The GCC economic outlook in the coming decade

The GCC economic outlook in the coming decade

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Governments globally are implementing different schemes and legislations to attract international direct investments.

The volatility of the exchange prices is something investors simply take seriously due to the fact unpredictability of currency exchange rate changes may have a visible impact on their profitability. The currencies of gulf counties have all been pegged to the United States 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 pegged exchange price as an crucial seduction for the inflow of FDI to the country as investors don't need to worry about time and money spent manging the forex uncertainty. Another essential advantage that the gulf has is its geographical position, located on the intersection of Europe, Asia, and Africa, the region serves as a gateway towards the quickly growing Middle East market.

Nations across the world implement various schemes and enact legislations to attract foreign direct investments. Some countries for instance the GCC countries are progressively embracing flexible regulations, while some have reduced labour costs as their comparative advantage. The many benefits of FDI are, needless here to say, shared, as if the international corporation finds reduced labour costs, it is in a position to reduce costs. In addition, in the event that host country can grant better tariffs and savings, the company could diversify its markets through a subsidiary branch. On the other hand, the country should be able to develop its economy, develop human capital, increase employment, and offer usage of expertise, technology, and abilities. Hence, economists argue, that most of the time, FDI has generated efficiency by transmitting technology and knowledge towards the country. However, investors consider a many factors before making a decision to invest in new market, but among the significant factors that they consider determinants of investment decisions are geographic location, exchange fluctuations, political security and government policies.

To examine the suitability of the Persian Gulf as being a location for international direct investment, one must assess if the Arab gulf countries give you the necessary and sufficient conditions to encourage direct investments. One of the consequential aspects is political stability. How can we assess a country or even a area's stability? Governmental stability depends up to a large degree on the satisfaction of individuals. People of GCC countries have an abundance of opportunities to help them attain their dreams and convert them into realities, which makes most of them content and happy. Furthermore, international indicators of political stability unveil that there is no major governmental unrest in the area, plus the occurrence of such a eventuality is very unlikely because of the strong political will plus the vision of the leadership in these counties specially in dealing with crises. Moreover, high levels of corruption can be hugely detrimental to international investments as potential investors dread hazards such as the obstructions of fund transfers and expropriations. Nonetheless, when it comes to Gulf, political scientists in a study that compared 200 states deemed the gulf countries as being a low hazard in both categories. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor would probably testify that several corruption indexes make sure the Gulf countries is improving year by year in eliminating corruption.

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