The GCC economic outlook in the coming 10 years

The GCC economic outlook in the coming 10 years

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As nations around the globe strive to attract international direct investments, the Arab Gulf stands out as being a strong potential destination.

The volatility associated with website the exchange prices is one thing investors just take into account seriously as the unpredictability of currency exchange rate fluctuations might have a direct effect on their profitability. The currencies of gulf counties have all been fixed 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 may likely view the fixed exchange rate being an essential attraction for the inflow of FDI into the region as investors don't need certainly to be worried about time and money spent manging the foreign exchange instability. Another essential benefit that the gulf has is its geographic position, located on the crossroads of three continents, the region functions as a gateway to the rapidly raising Middle East market.

To examine the suitability of the Gulf being a destination for international direct investment, one must evaluate whether or not the Arab gulf countries give you the necessary and sufficient conditions to encourage direct investments. One of the important aspects is political security. How do we evaluate a country or perhaps a region's stability? Governmental security depends to a large level on the satisfaction of residents. People of GCC countries have actually a lot of opportunities to greatly help them achieve their dreams and convert them into realities, making most of them content and grateful. Additionally, global indicators of governmental stability show that there is no major political unrest in the region, plus the occurrence of such an scenario is very unlikely given the strong political determination and also the vision of the leadership in these counties especially in dealing with crises. Moreover, high levels of corruption can be extremely detrimental to foreign investments as potential investors dread risks including the blockages of fund transfers and expropriations. Nonetheless, when it comes to Gulf, specialists in a study that compared 200 states categorised the gulf countries as a low risk in both categories. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that a few corruption indexes concur that the region is improving year by year in eliminating corruption.

Countries around the globe implement different schemes and enact legislations to attract international direct investments. Some countries like the GCC countries are increasingly implementing pliable laws, while some have actually reduced labour expenses as their comparative advantage. The benefits of FDI are, of course, mutual, as if the international firm finds reduced labour expenses, it'll be in a position to minimise costs. In addition, if the host state can give better tariffs and savings, the business could diversify its markets through a subsidiary branch. Having said that, the country will be able to develop its economy, develop human capital, enhance employment, and provide access to knowledge, technology, and abilities. Hence, economists argue, that in many cases, FDI has resulted in efficiency by transferring technology and knowledge to the country. However, investors look at a many factors before making a decision to invest in new market, but among the list of significant variables which they think about determinants of investment decisions are position on the map, exchange volatility, political stability and government policies.

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