Examining FDI sustainability in the Arabian Gulf these days

Examining FDI sustainability in the Arabian Gulf these days

Blog Article

The Middle East, specially the Arabian Gulf, has experienced a notable escalation in foreign direct investment. Find out about the risks that companies might encounter.

Working on adjusting to regional traditions is essential not enough for effective integration. Integration is a loosely defined concept involving a lot of things, such as appreciating local values, learning about decision-making styles beyond a restricted transactional business viewpoint, and looking at societal norms that influence business practices. In GCC countries, successful business affairs tend to be more than just transactional interactions. What affects employee motivation and job satisfaction vary greatly across countries. Hence, to genuinely integrate your business in the Middle East a few things are expected. Firstly, a business mindset change in risk management beyond monetary risk management tools, as professionals and lawyers such as for instance Salem Al Kait and Ammar Haykal in Ras Al Khaimah would likely recommend. Secondly, methods which can be efficiently implemented on the ground to convert the new approach into action.

Although political uncertainty seems to take over media coverage regarding the Middle East, in recent times, the region—and specially the Arabian Gulf—has seen a stable increase in international direct investment (FDI). The Middle East and Arab Gulf markets are becoming increasingly appealing for FDI. However, the prevailing research on how multinational corporations perceive area specific dangers is scarce and frequently does not have depth, a fact attorneys and danger specialists like Louise Flanagan in Ras Al Khaimah would likely be familiar with. Studies on risks related to FDI in the area tend to overstate and predominantly focus on governmental dangers, such as for example government uncertainty or policy modifications that could affect investments. But recent research has started to shed a light on a a vital yet often overlooked factor, particularly the consequences of social facets regarding the sustainability of foreign investments in the Arab Gulf. Indeed, a number of studies expose that numerous businesses and their management teams somewhat neglect the effect of cultural differences, mainly due to a lack of understanding of these cultural factors.

Recent scientific studies on dangers connected to international direct investments in the MENA region offer fresh insights, trying to bridge the research gap in empirical knowledge concerning the risk perceptions and administration methods of Western multinational corporations active extensively in the area. For instance, research project involving several major international companies within the GCC countries unveiled some interesting findings. It suggested that the risks connected with foreign investments are more complicated than simply political or exchange rate risks. Cultural risks are perceived as more crucial than governmental, monetary, or economic risks based on survey data . Additionally, the research found that while aspects of Arab culture strongly influence the business environment, many foreign businesses find it difficult to adjust to local customs and routines. This difficulty in adapting is really a danger dimension that will require further investigation and a change in how multinational corporations operate in the area.