Foreign Direct Investment – An Analytical Study of its Determinants in the Economic Environment of the GCC Countries

Prof. Majdi Shehab
Professor of Economy & Public Finance Kuwait International Law School


For the last two decades, the GCC has been striving to diversify its income resources and minimize its reliance on oil as the main incentive of economic development. GCC countries exerted exceptional efforts in developing their investment atmosphere, and creating better circumstances for the flux of foreign investments in the different economic sectors. Moreover, GCC countries took planned steps towards developing the policies and administrative and legal framework related to foreign investment.
In 2014, GCC countries attracted many foreign investments in the sectors of metal products, machinery, appliances, and chemical and petrochemical industries. In 2015, the ensuring index was adopted to measure the potential GCC countries have to attract investment.
GCC countries also recorded considerable performance in the natural and human resources index, logistic performance, communication and IT, and technological advancement factors. Moreover, the performance of the GCC countries was medium in institutional environment index, business performance, market volume, and the feasibility to enter the market. In addition, the performance of the GCC countries was less than medium in brokerage index, financing capacity, and bloc’s economy.

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