Gcc economies


Challenges and Opportunities in GCC Economies. Accepted Attitude appear Adopted Investors

Trade affiliation and Bread-and-butter Aesthetics in GCC economies. Bread-and-butter Cachet of GCC economies. Bread-and-butter Stability. GCC’s Political Adherence . FDI in the GCC countries

The admeasurement of the Bazaar . Concrete Basement . Resource Endowment and Industrialization . Activity Force . GCC – India business accord . Challenges. Barter Protection and Competitiveness. Lack of about-face

The Changing Bread-and-butter Context of Gulf Politics. Recommendations and abstracts


Executive Summary

The Gulf Cooperation Council (GCC) is an adorable breadth for beforehand and a arresting customer bazaar for alien appurtenances and services, and admonition technology to one of the youngest citizenry that is advised to accept accomplished admiral of spending in the world.

The accepted bazaar of the six GCC economies are accessible to adopted basic beforehand and are always alive to admission civic analysis to all adopted beforehand firms and cantankerous country beforehand and casework trade. By 2010, GCCs inter-state barter is accepted to enhance by 25 percent, and all-embracing barter in this states is advancing to abound by multiples. Accustomed its barter history and cardinal location, the six GCC economies has had continued barter and adept relationships with Asia, Europe, and African states, suggesting that it stands to account in the abiding from the advancing beforehand of these countries.

The GCC economies accept upheld an accessible arrangement of trading, chargeless basic movement, convertibility of bill with anchored nominal rates, and ample activity inflows- both accomplished and unskilled. Additionally, the GCC’s avant-garde banking systems accept been an basic approach for advancing their barter affiliation into the all-around community.

Despite accepted all-around bread-and-butter crises, the GCC has remained a absolute aqueous expanse. The bread-and-butter beforehand in several key sectors is forecasted to be affective assiduously beyond the region. Any broker because venturing in the GCC should be centrally positioned to booty advantage of one of the world’s fastest-growing markets.

Given the GCCs’ allusive advantage in oil, gas, petrochemical products, and clandestine capital, and accustomed the India’s technology, know- how, business abilities and that can be marketed in a absolute abounding bazaar indeed. Back countries or trading ally specialize on the base of their allusive advantages, allotment are maximized. Therefore Indian firms invested heavily according to the action emphasizing their allusive advantages in oil and gas account sector, which presents a abounding ambit for Indian enterprises to undertake collective investments in these fields.


The Gulf Cooperation Council (GCC) consisting of states six Arab states (Saudi Arabia, Bahrain, Qatar, Oman Affiliated Arab Emirates, and the Kuwait) amid in Arabian Gulf. The GCC economies are one of the fastest-growing all-embracing markets and accept become added important to the abridgement of the accomplished world.

GCC attracts an ever-increasing cardinal of adopted investments and beyond absolute sectors. Its accelerated development and amplification has fabricated it an alive appellant for avant-garde abstruse capacities, basement development, and business services. Development and improvements accept been fabricated to body up a clandestine breadth that is beneath dependants on government or accustomed resources, appropriately authoritative the breadth an adorable destination for beforehand and aggressive bazaar for departer workers and beyond expansions (Al Bawaba, 2007).

The GCC countries beforehand altitude is accessory to adopted investment. GCC countries are continuously adopting behavior and demography measures to beforehand this altitude and demography into application changes in the all-embracing bread-and-butter ambit and factors. GCC economies admit the amount of alluring and advancement adopted beforehand and accept resulted to adopting measures aimed at alluring and auspicious adopted investment.

GCCs artlessness to adopted beforehand and basic has been motivated by an apprehension that adopted basic and beforehand will allure banking resources- arresting and invisible, as able-bodied as bringing in avant-garde technology (Al-Shamali & Denton, 2000). In addition, it may additionally accession business potentials of the bounded firms by accouterment admission to consign markets. Adopted basic and beforehand can additionally beforehand abilities and techniques of administration and set up state-of-the art accessories of training.

The action for auspicious advance mostly focuses on the institutional anatomy and on creating acknowledged and authoritative altitude adapted for accustomed out beforehand activities.

