Liberalization pays dividends in GCC foreign investment
(MEBG) – Incentives by GCC states to increase the rate of foreign investment in the region appear to be paying off. A study published in the July issue of the The Journal of the Emirates Industrial Bank, relating to foreign investments in the GCC states, compared to private sector investments abroad, expatriates' employees remittances abroad, showed that by the end of last year $15 billion of total foreign investments in non-oil projects had been registered in Gulf region.
Liberalization has been a key element in attracting foreign capital. Among the GCC states, Saudi Arabia and Bahrain allow foreigners up to 100 percent ownership in local companies. Kuwait has liberalized in policy regarding indirect investments, such as the purchasing of shares and establishing of companies, with the exception of banks).
The journal neither specified the geographic distribution of these investments, nor indicated whether they were direct or indirect, and in what sectors they were made
Obviously, when the oil sector is included in the equation, investment figures rise considerably. According to Merrill Lynch, private sector's investments are estimated to be worth approximately $800 billion as of year-end 1999, only 11.4 percent higher than the figure reported at the end of 1995. Foreign investments in the Gulf account for merely 2 percent of the Gulf's private sector investments
Expatriate-employee remittances from the Gulf countries amounted to an approximate $18 billion in 1999. Foreign employee remittances are directly related to the ratio of foreign manpower to the total local workforce. It is believed that the highest remittance rate as defined above is found in the UAE, followed by Qatar, Kuwait, Saudi Arabia, and Oman.
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