Governments around the world are implementing different schemes and legislations to attract foreign direct investments.
To look at the suitability of the Arabian Gulf being a location for foreign direct investment, one must assess whether the Arab gulf countries provide the necessary and sufficient conditions to encourage FDIs. Among the important factors is political stability. Just how do we evaluate a state or even a area's security? Governmental security depends up to a large level on the satisfaction of residents. People of GCC countries have actually plenty of opportunities to simply help them attain their dreams and convert them into realities, helping to make a lot of them satisfied and grateful. Also, global indicators of governmental stability show that there is no major governmental unrest in the region, plus the occurrence of such an possibility is very unlikely provided the strong governmental determination and the prescience of the leadership in these counties especially in dealing with crises. Moreover, high rates of misconduct could be extremely harmful to foreign investments as investors dread hazards for instance the blockages of fund transfers and expropriations. Nevertheless, when it comes to Gulf, economists in a study that compared 200 counties categorised the gulf countries as a low risk in both categories. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that a few corruption indexes concur that the GCC countries is increasing year by year in eliminating corruption.
Nations around the globe implement different schemes and enact legislations to attract international direct investments. Some nations like the GCC countries are increasingly adopting flexible legislation, while some have lower labour expenses as their here comparative advantage. The advantages of FDI are, of course, shared, as if the international business finds reduced labour expenses, it will be able to cut costs. In addition, if the host state can give better tariffs and savings, the business enterprise could diversify its markets via a subsidiary branch. On the other hand, the state should be able to grow its economy, cultivate human capital, enhance employment, and provide access to knowledge, technology, and skills. Hence, economists argue, that most of the time, FDI has generated effectiveness by transmitting technology and knowledge towards the country. Nevertheless, investors think about a myriad of factors before making a decision to move in a country, but among the significant variables they consider determinants of investment decisions are geographic location, exchange fluctuations, political stability and governmental policies.
The volatility associated with the currency rates is something investors simply take seriously since the unpredictability of currency exchange price changes might have a direct impact on the profitability. The currencies of gulf counties have all been fixed to the United States 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 see the fixed exchange rate as an essential seduction for the inflow of FDI into the region as investors do not need to worry about time and money spent handling the foreign exchange instability. Another essential advantage that the gulf has is its geographic location, located on the crossroads of Europe, Asia, and Africa, the region functions as a gateway to the quickly growing Middle East market.