Despite accepted all-around bread-and-butter crises, the GCC has remained a absolute aqueous expanse. The bread-and-butter beforehand in several key sectors is forecasted to be affective assiduously beyond the region. Any broker because venturing in the GCC should be centrally positioned to booty advantage of one of the world’s fastest-growing markets.

However, investments and barter links amid the Arab countries leave abounding to be desired. Capital-rich countries do not feel safe advance in people-endowed or resource-rich countries. About this closing accumulation of Arab countriescan assure aliment safety, continued markets for industrializing GCC countries and beforehand opportunities (Al Bawaba, 2007). Political accident is generally cited as a deterrent, forth with bureaucracy. Best generally governments are abhorrent for abortion to devise a arrangement that motivates the accessible as able-bodied as the clandestine breadth to collective efforts.

This cardboard identifies beforehand anticipation and accommodate admonition on the challenges and opportunities for an Indian action intending to commence on an beforehand in oil and gas account breadth in the GCC region.

Challenges and Opportunities In GCC Economies

General Attitude appear Adopted Investors

Generally speaking, GCC Countries’ religion, amusing bolt and norms, and their bread-and-butter and political cultures do not accept in any way prejudices adjoin adopted investors (Al Bawaba, 2007 b). The actuality is that there is a history of abounding co-operation and able attitude of hospitality. The cardinal of adopted firms and departer workers in the arena acutely credible this attitude. Hostilities in whatsoever address of at any akin of acquaintance are absent.

Trade affiliation and Bread-and-butter Aesthetics in GCC economies

The GCC economies has had an credible amount of success in agreement of barter integration, basic mobility, activity creation, and in ambience approved standards in assorted adjustment areas. Some of the GCC associates accept continued affable privileges to adopted capitals and beforehand in areas such as share-market, investment, and government procurement.

The longstanding bread-and-butter aesthetics of the arena is acutely an accessible chargeless bazaar and apparent – aggressive (Al Bawaba, 2007). Clandestine acreage rights are able-bodied accustomed and honored. GCC countries, clashing abounding developing countries, accept never accomplished what could be alleged left-wing inclinations. Basic and appurtenances are accustomed to advisedly admission and leave GCC countries. Adopted barter ascendancy measures are non- exact and as appropriately abandonment of profits, remittances and assets face no restrictions.

GCC countries artlessness is additionally embodied in their aerial adopted barter artlessness arrangement which accomplished added than 70%. For allegory reasons, the aforementioned arrangement amounted to 16% in U.S.A. and 18% in Japan. This manifests the assurance and assimilation of GCC economies in the all-embracing bazaar (Al-Shamali & Denton, 2000).

Economic Cachet of GCC economies

The accumulated Gross Domestic Product (GDP) of the GCC economies is estimated to ability 1.15trillion dollars according to the Gulf Finance House (GFH) projections. The bump by the Saudi American Bank (Samba) and Al Ahli Bank estimates that by 2018, absolute beforehand in the GCC economies could ability up to 670 actor dollars.

The GCC’s apple abridgement allotment is estimated to enlarge hardly college than the anniversary boilerplate all-around beforehand with an accumulated of 4.5 percent, compared to globally anniversary boilerplate of 3.3 percent (Emerging Markets Monitor, 2008). Within 10 years, the GCC countries are accepted to be bartering about one-quarter of the apple with oil as able-bodied as added quantities of petrochemicals, plastics and metals.

Economic Stability

The six countries of the GCC acquire abounding accepted and rather appropriate characteristics. They all depend on oil and gas for government revenues and adopted barter earnings. These governments’ revenues and expenditures move the agent of the economy. The non-oil sector, while growing constantly, charcoal almost dependent.

Oil will abide the above antecedent of activity and the basic agent to development for years to appear (Al-Shamali & Denton, 2000). Its role in the all-embracing abridgement as an important cardinal article needs no accession here. Thus, GCC countries cachet as above producers and exporters will abide to enhance their bread-and-butter power. GCC assembly of this cardinal article accounts for added than 20% of apple production. Of the world’s accurate oil and accustomed gas reserves, GCC states authority 45% and 15% respectively, according to bourgeois estimates (Emerging Markets Monitor, 2008).

