As countries around the world make an effort to attract international direct get more info investments, the Arab Gulf stands apart being a strong possible destination.

The volatility regarding the exchange rates is something investors simply take seriously due to the fact vagaries of exchange rate fluctuations might have a direct impact on the profitability. The currencies of gulf counties have all been fixed to the US dollar since 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 fixed exchange price as an crucial attraction for the inflow of FDI into the region as investors do not have to be worried about time and money spent manging the foreign exchange uncertainty. Another important advantage that the gulf has is its geographic position, located on the crossroads of Europe, Asia, and Africa, the region serves as a gateway to the rapidly growing Middle East market.

To examine the viability of the Gulf being a location for foreign direct investment, one must evaluate whether the Arab gulf countries give you the necessary and adequate conditions to promote direct investments. One of the important variables is political stability. How can we assess a country or even a region's stability? Governmental stability depends to a significant degree on the content of inhabitants. Citizens of GCC countries have actually lots of opportunities to aid them achieve their dreams and convert them into realities, making most of them satisfied and grateful. Moreover, international indicators of governmental stability show that there is no major governmental unrest in the area, and also the occurrence of such an eventuality is very unlikely given the strong governmental will and the farsightedness of the leadership in these counties specially in dealing with crises. Moreover, high levels of corruption could be extremely detrimental to international investments as investors dread hazards including the blockages of fund transfers and expropriations. But, in terms of Gulf, economists in a study that compared 200 states categorised the gulf countries as being a low hazard in both aspects. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor may likely attest that several corruption indexes concur that the Gulf countries is enhancing year by year in cutting down corruption.

Nations all over the world implement various schemes and enact legislations to attract international direct investments. Some countries like the GCC countries are increasingly embracing pliable legislation, while some have lower labour costs as their comparative advantage. The benefits of FDI are, of course, mutual, as if the multinational firm finds reduced labour costs, it will likely be able to minimise costs. In addition, if the host country can grant better tariffs and savings, the business could diversify its markets through a subsidiary branch. Having said that, the country should be able to grow its economy, develop human capital, enhance job opportunities, and provide usage of expertise, technology, and abilities. Thus, economists argue, that in many cases, FDI has resulted in effectiveness by transmitting technology and know-how towards the country. Nevertheless, investors think about a myriad of aspects before carefully deciding to invest in a country, but among the significant variables that they think about determinants of investment decisions are location, exchange fluctuations, governmental stability and governmental policies.