Examining GCC economic outlook in the coming 10 years

Governments internationally are implementing various schemes and legislations to attract international direct investments.

Nations around the world implement different schemes and enact legislations to attract foreign direct investments. Some nations such as the GCC countries are increasingly adopting flexible legislation, while others have actually cheaper labour expenses as their comparative advantage. Some great benefits of FDI are, needless to say, shared, as if the multinational company finds lower labour expenses, it will likely be able to reduce costs. In addition, in the event that host state can give better tariffs and savings, the business enterprise could diversify its markets via a subsidiary branch. On the other hand, the country will be able to grow its economy, cultivate human capital, enhance job opportunities, and offer usage of knowledge, technology, and abilities. Therefore, economists argue, that in many cases, FDI has led to effectiveness by transmitting technology and knowledge to the host country. Nevertheless, investors look at a many aspects before carefully deciding to invest in a country, but one of the significant variables which they think about determinants of investment decisions are position on the map, exchange fluctuations, governmental stability and governmental policies.

To look at the suitableness of the Gulf as a location for foreign direct investment, one must evaluate whether the Arab gulf countries give you the necessary and adequate conditions to encourage FDIs. Among the important aspects is political security. How do we assess a country or even a area's security? Governmental stability will depend on to a large level on the satisfaction of individuals. People of GCC countries have plenty of opportunities to simply help them achieve their dreams and convert them into realities, making a lot of them content and happy. Additionally, international indicators of political stability unveil that there has been no major governmental unrest in the region, and the incident of such an scenario is extremely unlikely given the strong political will plus the farsightedness of the leadership in these counties specially in dealing with political crises. Furthermore, high levels of misconduct can be extremely detrimental to foreign investments as potential investors dread hazards such as the obstructions of fund transfers and expropriations. But, when it comes to Gulf, experts in a study that compared 200 counties classified the gulf countries as a low risk in both aspects. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that a few corruption indexes make sure the GCC countries is improving year by year . in eradicating corruption.

The volatility of the exchange prices is one thing investors simply take into account seriously as the unpredictability of exchange rate fluctuations might have a direct impact on the profitability. The currencies of gulf counties have all been fixed to the US currency from the late 1990s and early 2000s, and investors such Farhad Azima in Ras Al Khaimah and Oussama el-Omari in Ras Al Khaimah may likely see the fixed exchange rate as an crucial seduction for the inflow of FDI to the region as investors do not need to be concerned about time and money spent manging the forex instability. Another important advantage that the gulf has is its geographic location, located at the crossroads of three continents, the region functions as a gateway to the quickly raising Middle East market.