Examining GCC economic outlook in the coming decade

Examining GCC economic outlook in the coming decade

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The GCC countries are earnestly carrying out policies to invite foreign investments.

The volatility associated with currency prices is something investors simply take seriously due to the fact unpredictability of exchange price fluctuations might have a visible impact on their 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 would likely view the fixed exchange rate as an important seduction for the inflow of FDI in to the country as investors don't have to worry about time and money spent handling the foreign exchange uncertainty. Another important advantage that the gulf has is its geographical location, situated on the intersection of Europe, Asia, and Africa, the region serves as a gateway towards the rapidly raising Middle East market.

To examine the viability of the Gulf being a location for international direct investment, one must assess whether or not the Arab gulf countries provide the necessary and sufficient conditions to encourage direct investments. Among the consequential variables is political stability. How do we assess a country or even a area's security? Political stability will depend on up to a large level on the content of residents. Citizens of GCC countries have an abundance of opportunities to simply help them achieve their dreams and convert them into realities, which makes a lot of them satisfied and happy. Additionally, worldwide indicators of political stability unveil that there is no major political unrest in in these countries, plus the occurrence of such a possibility is highly not likely provided the strong governmental determination plus the vision of the leadership in these counties specially in dealing with political crises. Moreover, high rates of misconduct could be extremely harmful to international investments as investors dread risks for instance the blockages of fund transfers and expropriations. However, in terms of Gulf, experts in a study that compared 200 states deemed the gulf countries being a low hazard in both categories. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that several corruption indexes confirm that the GCC countries is enhancing year by year in cutting down corruption.

Countries around the world implement various schemes and enact legislations to attract foreign direct investments. Some countries like the GCC countries are increasingly implementing pliable laws and regulations, while others have actually lower labour costs as their comparative advantage. The benefits of FDI are, needless to say, mutual, as if the multinational organization finds lower labour costs, it's going to be able to cut costs. In addition, if the host country can grant better tariffs and savings, the business enterprise could diversify its markets by way of a subsidiary. Having said that, the country should be able to develop its economy, develop human capital, enhance employment, and offer access to expertise, technology, and skills. Hence, economists argue, that oftentimes, FDI has generated effectiveness by transmitting technology and know-how towards the country. However, investors look at a myriad of website factors before making a decision to invest in a country, but among the list of significant factors which they consider determinants of investment decisions are geographic location, exchange volatility, governmental stability and government policies.

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