The GCC economic outlook in the coming decade

Governments internationally are adopting various schemes and legislations to attract foreign direct investments.

To examine the viability of the Arabian Gulf as a location for international direct investment, one must evaluate whether or not the Arab gulf countries give you the necessary and adequate conditions to encourage direct investments. One of many consequential variables is political security. How do we evaluate a state or even a area's security? Political stability will depend on up to a large extent on the satisfaction of residents. Citizens of GCC countries have a lot of opportunities to help them achieve their dreams and convert them into realities, making a lot of them content and grateful. Additionally, international indicators of political stability show that there is no major political unrest in the region, and also the incident of such a scenario is very unlikely given the strong governmental determination as well as the prescience of the leadership in these counties especially in dealing with political crises. Moreover, high levels of misconduct can be hugely detrimental to foreign investments as investors fear risks including the obstructions of fund transfers and expropriations. Nonetheless, when it comes to Gulf, political scientists in a study that compared 200 counties categorised the gulf countries as being a low danger in both aspects. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that a few corruption indexes confirm that the region is improving year by year in eliminating corruption.

Countries around the globe implement various schemes and enact legislations to attract international direct investments. Some nations for instance the GCC countries are increasingly embracing flexible legislation, while some have lower labour expenses as their comparative advantage. The benefits of FDI are, needless to say, mutual, as if the international company finds reduced labour costs, it will be in a position to cut costs. In addition, in the event that host country can grant better tariffs and savings, the business could diversify its markets via a subsidiary branch. On the other hand, the state should be able to grow its economy, develop human capital, enhance job opportunities, and offer usage of expertise, technology, and abilities. Hence, economists argue, that most of the time, FDI has led to efficiency by transmitting technology and know-how to the host country. However, investors consider a numerous factors before making a decision to move in a country, but among the list of significant variables they think about determinants of investment decisions are geographic location, exchange fluctuations, governmental security and government policies.

The volatility of the exchange rates is something investors simply take seriously as the unpredictability of exchange rate changes could have a direct effect on their profitability. The currencies of gulf counties have all been fixed to the US currency more info from the mid 1990s and early 2000s, and investors such Farhad Azima in Ras Al Khaimah and Oussama el-Omari in Ras Al Khaimah would likely view the fixed exchange price as an essential seduction for the inflow of FDI to the region as investors do not need to worry about time and money spent handling the foreign currency uncertainty. Another crucial benefit that the gulf has is its geographic position, located on the crossroads of three continents, the region serves as a gateway towards the quickly growing Middle East market.