StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

The Effects of the 2008 Financial Crisis on the Investment in the Gulf Area - Essay Example

Cite this document
Summary
The paper attempts to explore how the gulf region, with a special emphasis on Qatar has been impacted in their investment programs due to ongoing financial crisis that began in 2008. This amply proves that investment in the aftermath of 2008 financial crisis is shaken but not shelved…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER93.5% of users find it useful
The Effects of the 2008 Financial Crisis on the Investment in the Gulf Area
Read Text Preview

Extract of sample "The Effects of the 2008 Financial Crisis on the Investment in the Gulf Area"

Download file to see previous pages

The 2008 financial crisis brought in its wake the reduced inflow of foreign direct investment (FDI) with a measure reduction observed in 2009. As per the Kuwait newspaper, Al-Qabas, as many as 675 real estate projects were cancelled in Gulf countries with almost 75 percent of them belonged to UAE – a large portion being in Dubai. Dubai's real estate market has been highly buoyant since last couple of years and almost 25 percent of its GDP comes through its real estate industry. It is imperative that property market in Dubai has seen its worst fall during the crisis period.

In the aftermath of 2008 financial crisis, Oil prices plummeted significantly to reach $40 per barrel by December 2008. The countries under discussion heavily depend upon the income from exports of crude oil and their 50% of GDP, baring UAE, is generated from the oil economy. It is not surprising that fall in oil prices affected significantly the business of oil exporting countries such as Kuwait, Qatar, Oman, Bahrain, UAE causing impact on investment scenarios in these countries. Impact of 2008 Financial Crisis on Investments in Qatar It is pertinent to note that the impact of financial crisis on Qatar has not been substantial.

During the 2008 financial crisis, the establishment continued to protect the local banking sector through direct investments in them. Ongoing financial Crisis did affect the GDP and investments in 2009 but it made a smart recovery in 2010 due to upward movement in oil prices. Qatar made substantial investments in its gas sector in 2011. The policy makers focused on country's non-associated natural gas reserves and began developing them that provided huge boost to foreign investment in non-energy sectors too.

Oil and gas still accounts for over 50% of the nation’s GDP generating 85% of export earnings. It will be most appropriate to note that Qatar's per capita income is highest in the world and the country boasts of one of the lowest unemployment rate. GDP real growth rates in Qatar have been 16.7%, 13% and 6.6% during the years 2010, 2011 and 2012 respectively that amply proves that the impact of 2008 financial crisis on Qatar has not been significant. As per the 2012 estimate, the gross fixed investment in the Qatar economy has been to the tune of 30.

6% of GDP that is certainly laudable in the ongoing financial crisis. Direct foreign investment in Qatar has been registered at $31.84 billion and $32.17 billion during the years 2011 and 2012 respectively and Qatari Rials (QAR) exchange at a fairly constant rate of 3.64 per US dollar all from 2008 through 2012 (Qatar Economy Profile, 2013). Doha Subsea Tunnel with an investment outlay of US $1 billion, Doha Metro with total investment of US $2 billion, and New Doha Port with the projected investment outlay of USD 6.

84 billion are some of the projects conceptualized after 2008 financial crisis are in the fast mode of implementation and likely to be completed in the next 2-3 years. The impact of 2008 financial crisis is nonexistent in Qatar and that can also be gauged from the fact that the foreign direct investment (FDI) in Qatar in 2009 was USD 8.7 billion; it was higher by USD 2 billion when compared with the investment figure of 2008. It is important to note that between 1990 and 2000, the average FDI investment in Qatar has been only USD 169 million (Rise with Qatar, 2012).

Impact of 2008 Financial Crisis in Investments in Kuwait Kuwait is also an oil economy and petroleum products contribute almost half of its GDP and earn almost 95% of its export revenues.

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The Effects of the 2008 Financial Crisis on the Investment in the Gulf Essay”, n.d.)
The Effects of the 2008 Financial Crisis on the Investment in the Gulf Essay. Retrieved from https://studentshare.org/finance-accounting/1499030-the-effects-of-the-2008-financial-crisis-on-the-investment-in-the-gulf-area
(The Effects of the 2008 Financial Crisis on the Investment in the Gulf Essay)
The Effects of the 2008 Financial Crisis on the Investment in the Gulf Essay. https://studentshare.org/finance-accounting/1499030-the-effects-of-the-2008-financial-crisis-on-the-investment-in-the-gulf-area.
“The Effects of the 2008 Financial Crisis on the Investment in the Gulf Essay”, n.d. https://studentshare.org/finance-accounting/1499030-the-effects-of-the-2008-financial-crisis-on-the-investment-in-the-gulf-area.
  • Cited: 0 times

