reviewing GCC economic growth and foreign investments

reviewing GCC economic growth and foreign investments

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Various countries around the world have implemented strategies and regulations designed to attract international direct investments.

To look at the viability of the Gulf being a destination for international direct investment, one must evaluate whether or not the Arab gulf countries provide the necessary and sufficient conditions to encourage FDIs. Among the important factors is governmental stability. How do we assess a country or even a area's security? Governmental stability will depend on to a large extent on the content of individuals. Citizens of GCC countries have plenty of opportunities to greatly help them achieve their dreams and convert them into realities, making most of them content and happy. Moreover, global indicators of political stability reveal that there has been no major political unrest in the region, as well as the incident of such an scenario is very unlikely provided the strong governmental will and the prescience of the leadership in these counties specially in dealing with crises. Furthermore, high levels of misconduct can be extremely detrimental to international investments as investors fear risks like the blockages of fund transfers and expropriations. Nonetheless, in terms of Gulf, political scientists in a study that compared 200 states categorised the gulf countries being a low hazard in both categories. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor may likely attest that a few corruption indexes confirm that the region is enhancing year by year in eliminating corruption.

The volatility associated with the currency prices is something investors just take seriously since the vagaries of exchange price fluctuations could have a direct impact on the profitability. The currencies of gulf counties have all been pegged to the US dollar from 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 see the pegged exchange rate being an important seduction for the inflow of FDI in to the region as investors do not need to worry about time and money spent manging the foreign currency instability. Another important benefit that the gulf has is its geographical position, located at the crossroads click here of Europe, Asia, and Africa, the region serves as a gateway to the quickly growing Middle East market.

Nations across the world implement different schemes and enact legislations to attract foreign direct investments. Some countries such as the GCC countries are increasingly adopting flexible regulations, while others have actually reduced labour expenses as their comparative advantage. The benefits of FDI are, needless to say, shared, as if the multinational organization finds lower labour expenses, it will likely be able to cut costs. In addition, in the event that host country can grant better tariffs and savings, business could diversify its markets through a subsidiary. On the other hand, the country will be able to grow its economy, develop human capital, increase job opportunities, and offer usage of knowledge, technology, and abilities. Thus, economists argue, that most of the time, FDI has led to efficiency by transmitting technology and know-how to the country. Nonetheless, investors consider a many factors before making a decision to invest in a country, but among the list of significant variables which they give consideration to determinants of investment decisions are location, exchange fluctuations, governmental stability and government policies.

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