Countries of the Arab Gulf benefit from the high incomes they get from the mining and the selling of natural oil and gas that the ground offers them. The high incomes, combined with their small population are the reasons that explain why the income per inhabitant is higher than that of the other states of the region. According to Bloomberg Agency, Gulf countries invested more than 150 billion dollars abroad in 2009. This investment was not limited to the Middle East area, yet Gulf investments represent a huge part of global investments in the wider region. Then in these conditions, can we consider Gulf investments as a significant driver of economic development in the wider region?
[...] Indeed, the main sectors that receive those investments do not directly benefit to local development. This is obvious for investments concerning luxury, tourism, or high standard real estate. This is also the case for the constructions of huge compounds and villas complexes, which purpose is not to develop the situation of local population, but only to benefit to a specific population: the rich class of local elites and the rich foreigners living in the country. This is of course also the case for hotels, spas and resorts, which renting prices are so expensive that even the local middle class could not spend a night there. [...]
[...] If their investment can benefit to the development of those areas, it's even better, but this is not their priority. This is also why countries of the GCC do not limit their investment to the wider region of the Middle East. They do not want to be dependent on only one region. To limit risky economic activities and investments, they prefer to diversify their partnerships, investing not only in the wider Middle East region, but also in other countries. This way, African countries might now become a new territory of investments for GCC states. [...]
[...] In this case, Gulf investment is clearly a significant driver of economic development in the wider region were the funds are invested. But this is not always the case. But before that, it is important to understand the increase of Gulf investment in the Middle East area. Gulf investments have thus increased, and should keep increasing. Indeed, investments of the GCC countries in the wider region closely depend on the increase of their financial reserves, due to oil benefits and surpluses. [...]
[...] Maghreb countries represent this way, a relatively stable and reliable economy to invest in by huge projects. Their advantages are many, and above all the geographic position, between the European and the African economic markets. But investments are also made easier by local governments' measures, which purpose is to encourage those Gulf funds to settle down in Maghreb countries. Indeed, and in the aim of countering the effects of the crisis, Maghreb governments want to diversify their foreign investments, so as to protect themselves from possible economic drifts. [...]
[...] Gulf investors should also invest in projects that would create local employment in a significant way, which is not the case most of the time. Investors thus prefer to employ workers from East Asia, whose salary is even lower than local workers. Moreover, even when it's not the case and when investors decide to find workers locally, the creation of employment is not that important. If the construction of the project might need hundreds of workers, the project itself, once realized, might only need twenty workers to keep functioning. [...]
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