looking at GCC economic growth and foreign investments

The GCC countries are actively adopting policies to attract foreign investments.

Countries around the globe implement different schemes and enact legislations to attract international direct investments. Some nations for instance the GCC countries are increasingly adopting pliable laws, while some have actually cheaper labour costs as their comparative advantage. The benefits of FDI are, of course, shared, as if the international firm finds lower labour expenses, it is in a position to reduce costs. In addition, in the event that host country can give better tariffs and savings, business could diversify its markets through a subsidiary branch. On the other hand, the country should be able to grow its economy, develop human capital, increase job opportunities, and offer usage of expertise, technology, and skills. Hence, economists argue, that oftentimes, FDI has resulted in effectiveness by transmitting technology and know-how to the host country. Nonetheless, investors think about a numerous aspects before carefully deciding to move in new market, but among the significant factors they give consideration to determinants of investment decisions are location, exchange volatility, governmental security and governmental policies.

The volatility of the exchange rates is one thing investors simply take into account seriously as the vagaries of exchange rate fluctuations may have a visible impact on their profitability. The currencies of gulf counties have all been fixed to the US dollar 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 see the fixed exchange price as an essential attraction for the inflow of FDI to the region as investors don't have to be worried about time and money spent handling the foreign currency instability. Another important advantage that the gulf has is its geographical position, situated on the crossroads of three continents, the region serves as a gateway to the quickly growing Middle East market.

To look at the viability regarding the Persian Gulf as being a destination for international direct investment, one must assess whether or not the Arab gulf countries provide the necessary and adequate conditions to promote FDIs. One of many consequential aspects is governmental security. Just how do we assess a state or perhaps a area's stability? Governmental stability depends to a large extent on the content of residents. Citizens of GCC countries have a good amount of opportunities to greatly help them achieve their dreams and convert them into realities, making most of them satisfied and happy. Moreover, international indicators of political stability show that there has been no major governmental unrest in the region, plus the occurrence of such an eventuality is extremely unlikely given the strong political determination and also the prescience of the leadership in these counties specially in dealing with political crises. Moreover, high levels of misconduct can be extremely detrimental to international investments as investors fear risks including the blockages of fund transfers and expropriations. Nevertheless, when it comes to Gulf, political scientists in a study that compared 200 states deemed the gulf countries as being a low hazard in both categories. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely attest that several corruption indexes make sure the GCC countries is enhancing year by year website in eliminating corruption.