foreign direct investment and Middle East economic outlook in the coming decade

foreign direct investment and Middle East economic outlook in the coming decade

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The GCC countries are actively implementing policies to bring in foreign investments.

To look at the viability of the Persian Gulf as being a location for international direct investment, one must assess whether the Arab gulf countries provide the necessary and adequate conditions to encourage direct investments. One of many important elements is governmental stability. Just how do we evaluate a country or perhaps a area's stability? Governmental stability will depend on to a significant degree on the content of citizens. People of GCC countries have an abundance of opportunities to simply help them achieve their dreams and convert them into realities, making many of them satisfied and grateful. Moreover, global indicators of governmental stability reveal that there is no major political unrest in in these countries, plus the incident of such a possibility is extremely not likely given the strong political will and the prudence of the leadership in these counties specially in dealing with political crises. Furthermore, high levels of misconduct can be extremely harmful to international investments as potential investors fear hazards including the blockages of fund transfers and expropriations. Nevertheless, regarding Gulf, specialists in a study that compared 200 counties deemed the gulf countries as a low risk in both aspects. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would probably attest that a few corruption indexes make sure the Gulf countries is improving year by year in reducing corruption.

Countries all over the world implement various schemes and enact legislations to attract foreign direct investments. Some countries for instance the GCC countries are increasingly embracing flexible laws, while others have actually lower labour costs as their comparative advantage. The benefits of FDI are, of course, shared, as if the international company finds reduced labour costs, it will likely be in a position to reduce costs. In addition, if the host state can give better tariffs and savings, the business enterprise could diversify its markets by way of a subsidiary branch. Having said that, the country should be able to grow its economy, cultivate human capital, enhance employment, and provide usage of expertise, technology, and skills. Thus, economists argue, that most of the time, FDI has generated efficiency by transferring technology and know-how to the country. Nevertheless, investors consider a numerous factors before making a decision to move in a country, but among the significant variables they think about determinants of investment decisions are position on the map, exchange volatility, governmental stability and governmental policies.

The volatility associated with the exchange prices is something investors simply take seriously since the vagaries of exchange price fluctuations might have a direct effect on their profitability. The currencies of gulf counties have all been fixed to the US dollar from the mid 1990s and early 2000s, and investors such Farhad Azima in Ras Al Khaimah and Oussama el-Omari in Ras Al Khaimah may likely see the pegged exchange rate being an crucial attraction for the inflow of FDI into the region as investors don't have to be worried about time and money spent manging the . currency exchange instability. Another important advantage that the gulf has is its geographic location, located on the crossroads of Europe, Asia, and Africa, the region serves as a gateway to the quickly growing Middle East market.

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