CHECK THESE SAMPLES OF The Effects of the 2008 Financial Crisis on the Investment in the Gulf Area

Changes in Gulf banking industry after global financial crisis

Conclusion the effects of the financial crisis have to be considered by the policy makers while making plans for the future and improving the management systems internal to the organizations.... The third segment of countries in the gulf region consists of the countries that have high demographic pressure, low functioning social safety nets and low levels of economic growth (Sharif, 2006).... Islamic banking in the contemporary finance world The banking industry in the gulf region has passed through a period of major improvements over the period of last five years....
4 Pages (1000 words) Research Paper

The effects of the 2008 financial crisis on the investment in the Gulf area specially on Qatar

The Effects of the 2008 Financial Crisis on the Investment in the Gulf Area especially Qatar Name: University: The Effects of the 2008 Financial Crisis on the Investment in the Gulf Area-Qatar Introduction The 2008 financial crisis negatively affected investments in the Gulf area and especially Qatar.... Credit crunch Despite the high liquidity level of the main financial institutions in Qatar and decline in interest rates before the onset of the 2008 financial crisis, the availability of credit for investment purposes declined during the financial crisis due to high-risk aversion by the banks (Casa, 2009)....
4 Pages (1000 words) Research Paper

The effects of the 2008 financial crisis on the investment in the Gulf area and Qatar

The Impacts of 2008 financial crisis on investment sector in the Gulf region Introduction The global financial crisis began to show its influx in the middle of 2007, and later spread into the whole 2008.... Post-Recession Scenario One of the post-recession trends in the gulf investment sector is the boom of real estate market.... While closely evaluating the investment activities of Gulf countries including Qatar during 2008 financial crisis and post-recession period, it seems that the global financial crisis did not affect the Gulf region's investment sector much when compared to other regions....
4 Pages (1000 words) Research Paper

Effects of the 2008 Financial Crisis on the Investment in the Gulf Area

Name: Instructor: Course: Date: effects of the 2008 financial crisis on the investment in the gulf area especially in Qatar The global financial crisis affected the whole world though the impact has been severe in the Arab Countries.... With the exception of Qatar and Yemen, most states in the gulf area have projected lower GDP growth rates.... The financial crisis led to a decline in job opportunities in the gulf area.... Research shows that the percentage of women seeking employment also increased in the region due to the effects of the financial crisis that caused slow economic growth, inflation, and economic meltdown....
4 Pages (1000 words) Research Paper

The Effect of the Financial Crisis and Implications for Dubai

In the case of the recent financial the structure and the principles of the financial markets have been proved to have a critical role in the increase of the pressure against the economies internationally; however, there are countries, like Dubai, which managed to keep their economy strong; the effects of financial crisis can be divided into two different categories: a) the effects referring to the national economy and b) the effects related to the firms and individuals that have interests on specific investments....
19 Pages (4750 words) Essay

The effects of the 2008 financial crisis on the investment in the Gulf area especially on Qatar

in the gulf area, most countries that highly dependent on the oil industry faced a period of reduced investment.... Although there has been deep coverage of the impacts of global recession on the other parts of the worlds, the gulf area has been isolated from… The global financial crisis marked a period of failure of many financial institutions, increase in unemployment and reduction of the capacity to invest.... the gulf area experienced a period of oil-boom during the period between 2003 and 2008, a time when the economy grew by double figures....
4 Pages (1000 words) Essay

Effects of 2008 Global Crisis on Gulf Region

This paper “Effects of 2008 Global Crisis on Gulf Region” will look at the effects of the 2008 economic crisis on the gulf region, while specially focusing on Qatar.... A real decline in the demand for bank credit contraction and goods was also triggered by the financial crisis.... Rentals for new constructed office space in Qatar decreased by 10-15 percent during the 2008 first quarter.... the effects even extend to the real estate markets, which has resulted to a lack of slowdown and liquidity in real estate development....
4 Pages (1000 words) Research Paper

The effects of the 2008 financial crisis on the investment in the Gulf area specially on Qatar

The declining oil prices had detrimental impacts to the gulf Corporation Council Countries.... Reports by International Monetary Fund and World Bank do indicate that the crises have strained the Arab economies largely, such that the effects are felt up to this very day.... However, the effects… What is motivating is that the economies of these countries are slowly regaining their shape and confidence of the investors.... The Middle East Gross domestic product in 2008 was 6%....
4 Pages (1000 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us