THE GCC ECONOMIC OUTLOOK IN THE COMING 10 YEARS

The GCC economic outlook in the coming 10 years

The GCC economic outlook in the coming 10 years

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As countries around the globe strive to attract foreign direct investments, the Arab Gulf stands out as being a strong possible destination.

To look at the viability of the Persian Gulf as a destination for international direct investment, one must evaluate whether or not the Arab gulf countries provide the necessary and adequate conditions to encourage FDIs. Among the important criterion is governmental security. Just how do we assess a state or perhaps a area's security? Governmental security depends up read more to a large degree on the satisfaction of people. People of GCC countries have an abundance of opportunities to greatly help them achieve their dreams and convert them into realities, making a lot of them satisfied and grateful. Additionally, worldwide indicators of governmental stability unveil that there has been no major governmental unrest in the region, and the occurrence of such an eventuality is extremely unlikely given the strong political will plus the vision of the leadership in these counties specially in dealing with crises. Moreover, high levels of misconduct can be extremely detrimental to international investments as investors fear hazards for instance the blockages of fund transfers and expropriations. Nonetheless, in terms of Gulf, political scientists in a study that compared 200 counties classified the gulf countries as a low danger in both categories. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would probably attest that several corruption indexes concur that the Gulf countries is increasing year by year in eradicating corruption.

The volatility associated with the currency prices is something investors simply take into account seriously since the vagaries of currency exchange price changes could have a direct impact on their profitability. The currencies of gulf counties have all been fixed to the United States dollar 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 crucial seduction for the inflow of FDI in to the region as investors do not have to be concerned about time and money spent manging the foreign exchange instability. Another important benefit that the gulf has is its geographical position, situated at the crossroads of three continents, the region serves as a gateway to the quickly raising Middle East market.

Countries all over the world implement various schemes and enact legislations to attract international direct investments. Some countries such as the GCC countries are increasingly embracing pliable laws and regulations, while some have cheaper labour expenses as their comparative advantage. The advantages of FDI are, of course, shared, as if the international firm finds reduced labour expenses, it's going to be in a position to minimise costs. In addition, in the event that host state can give better tariffs and savings, business could diversify its markets by way of a subsidiary branch. On the other hand, the state should be able to develop its economy, cultivate human capital, enhance job opportunities, and provide access to knowledge, technology, and abilities. Thus, economists argue, that oftentimes, FDI has generated efficiency by transmitting technology and knowledge to the host country. Nevertheless, investors consider a many factors before carefully deciding to invest in a state, but among the list of significant factors which they consider determinants of investment decisions are position on the map, exchange volatility, governmental stability and government policies.

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