L. V. SHKVARYA
Doctor of Economics
Key words: GCC, FDI, investment legislation, inter-Arab investment
The globalization of the world economy, as the experience of recent decades shows, has a significant impact on the development of international capital migration processes in the direction of their activation. Most of the world's countries, including developing countries in Asia and Africa, are being drawn into this process in an effort to attract foreign investment.
A striking example here is the Gulf States (GCC), which consistently take concrete measures to liberalize the flow of foreign investment (especially direct investment) and form a new organizational and legal mechanism for international economic and investment cooperation.
What are the conditions, prerequisites and, most importantly, the results of these efforts?*
INVESTMENT LEGISLATION IN THE GULF COUNTRIES
The process of attracting foreign investment to the GCC countries began after these states gained independence, i.e. in the 1950s and 1960s. During the same period, legislative acts regulating this area of activity were adopted.
Thus, the process of raising capital in the largest country in the region - the Kingdom of Saudi Arabia (KSA) - began in 1956, when the first law on foreign investment was adopted. It was amended in 1962 and 1979.1, respectively.
Among the restrictions common to the work of foreign investors in all GCC countries in the second half of the 20th century, we can mention restrictions on the share of foreign capital (from 25 to 49%), a higher tax rate, a ban on participation in operations with shares, etc.
Due to the unattractive legislative framework (tight tax climate, quota and industry restrictions, etc.), the level of FDI in the Gulf countries was extremely low during the 1950s and 1980s. Internal socio-economic problems were also one of the reasons.
In the 1990s, the changes that took place on the world market (the transition of oil and gas producing industries to the categor ... Read more