The GCC economic outlook in the coming decade

The GCC economic outlook in the coming decade

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The GCC countries are actively implementing policies to attract foreign investments.

The volatility of the currency rates is one thing investors just take seriously due to the fact vagaries of currency exchange price changes might have an impact on the profitability. The currencies of gulf counties have website all been fixed to the US currency 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 fixed exchange price being an crucial attraction for the inflow of FDI in to the country as investors don't need to be concerned about time and money spent manging the currency exchange risk. Another crucial benefit that the gulf has is its geographic position, located on the crossroads of three continents, the region serves as a gateway to the quickly growing Middle East market.

To look at the viability of the Persian Gulf as a destination for foreign direct investment, one must evaluate whether the Arab gulf countries provide the necessary and sufficient conditions to promote FDIs. Among the important aspects is governmental security. How do we evaluate a state or perhaps a region's stability? Political security will depend on up to a large level on the content of individuals. Citizens of GCC countries have a good amount of opportunities to help them attain their dreams and convert them into realities, helping to make a lot of them content and happy. Additionally, global indicators of political stability reveal that there's been no major political unrest in in these countries, plus the incident of such an eventuality is highly unlikely provided the strong political determination as well as the prescience of the leadership in these counties particularly in dealing with political crises. Furthermore, high levels of misconduct can be hugely detrimental to foreign investments as potential investors fear hazards like the blockages of fund transfers and expropriations. Nonetheless, in terms of Gulf, economists 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 may likely attest that several corruption indexes confirm that the GCC countries is improving year by year in cutting down corruption.

Countries all over the world implement various schemes and enact legislations to attract foreign direct investments. Some countries like the GCC countries are increasingly embracing flexible laws and regulations, while some have cheaper labour expenses as their comparative advantage. The advantages of FDI are, needless to say, shared, as if the multinational company finds reduced labour costs, it'll be able to cut costs. In addition, if the host state can grant better tariffs and savings, business could diversify its markets via a subsidiary. On the other hand, the state will be able to develop its economy, develop human capital, enhance employment, and offer usage of expertise, technology, and skills. Thus, economists argue, that oftentimes, FDI has resulted in effectiveness by transmitting technology and know-how to the host country. However, investors look at a myriad of aspects before carefully deciding to invest in a state, but among the significant factors that they give consideration to determinants of investment decisions are geographic location, exchange volatility, political security and governmental policies.

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