studying GCC economic growth and FDI

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Different countries around the world have actually implemented schemes and laws intended to entice international direct investments.

The volatility associated with the currency rates is something investors simply take into account seriously since the vagaries of exchange rate changes could have an effect on the profitability. The currencies of gulf counties have all been fixed to the US currency 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 view the fixed exchange rate as an important 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 uncertainty. Another important benefit that the gulf has is its geographical location, situated at the crossroads of three continents, the region serves as a gateway towards the rapidly raising Middle East market.

Nations all over the world implement different schemes and enact legislations to attract foreign direct investments. Some nations for instance the GCC countries are progressively adopting pliable legislation, while some have cheaper labour expenses as their comparative advantage. The benefits of FDI are, of course, shared, as if the international firm finds reduced labour costs, it will be in a position to cut costs. In addition, in the event that host state can give better tariffs and savings, the business enterprise could diversify its markets through a subsidiary branch. On the other hand, the country should be able to grow its economy, cultivate human capital, increase job opportunities, and provide access to expertise, technology, and skills. Thus, economists argue, that in many cases, FDI has resulted in effectiveness by transmitting technology and know-how to the host country. Nonetheless, investors look at a myriad of factors before making a decision to invest in a state, but one of the significant factors which they give consideration to determinants of investment decisions are position on the map, exchange volatility, political security and government policies.

To look at the viability of the Arabian Gulf as being a destination for international direct investment, one must assess whether the Arab gulf countries give you the necessary and sufficient conditions to encourage direct investments. One of the important variables is political security. How do we assess a state or perhaps a area's stability? Political security depends to a large extent on the satisfaction of inhabitants. Citizens of GCC countries have actually a good amount of opportunities to aid them attain their dreams and convert them into realities, helping to make a lot of them satisfied and grateful. Moreover, global indicators of governmental stability unveil that there's been no major political unrest in the region, plus the incident of such a possibility is very not likely because of the strong political will plus the farsightedness of the leadership in these counties specially in dealing with crises. Moreover, high more info levels of misconduct can be extremely harmful to foreign investments as potential investors dread risks for instance the blockages of fund transfers and expropriations. However, when it comes to Gulf, experts in a study that compared 200 states deemed the gulf countries as a low danger in both categories. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor may likely testify that several corruption indexes make sure the Gulf countries is increasing year by year in eliminating corruption.

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