analysing GCC economic growth and foreign investments

analysing GCC economic growth and foreign investments

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Different countries throughout the world have implemented strategies and regulations designed to invite international direct investments.

Countries around the globe implement different schemes and enact legislations to attract international direct investments. Some countries like the GCC countries are increasingly implementing flexible regulations, while others have actually lower labour costs as their comparative advantage. The many benefits of FDI are, needless to say, shared, as if the multinational company discovers lower labour expenses, it is able to cut costs. In addition, in the event that host state can grant better tariffs and savings, the business enterprise could diversify its markets by way of a subsidiary branch. Having said that, the country will be able to grow its economy, develop human capital, enhance job opportunities, and provide access to expertise, technology, and skills. Thus, economists argue, that most of the time, FDI has resulted in efficiency by transferring technology and know-how to the host country. Nonetheless, investors consider a numerous factors before deciding to invest in new market, but among the list of significant factors they consider determinants of investment decisions are location, exchange fluctuations, governmental stability and government policies.

The volatility associated with the currency prices is one thing investors simply take seriously due to the fact unpredictability of currency exchange price fluctuations may have a visible impact on their profitability. The currencies of gulf counties have all been pegged to the United States currency from the mid 1990s and early 2000s, and investors such Farhad Azima in Ras Al Khaimah and here Oussama el-Omari in Ras Al Khaimah may likely view the pegged exchange rate being an important attraction for the inflow of FDI to the region as investors do not have to be worried about time and money spent handling the foreign currency risk. Another essential benefit that the gulf has is its geographic location, situated on the intersection of three continents, the region functions as a gateway towards the rapidly raising Middle East market.

To examine the viability of the Gulf as being a destination for foreign direct investment, one must evaluate whether or not the Arab gulf countries give you the necessary and adequate conditions to encourage direct investments. One of many important elements is governmental security. How can we evaluate a country or even a region's stability? Political stability depends up to a large degree on the satisfaction of residents. Citizens of GCC countries have a great amount of opportunities to simply help them attain their dreams and convert them into realities, which makes most of them content and grateful. Also, global indicators of political stability unveil that there has been no major governmental unrest in the area, as well as the incident of such an possibility is extremely not likely because of the strong governmental will as well as the prudence of the leadership in these counties particularly in dealing with crises. Moreover, high rates of misconduct could be extremely harmful to international investments as investors fear hazards including the obstructions of fund transfers and expropriations. But, when it comes to Gulf, economists in a study that compared 200 counties categorised the gulf countries being a low danger in both aspects. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor may likely testify that several corruption indexes confirm that the GCC countries is improving year by year in eliminating corruption.

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