looking at GCC economic growth and FDI

Various countries throughout the world have actually implemented strategies and laws designed to invite international direct investments.

Countries around the world implement different schemes and enact legislations to attract international direct investments. Some nations for instance the GCC countries are increasingly embracing flexible regulations, while others have reduced labour costs as their comparative advantage. The many benefits of FDI are, of course, mutual, as if the multinational firm finds reduced labour expenses, it will be in a position to cut costs. In addition, in the event that host country can grant better tariffs and savings, the company could diversify its markets by way of a subsidiary. On the other hand, the state will be able to develop its economy, cultivate human capital, enhance job opportunities, and offer access to knowledge, technology, and abilities. Therefore, economists argue, that oftentimes, FDI has resulted in effectiveness by transferring technology and knowledge towards the host country. Nevertheless, investors look at a numerous aspects before carefully deciding to invest in a state, but one of the significant factors they think about determinants of investment decisions are position on the map, exchange fluctuations, governmental security and government policies.

To look at the suitableness of the Gulf being a destination for international direct investment, one must assess if the Arab gulf countries provide the necessary and sufficient conditions to promote FDIs. Among the important factors is political security. How can we evaluate a state or perhaps a region's stability? Political security will depend on to a large degree on the content of people. Citizens of GCC countries have lots of opportunities to help them attain their dreams and convert them into realities, which makes most of them content and grateful. Additionally, worldwide indicators of political stability reveal that there's been no major political unrest in the region, plus the incident of such an eventuality is highly not likely given the strong governmental will plus the prescience of the leadership in these counties specially in dealing with crises. Furthermore, high levels of corruption could be extremely harmful to international investments as potential investors dread hazards like the blockages of fund transfers and expropriations. Nevertheless, in terms of Gulf, experts in a study that website compared 200 counties classified the gulf countries as a low danger in both aspects. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that a few corruption indexes confirm that the region is increasing year by year in eradicating corruption.

The volatility regarding the exchange prices is something investors simply take seriously since the unpredictability of exchange price changes could have an impact on the profitability. The currencies of gulf counties have all been pegged to the US 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 would likely see the fixed exchange price as an crucial attraction for the inflow of FDI to the country as investors don't have to be concerned about time and money spent handling the forex risk. Another crucial advantage that the gulf has is its geographical location, located at the intersection of three continents, the region serves as a gateway to the quickly growing Middle East market.