The GCC economic outlook in the coming 10 years

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

Countries across the world implement various schemes and enact legislations to here attract foreign direct investments. Some countries like the GCC countries are progressively implementing flexible legislation, while some have cheaper labour costs as their comparative advantage. Some great benefits of FDI are, needless to say, mutual, as if the multinational company discovers reduced labour expenses, it'll be in a position to minimise costs. In addition, if the host country can give better tariffs and savings, the company could diversify its markets via a subsidiary. On the other hand, the state will be able to develop its economy, cultivate human capital, enhance job opportunities, and provide usage of knowledge, technology, and skills. Therefore, economists argue, that most of the time, FDI has generated effectiveness by transferring technology and know-how to the country. However, investors look at a myriad of factors before making a decision to move in a country, but among the significant factors that they consider determinants of investment decisions are location, exchange volatility, political stability and government policies.

To examine the suitability of the Gulf as being a destination for foreign direct investment, one must evaluate whether the Arab gulf countries give you the necessary and sufficient conditions to promote FDIs. One of the important aspects is governmental stability. How do we evaluate a country or even a region's security? Political security depends to a large extent on the satisfaction of citizens. 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. Also, worldwide indicators of governmental stability show that there is no major governmental unrest in in these countries, and the incident of such an possibility is extremely unlikely provided the strong political determination plus the prescience of the leadership in these counties especially in dealing with political crises. Moreover, high levels of corruption can be extremely detrimental to international investments as investors dread hazards like the obstructions of fund transfers and expropriations. Nonetheless, regarding Gulf, experts in a study that compared 200 states deemed the gulf countries being a low risk in both aspects. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that several corruption indexes confirm that the GCC countries is increasing year by year in eradicating corruption.

The volatility associated with the currency prices is something investors just take into account seriously due to the fact unpredictability of currency exchange rate changes might have an effect on the profitability. The currencies of gulf counties have all been pegged to the United States currency from the mid 1990s and early 2000s, and investors such Farhad Azima in Ras Al Khaimah and Oussama el-Omari in Ras Al Khaimah may likely view the fixed exchange price being an essential seduction for the inflow of FDI to the country as investors don't need to worry about time and money spent manging the forex risk. Another important advantage that the gulf has is its geographic position, situated on the crossroads of Europe, Asia, and Africa, the region functions as a gateway towards the rapidly growing Middle East market.