reviewing GCC economic growth and foreign investments

Governments all over the world are implementing various schemes and legislations to attract international direct investments.

Nations across the world implement various schemes and enact legislations to attract foreign direct investments. Some nations like the GCC countries are increasingly implementing flexible laws and regulations, while others have actually cheaper labour expenses as their comparative advantage. The advantages of FDI are, of course, mutual, as if the multinational firm discovers lower labour expenses, it's going to be able to cut costs. In addition, in the event that host country can give better tariffs and savings, the company could diversify its markets by way of a subsidiary. On the other hand, the country will be able to grow its economy, cultivate human capital, enhance employment, and offer access to knowledge, technology, and abilities. Thus, economists argue, that most of the time, FDI has resulted in effectiveness by transferring technology and know-how to the host country. However, investors think about a many aspects before deciding to move in a state, but among the significant factors which they give consideration to determinants of investment decisions are position on the map, exchange volatility, political stability and government policies.

The volatility regarding the exchange prices is something investors just take into account seriously as the unpredictability of currency exchange rate fluctuations might have an effect on the profitability. The currencies of gulf counties have all been fixed 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 website rate being an essential seduction for the inflow of FDI in to the country as investors do not need to be worried about time and money spent handling the foreign exchange uncertainty. Another essential benefit that the gulf has is its geographic position, located at the intersection of three continents, the region serves as a gateway towards the quickly growing Middle East market.

To look at the suitability of the Persian Gulf being a location for foreign direct investment, one must evaluate whether or not the Arab gulf countries provide the necessary and sufficient conditions to encourage FDIs. One of the important variables is political stability. How can we assess a country or even a area's stability? Political security will depend on up to a large degree on the satisfaction of inhabitants. People of GCC countries have actually a lot of opportunities to greatly help them achieve their dreams and convert them into realities, helping to make many of them content and grateful. Also, international indicators of governmental stability reveal that there's been no major governmental unrest in the area, and also the occurrence of such an possibility is highly not likely provided the strong governmental determination and the vision of the leadership in these counties specially in dealing with crises. Moreover, high rates of misconduct can be extremely harmful to international investments as investors dread hazards like the obstructions of fund transfers and expropriations. But, in terms of Gulf, political scientists in a study that compared 200 counties categorised the gulf countries being a low risk in both categories. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would probably attest that a few corruption indexes confirm that the region is improving year by year in cutting down corruption.