UAE/TURKISH BUSINESS RELATIONS
Posts 1-2 of 2
-
Dr. Nilgün Birgören Premium Member Group moderatorThe company name is only visible to registered members.GCC economy
Greater diversification of the economies, privatisation of industry and establishment of a monetary union are the essential factors in increasing foreign direct investment (FDI) in the Gulf Cooperation Council (GCC) countries, a leading economist said in Abu Dhabi on Tuesday.
Currently, the level of foreign investment in the GCC is unstable and mostly concentrated in the oil and gas sector, followed by the financial services and transportation sectors, said Dr Zayri Bel Kasem, head of economics at Wahran University in Algeria.
"The UAE and Saudi Arabia have currently made significant strides in diversifying their economies away from oil and gas, but even more is required to guarantee steady flows of FDI," Dr Bel Kasem said.
He was speaking on the sidelines of the 19th International Conference on Investment Rules and International Agreements, which saw academicians and government representatives from across the Middle East and North Africa (Mena) discuss ways to improve the investment climate in the region.
Among GCC nations, Saudi Arabia and the UAE attract the most FDI while Kuwait and Saudi Arabia have the greatest amount of outbound FDI.
The flow of foreign direct investment into the GCC however declined by $9.3 billion between 2008 and 2009, and has shown relative instability, Dr Bel Kasam said.
"While part of this fall in FDI was precipitated by the economic crisis, there is still need for improvements to be made in the investment climate. For instance, privatisation in the GCC has been limited and cautionary, especially because the majority of companies are family-owned or part of the oil and gas sector. This means that administrative procedures are slow, and bureaucracy often hinders industrial efficiency," he added.
The economist also added the establishment of a monetary union would contribute greatly to inbound FDI.
"The pegging of certain GCC currencies to the US dollar has been a roadblock to establishing a common GCC currency. However, if this could be overcome and the GCC currency were pegged to a basket of other currencies, the investment attractiveness of the GCC would improve significantly," Dr Bel Kasam said.
Dr Samah Al Agha, professor of law at the University of Damascus, said the possibility of business crime and lack of judicial independence were also stifling the flow of global FDI into the GCC economies.
"Certain arbitrations and disputes have dragged on in GCC courts due to judicial interference. Foreign investors watch such cases carefully and tend to shy away from investing in countries where dispute settlement takes time. So there is a need to increase judicial independence and efficiency," she said.
Source: GulfNews
- 27 Apr 2011, 7:17 pm
-
Dr. Nilgün Birgören Premium Member Group moderatorThe company name is only visible to registered members.
Re: GCC economy
The current political transformation in the Middle East and North Africa (Mena) has created a historic opportunity for economic and financial change guided by Sharia-compliant instruments, a leading economist said in the capital Monday.
The Islamic instruments should be invested towards the development of an entrepreneurial middle class so that long-term economic progress and job creation can be guaranteed, Dr Volker Nienhaus, economic adviser and former president of the University of Marburg, said at 19th International Conference on Investment Rules and their Impact on Economic Development.
The conference, which runs in the capital till tomorrow, yesterday saw government representatives, academicians and university students from across the Mena discuss the present global investment climate, the suitability of government rules and regulations for attracting foreign direct investment, and opportunities for economic growth.
Confidence
Shaikh Nahyan Bin Mubarak Al Nahyan, Minister of Higher Education and Scientific Research, who inaugurated the event, said the provision for an appropriate investment climate was a "fundamental requirement for instilling confidence in an economy and establishing it as a vital part of the global economy".
On the sidelines of the conference, Dr Nienhaus told Gulf News that the promotion of enterprise among the middle class was the key to ensuring regional stability.
"Middle-income entrepreneurs usually run family businesses which do not sell speculative shares on a stock exchange, and they are also less indebted. So if these entrepreneurs receive finance backed by real goods, as investments coming from Islamic instruments ideally should be, there is a real chance for long-term job creation. In addition, a middle class is integral to the creation of a sustainable knowledge economy," he explained.
Liquid capital
"In countries like Algeria and Morocco for instance, the colonialist system of capitalism still remains so that the elite are responsible for most of the enterprise and investment. In Egypt, private monopolies controlled by the wealthy replaced the public monopolies of yore. However, this elite segment is prone to shocks and volatility, which also hampers the job market greatly," Dr Nienhaus said.
A strong middle class that can provide a large proportion of the economy's total number of jobs, as is the case in the EU and the US, therefore protects against job market volatility and subsequent civil unrest.
"For Egypt to create an entrepreneurial middle class might take decades, and this is where countries like the UAE, which has an abundance of liquid capital, has an opportunity to both step in as well as benefit from the returns of the investment," he added.
He also advised the use of Sharia-compliant finance to develop Mena region economies.
http://gulfnews.com/business/investment/islamic-finance-can-...
- 27 Apr 2011, 7:23 pm
