looking at GCC economic growth and FDI

As countries across the world strive to attract international direct investments, the Arab Gulf stands out as a strong potential destination.

The volatility of the currency prices is something investors simply take seriously due to the fact vagaries of currency exchange rate fluctuations could have an effect on their profitability. The currencies of gulf counties have all been pegged to the United States 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 see the pegged exchange rate being an important attraction for the inflow of FDI into the country as investors do not need certainly to worry about time and money spent handling the foreign currency uncertainty. Another essential benefit that the gulf has is its geographical position, situated on the crossroads of three continents, the region serves as a gateway towards the quickly raising Middle East market.

Countries all over the world implement various schemes and enact legislations to attract international direct investments. Some countries like the GCC countries are progressively adopting pliable regulations, while some have lower labour expenses as their comparative advantage. The many benefits of FDI are, needless to say, mutual, as if the multinational organization finds reduced labour costs, it will be in a position to minimise costs. In addition, in the event that host country can grant better tariffs and savings, the business enterprise could diversify its markets through a subsidiary. On the other hand, the country will be able to grow its economy, develop human capital, enhance job opportunities, and provide access to knowledge, technology, and skills. Thus, economists argue, that most of the time, FDI has resulted in effectiveness by transmitting technology and knowledge towards the country. Nonetheless, investors look at a numerous aspects before carefully deciding to move in a country, but among the significant variables which they think about determinants of investment decisions are position on the map, exchange fluctuations, political stability and governmental policies.

To examine the viability of the Arabian Gulf as a destination for foreign direct investment, one must evaluate whether or not the Arab gulf countries provide the necessary and sufficient conditions to promote FDIs. One of the important criterion is political stability. Just how do we assess a state or perhaps a area's security? Governmental stability depends up to a large degree on the content of people. Citizens of GCC countries have actually plenty of opportunities to greatly help them achieve their dreams and convert them into realities, helping to make many of them content and happy. Moreover, international indicators of governmental stability reveal that there has been no major governmental unrest in in these countries, plus the occurrence of such a scenario is extremely not likely given the strong political will plus the prescience of the leadership in these counties particularly in dealing with political crises. Furthermore, high levels of misconduct can be hugely harmful to foreign investments as investors fear hazards for instance the obstructions of fund transfers and expropriations. Nonetheless, in terms of Gulf, political scientists in a study that compared 200 states classified the gulf countries as being a low hazard in . both aspects. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that several corruption indexes confirm that the Gulf countries is enhancing year by year in eradicating corruption.