates largely within a traditional rentier model dependent upon:

At a time when the world is rapidly redesigning the maps of industry, energy, and technology, Iraq’s business environment continues to suffer from:

This not only creates an investment-deterring environment, but also weakens Iraq’s ability to integrate into the emerging global economic transformation.

The world today does not wait for slow economies, nor does it grant extended opportunities to states incapable of adaptation.

For this reason, genuine economic reform is no longer an intellectual luxury or a postponed political option. It has become an economic and strategic necessity for survival.

Iraq today must transition from:

toward:

It must build what may be described as an “economically resilient state” — one capable of:

Iraq also requires a new economic vision — one that understands the world not merely as an oil market with fluctuating prices, but as a global system undergoing profound structural transformation.

The next economic battle will not be fought over oil alone, but over:

Therefore, the real question Iraq must ask itself today is not merely:

“How do we increase revenues?”

But rather:

“How do we transform into a state capable of integrating into the new global economy before the next maps of economic positioning are permanently drawn?”