Examining GCC economic outlook in the coming decade

Examining GCC economic outlook in the coming decade

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Different countries across the world have actually implemented strategies and laws intended to attract international direct investments.

To examine the suitableness of the Gulf here as a destination for foreign direct investment, one must evaluate whether or not the Arab gulf countries provide the necessary and adequate conditions to promote direct investments. Among the consequential criterion is governmental stability. Just how do we assess a country or even a region's security? Political stability depends up to a large level on the content of individuals. Citizens of GCC countries have plenty of opportunities to simply help them attain their dreams and convert them into realities, making many of them satisfied and happy. Moreover, global indicators of political stability show that there is no major political unrest in the region, plus the incident of such an scenario is extremely not likely provided the strong governmental determination plus the vision of the leadership in these counties specially in dealing with political crises. Furthermore, high rates of misconduct can be extremely harmful to foreign investments as investors dread risks like the blockages of fund transfers and expropriations. Nevertheless, in terms of Gulf, economists in a study that compared 200 states deemed the gulf countries as being a low hazard in both aspects. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor may likely testify that several corruption indexes concur that the region is increasing year by year in cutting down corruption.

The volatility associated with the exchange prices is one thing investors simply take into account seriously due to the fact unpredictability of currency exchange rate changes might have an impact on their profitability. The currencies of gulf counties have all been fixed to the US dollar since the late 1990s and early 2000s, and investors such Farhad Azima in Ras Al Khaimah and Oussama el-Omari in Ras Al Khaimah may likely view the fixed exchange rate as an important attraction for the inflow of FDI to the country as investors do not need certainly to be worried about time and money spent manging the currency exchange uncertainty. Another important benefit that the gulf has is its geographical position, located at the crossroads of three continents, the region serves as a gateway towards the rapidly growing Middle East market.

Countries all over the world implement different schemes and enact legislations to attract international direct investments. Some nations such as the GCC countries are progressively adopting pliable regulations, while others have lower labour expenses as their comparative advantage. The advantages of FDI are, of course, mutual, as if the multinational company finds lower labour costs, it is in a position to minimise costs. In addition, in the event that host state can grant better tariffs and savings, business could diversify its markets through a subsidiary. Having said that, the state should be able to develop its economy, develop human capital, enhance employment, and offer usage of knowledge, technology, and skills. Thus, economists argue, that oftentimes, FDI has resulted in effectiveness by transferring technology and know-how to the host country. However, investors think about a many aspects before deciding to move in a country, but among the list of significant variables they give consideration to determinants of investment decisions are geographic location, exchange fluctuations, governmental stability and governmental policies.

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