GCC states accept been recording absolute GDP beforehand ante alike at times of all-embracing recession. Their Consolidated GDP has surpassed the battleground of $ 550 Billion according to Apple Bank. Amount on basic accumulation (investment) totals added than 25% of GDP.

Another indicator of stability, inflation, has remained one digit, and beneath 5% in best contempo years in all GCC countries. Not alone that, but aggrandizement was recorded with a abrogating assurance in some years.

GCC states accept maintained their astute aisle of acumen amount and conservatively ciphering revenues. This year’s budgets which accept been based on accepted oil prices of $ 40 per barrel, at a time back bazaar indicators and oil experts’ expectations apprehend a amount abutting to $ 60 per barrel. In fact, this behavior has helped GCC countries to almanac ample surpluses in their absolute oil revenues during the aftermost few years, and appropriately assisted them in clearing centralized debt arrears, and replenishing their adopted barter reserves.

It is axiomatic that GCC countries accept started to acquire the fruits of the adventuresome measures – adopted for the aftermost few years – of acumen amount and all-embracing the abstraction of ability in the administration of both the clandestine and the accessible sectors. Added importantly, they accept succeeded in abbreviation people’s expectations apropos the role of t he government in accouterment subsidies, application opportunities…etc.

GCC countries accept enjoyed surpluses during the aftermost decade, sometimes substantial, in the accepted antithesis of payments (Al Bawaba, 2007). Aerial ante of savings, however, accept been incomparable by agnate centralized investments, the abeyant beforehand cartage for these economies. The exhaustibility of their assets implies the burning charge for abiding bread-and-butter and banking planning in these countries afore nonreversible trends booty base

Economic adherence and beforehand are additionally accumulated with accepted trends which – amid alternative after-effects – strengthen and enhance adopted investments. GCC governments are pursing behavior appear added bread-and-butter liberalization, privatization and giving a greater role to the clandestine sector. Moreover, consign – 0riented behavior are assertive and embodied in the conception of consign costs institutions and establishing specialized exporting units in ministries and accommodation of business and industry.

GCCs Political Stability

GCC countries are acclaimed for their abiding political and authoritative governance. Ability is calmly handed and administration change is beneath common as compared to best of the developed and developing countries. The adherence of the regimes in GCC countries is absolutely activated with the adherence of accepted strategies and behavior (Al-Shamali & Denton, 2000). The able angary and accepted abutment enjoyed by GCC regimes is rather attenuate in alternative developing countries and alike in some developed ones.

However, on the political and authoritative level, there are several axiological problems that accept remained unsolved. Some community abutment are yet to be absolutely implemented, while ambiguous mutual agreements amid alone GCC states and alternative barter ally attenuate the bendability of the alien assessment regime. The budgetary abutment of some GCC economies has been alleged into catechism and abnormally by latest advertisement by Oman to opt out and by the abhorrence of the governments to accede on adumbrative belief of convergence. Political tensions accept been created amid some adjoining GCC States, decidedly amid Saudi Arabia and Qatar, which could accomplish the political adherence akin of the GCC economies to wobble.

FDI in the GCC countries

Having accustomed the accent of alluring FDI, GCC economies accept adopted new measures aimed at alluring adopted basic and investment. These new measures and development priorities accommodate acumen abiding bread-and-butter beforehand by adopting beforehand ante of clandestine sector; acceptable abstruse abilities and bounded capacities; convalescent the exports into the apple markets, creating added aggressive application opportunities. Artlessness to adopted basic and beforehand has been angry by an apprehension that this artlessness will accompany in banking resources, while alluring avant-garde technology. In addition, adopted basic and beforehand provides raises business capabilities of bounded firms and admission to consign markets. It additionally facilitates advance of the administration techniques and skills.

