This study focuses on FDI in Middle East and North African countries (MENA). To this end, we use data for greenfield investments from FDI Markets that contains information about the number and volume of projects by source and destination countries all over the world for the period 2003-2012. In a first step, we provide a comprehensive outlook of the nature and trend of FDI flowing to MENA. GIs have a relevant role as capital source for most MENA countries, it represents a higher share of GDP for MENA than for other developing countries. As expected, the Great Recession and the beginning of the Arab Spring had a negative impact on investments in this zone since GIs have failed drastically between 2009-2012, compared to the previous period. In a second step, we estimate a gravity equation to explain greenfield investments for 160 countries. Macroeconomic factors, cultural ties, and distance are the main determinants of MNEs’ decision to invest in a foreign country (extensive margin) while the amount of the projects might be determined also by other factors at the firm market levels (intensive margin). Concerning possible specificities of MENA as host countries, our results suggest that cultural ties do seem to have a relevant role across these countries: sharing the same religion and language foster investments in these countries more than in any other region. Distance and FTA lack specific relevance for FDI’s attractiveness in the region. All in all, FDI in MENA are clearly discouraged by cultural distance or informal trade barriers. Our results raise some doubts on usefulness of BIT to foster FDI in MENA like in the rest of the world. Thirdly, we investigate the role of institutional quality as pull determinants of GI. At the world level, democracy, political stability, lack of corruption and business freedom attract FDI while compliance of rule of law, and other indicators of ease of doing business do not appear to have a clear significant impact. Finally, greenfield investments are displaced from countries suffering violence towards neighbors’ countries. Other types of violence do not have at the world level any evident impact. Not all the MENA share these patterns. Improvements in democracy would not improve the attractiveness of MENA non-oil producers but political stability would boost FDI to these countries Besides, they are especially harmed by violence in their neighborhood as far as attracting GI is concerned. All in all, this draws the conclusion that investors may see the political transition to democracy as a source of political instability of the whole region. Worryingly, reducing corruption in these countries would reduce the number of foreign investments flying to non-oil producers MENA. According to our study, improving institutional quality is more likely to foster FDI in MENA oil producers than in MENA no oil producers while the presence of natural resources could be expected to undermine the positive impact of institutions’ quality could have on FDI. This may be explained by the fact that the oil production of such MENA countries is so high and their dependence on FDI so low that governments have not developed special ties with MNEs while in other countries abundant in natural resources, nondemocratic governments have given special treatment to foreign investors.

Oil as a Geo-strategic economic commodity will continue to play at least for the next 100 years a prominent worldly role in shaping Energy Security strategies and policies. This is why the Geo-strategic implications relating to the degree of stabilizing the oil market has increasingly started to gain more attention, concern, interest and momentum by multivariate parties. Another serious dimension that needs to be analyzed further in the foreseeable future in a cautious and calculating manner is the question of the implications of the ‘ArabSpring Revolutions or Uprising’ as fit to be categorized. Thus, according to the recent EIU Study under the title: “Spring Tide: Will the Arab Risings yield democracy, dictatorship or disorder?” Popular uprisings in the Arab world have produced the most dramatic changes in the region since the end of the colonial era in the middle of the 20th century. Admittedly, the fate of these popular uprisings remains in the balance. Building on this dramatic development, Frank A. Verrastro in his article entitled “Security implications of the changing energy landscape” asserted that there is a new energy landscape characterized by five prominent trends or dynamics as follows: shifting demand patterns; the changing resource base; price volatility and investment uncertainty; new players, alignments, and evolving rules; and the threat of climate change and efforts to impose carbon constraints on a fossil fuel – dependent world”. From a wider perspective, the Geo-strategic dimensions will continue to be determined not just by new players, but increasingly by multivariate areas of specific interests or concerns: security, politics, economics, social, status, and the ever changing technologies whereby innovative projects or solutions are constantly surprising the markets particularly with regards to the question of “renewable non-fossil energy options” such as the American Green Project (best known as Obama’s dream for energy security). It seems perceptive to note, that David L. Goldwyn is realistic in stating that “Energy insecurity is greater today than it has been in nearly 30 years. The global oil market is more fragile, more competitive, and more volatile.”

This paper argues that the so-called Arab spring is part of a tectonic shift which signals the frailty of the Arab state system as such. Countries benefitting from oil and gas rents have been more resilient, because of their potential to create systems of incentives and disincentives in order to prevent disruptive social change. Islamism, whose emergence is connected with rentier state dynamics is, at the same time, an opportunity and a threat for the survival of the Arab state and, in general, of the Arab states system. In this context, national oil companies can increasingly be conceptualized not merely as instruments of the state, but as bulwarks of nation-state legitimacy in a period of chaos.