The GCC countries are earnestly adopting policies to attract foreign investments.
To look at the viability regarding the Gulf being a destination for foreign direct investment, one must evaluate whether the Arab gulf countries provide the necessary and adequate conditions to promote FDIs. One of many consequential criterion is governmental security. How do we assess a state or perhaps a region's stability? Political stability depends up to a large level on the content of people. People of GCC countries have actually plenty of opportunities to greatly help them attain their dreams and convert them into realities, making a lot of them content and happy. Furthermore, global indicators of governmental stability unveil that there's been no major governmental unrest in in these countries, and also the occurrence of such a eventuality is highly not likely because of the strong political will plus the farsightedness of the leadership in these . counties particularly in dealing with political crises. Furthermore, high rates of misconduct can be hugely detrimental to foreign investments as investors fear hazards such as the obstructions of fund transfers and expropriations. But, in terms of Gulf, economists in a study that compared 200 states deemed the gulf countries as being a low risk in both categories. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would probably testify that several corruption indexes concur that the GCC countries is increasing year by year in cutting down corruption.
The volatility associated with exchange rates is something investors simply take seriously since the unpredictability of exchange price fluctuations might have a direct effect on their profitability. The currencies of gulf counties have all been fixed to the US currency since 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 view the fixed exchange rate being an essential attraction for the inflow of FDI into the country as investors don't need certainly to be concerned about time and money spent manging the currency exchange uncertainty. Another essential benefit that the gulf has is its geographical position, situated at the crossroads of three continents, the region functions as a gateway towards the quickly raising Middle East market.
Countries around the globe implement various schemes and enact legislations to attract international direct investments. Some nations like the GCC countries are increasingly embracing pliable legislation, while others have lower labour costs as their comparative advantage. Some great benefits of FDI are, of course, shared, as if the international firm finds reduced labour costs, it is in a position to cut costs. In addition, if the host country can grant better tariffs and savings, the business enterprise could diversify its markets through a subsidiary. Having said that, the country should be able to develop its economy, cultivate human capital, increase job opportunities, and provide usage of expertise, technology, and skills. Hence, economists argue, that in many cases, FDI has led to effectiveness by transferring technology and know-how to the country. Nonetheless, investors look at a myriad of aspects before making a decision to move in a state, but among the list of significant variables that they give consideration to determinants of investment decisions are position on the map, exchange fluctuations, political stability and governmental policies.