In the GCC economies, the FDI breeze accounts for added than the world’s boilerplate in two of the GCC states (Bahrain and Qatar). Conversely, except for the UAE, FDI banal has accounted for a key allotment advised adjoin to the amount of Gross Domestic Product in these GCC economies, as was apparent in the case of Bahrain, in which the banal accomplished added than 74 percent and 70 percent of the akin of GDP in 2000 and 2004 respectively.

The GCC Account breadth Market

The admeasurement of the bazaar is advised one of the basic factors in free inflows of adopted investments. The beyond the admeasurement of the bazaar and the greater its beforehand rates, the beyond are volumes of adopted investments. Unfortunately, a accepted perception, based on the citizenry estimates only, sees GCC states’ markets as small. This acumen fails to acknowledge a cardinal of facts:

First, GCC states aggregate an economically affiliated affiliation which entails – amid alternative things – a bazaar admeasurement of a citizenry abutting 38.7 actor inhabitants. Second, the per capita assets for GCC states is added that $ 14,317. In alternative words the populations of the GCC countries adore aerial levels of income, alike by avant-garde industrialize countries standards. Third, the aerial incomes enjoyed by GCC countries are reflected in aerial purchasing ability and able demand.

GCC states are additionally strategically situated, by adjoining the African and European continents and actuality the access aboideau to Asia. It should be mentioned that GCC imports from the blow of the apple totaled about $ 119,524.35 actor in 2004.

Physical Infrastructure

Whenever adopted beforehand in developing countries is discussed, bare concrete basement is cited as a above black factor. On the contrary, GCC states accept succeeded in utilizing their abounding assets in creating a absolute able-bodied developed – by any standards – concrete infrastructure. Above automated and citizenry centers are affiliated to anniversary alternative and to the ports with all-embracing – accepted alley network. Recently installed telecommunication systems are in some means alike bigger than some automated countries. New ability and baptize accommodation is actuality installed, and the burning is actuality rationalized through allusive tariffs (Diekmeyer, 2009).

Most ample burghal centers in the arena accept been provided with automated parks, complete with all-important utilities and alternative amenities bare by accomplishment operations (Diekmeyer, 2009).

Resource Endowment and Industrialization

As petroleum and accustomed gas anatomy the greatest aggregate of GCC resources, their automated development has been directed mainly appear oil and gas based industries such as petroleum refining, actinic fertilizers and petrochemical industries and/or to activity accelerated industries such as aluminum and animate (Al-Shamali & Denton, 2000). This goes in band with the abstraction of atone of allusive advantage i.e. if countries specialize in bearing bolt on the base of their allusive advantage, allotment from assembly and barter will be maximized.

The availability of bargain activity assets is a absolution for GCC industrialization. For example, the gas acclimated as a augment banal to the petrochemical industry is associated gas and best of it is a by-product of awkward oil production. The amount of bearing this gas is absolute low and if it is not acclimated it would accept to be flared (Al-Shamali & Denton, 2000).

Developments in the akin and ability of the automated capabilities of the GCC arena added the availability of a cardinal of adopted beforehand alluring factors such as the abilities accessible to -to-be investors, ability of bounded suppliers and account firms, and a net-work of acknowledging institutions, both clandestine and public.

Labor Force

The abounding developments which took abode in all bread-and-butter sectors accept afflicted GCC activity force in two above ways. First, it appropriate and induced ample influxes of adopted professional, accomplished and unskilled labor. On the absolute side, this has helped in bridging the curtailment in bounded labor, expediting the development process, and apparent the bounded activity force to a array of affluent adventures and aerial levels of abstract and applied training in all fields and aspects of life. That is absolutely a additional and an auspicious agency for any approaching investments, both bounded and foreign. Second, the attitude and acquaintance in bringing and ambidextrous with acquiescent adopted activity reduces the achievability of manpower bottlenecks. That is to say activity as a agency of assembly is no botheration for whoever is absorbed in establishing assembly or casework units.

Expatriate labors as able-bodied as nationals do not pay assets taxes. Another important agency – for adopted and bounded investors – is that in the GCC arena there is no almanac of business disruption because of activity disputes.

Gcc – India Business Relationship:

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