Examining GCC economic outlook in the coming decade

As countries across the world make an effort to attract international direct investments, the Arab Gulf stands apart being a strong potential destination.

Countries around the world implement various schemes and enact legislations to attract foreign direct investments. Some nations such as the GCC countries are progressively embracing pliable legislation, while others have lower labour expenses as their comparative advantage. Some great benefits of FDI are, needless to say, shared, as if the international business finds lower labour costs, it's going to be able to reduce costs. In addition, if the host country can give better tariffs and savings, the business could diversify its markets via a subsidiary branch. Having said that, the country should be able to grow its economy, develop human capital, enhance employment, and provide access to knowledge, technology, and skills. Hence, economists argue, that in many cases, FDI has led to efficiency by transmitting technology and knowledge towards the country. However, investors consider a numerous factors before making a decision to move in a country, but among the list of significant factors they give consideration to determinants of investment decisions are position on the map, exchange fluctuations, governmental security and governmental policies.

To examine the viability regarding the Gulf being a location for foreign direct investment, one must evaluate if the Arab gulf countries give you the . necessary and adequate conditions to encourage direct investments. One of the important variables is political stability. How do we evaluate a state or even a area's stability? Governmental security depends up to a large degree on the content of residents. People of GCC countries have a good amount of opportunities to aid them attain their dreams and convert them into realities, making a lot of them content and happy. Moreover, worldwide indicators of governmental stability unveil that there's been no major political unrest in the region, and the incident of such a eventuality is extremely not likely given the strong governmental will plus the prescience of the leadership in these counties specially in dealing with crises. Furthermore, high levels of corruption can be hugely detrimental to foreign investments as potential investors dread risks such as the obstructions of fund transfers and expropriations. However, when it comes to Gulf, political scientists in a study that compared 200 states categorised the gulf countries as being a low danger in both categories. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely attest that a few corruption indexes confirm that the region is improving year by year in reducing corruption.

The volatility regarding the currency prices is something investors simply take into account seriously due to the fact unpredictability of exchange price fluctuations may have an effect on the profitability. The currencies of gulf counties have all been pegged to the US currency since the mid 1990s and early 2000s, and investors such Farhad Azima in Ras Al Khaimah and Oussama el-Omari in Ras Al Khaimah would likely view the pegged exchange rate as an essential seduction for the inflow of FDI in to the region as investors don't need to worry about time and money spent handling the foreign exchange risk. Another important advantage that the gulf has is its geographical location, located at the crossroads of Europe, Asia, and Africa, the region functions as a gateway to the rapidly raising Middle East market.