foreign direct investment and Middle East economic outlook in the coming decade

foreign direct investment and Middle East economic outlook in the coming decade

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The GCC countries are actively developing policies to attract international investments.

The volatility of the exchange rates is one thing investors just take into account seriously because the vagaries of currency exchange rate fluctuations could have a visible impact on their profitability. The currencies of gulf counties have all been fixed to the United States 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 fixed exchange price being an important attraction for the inflow of FDI in to the region as investors don't need to be concerned about time and money spent handling the forex risk. Another crucial benefit that the gulf has is its geographic position, located at the crossroads of Europe, Asia, and Africa, the region serves as a gateway to the quickly raising Middle East market.

Countries around the globe implement different schemes and enact legislations to attract international direct investments. Some nations such as the GCC countries are increasingly adopting pliable regulations, while others have actually reduced labour expenses as their comparative advantage. The many benefits of FDI are, needless to say, shared, as if the multinational business discovers lower labour costs, it is able to reduce costs. In addition, in the event that host state can give better tariffs and savings, business could diversify its markets via a subsidiary branch. Having said that, the state should be able to grow its economy, develop human capital, enhance job opportunities, and offer access to expertise, technology, and abilities. Thus, economists argue, that oftentimes, FDI has resulted in efficiency by transferring technology and know-how towards the country. Nevertheless, investors consider a myriad of aspects before deciding to invest in a state, but among the significant factors they give consideration to determinants of investment decisions are geographic location, exchange volatility, political security and government policies.

To look at the suitableness regarding the Gulf as being a destination for international direct investment, one must assess whether or not the Arab gulf countries provide the necessary and adequate conditions to encourage direct investments. One of the important aspects is governmental stability. How do we evaluate a state or even a region's stability? Political stability will depend on to a large level on the satisfaction of people. People of GCC countries have actually a lot of opportunities to simply help them attain their dreams and convert them into realities, helping to make a lot of them content and grateful. Furthermore, worldwide indicators of governmental stability unveil that there has been no major governmental unrest in the region, plus the incident of such an eventuality is extremely not likely given the strong political will plus the vision of the leadership in these counties especially in dealing with political crises. Moreover, high rates of misconduct can be extremely detrimental to international investments as potential investors fear hazards including the blockages of fund transfers and expropriations. But, when it comes to Gulf, economists in a study that compared 200 counties deemed the gulf countries as a low risk in both aspects. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor may likely testify that a few corruption indexes confirm click here that the GCC countries is improving year by year in reducing corruption.

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