The GCC countries are actively implementing policies to bring in foreign investments.
To examine the suitableness of the Gulf being a location for foreign direct investment, one must assess whether or not the Arab gulf countries give you the necessary and adequate conditions to encourage FDIs. One of many consequential criterion is political stability. How can we assess a country or even a region's stability? Political here stability depends up to a significant level on the satisfaction of residents. Citizens of GCC countries have a good amount of opportunities to aid them attain their dreams and convert them into realities, making many of them satisfied and grateful. Moreover, global indicators of governmental stability unveil that there's been no major political unrest in the area, and the occurrence of such a scenario is very unlikely provided the strong governmental will and the farsightedness of the leadership in these counties specially in dealing with political crises. Moreover, high rates of misconduct could be extremely harmful to international investments as potential investors fear hazards including the blockages of fund transfers and expropriations. However, regarding Gulf, economists in a study that compared 200 states classified the gulf countries as a low hazard in both aspects. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor may likely attest that a few corruption indexes make sure the region is improving year by year in reducing corruption.
Countries around the globe implement various schemes and enact legislations to attract international direct investments. Some nations like the GCC countries are progressively embracing pliable legislation, while some have reduced labour expenses as their comparative advantage. The benefits of FDI are, of course, shared, as if the multinational corporation finds reduced labour costs, it will likely be in a position to reduce costs. In addition, if the host state can give better tariffs and savings, the business could diversify its markets via a subsidiary. On the other hand, the state will be able to develop its economy, cultivate human capital, increase job opportunities, and offer usage of knowledge, technology, and abilities. Hence, economists argue, that most of the time, FDI has generated effectiveness by transmitting technology and knowledge towards the host country. However, investors look at a numerous factors before carefully deciding to invest in a state, but among the list of significant factors they consider determinants of investment decisions are position on the map, exchange fluctuations, political security and government policies.
The volatility regarding the exchange prices is something investors simply take seriously due to the fact unpredictability of currency exchange rate changes may have a direct impact on the profitability. The currencies of gulf counties have all been fixed to the United States dollar 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 pegged exchange price as an essential seduction for the inflow of FDI into the country as investors don't have to be worried about time and money spent manging the currency exchange risk. Another crucial benefit that the gulf has is its geographic position, situated on the crossroads of Europe, Asia, and Africa, the region serves as a gateway towards the quickly raising Middle East market.