The effects of the 2008 financial crisis on the investment in the Gulf Research Paper - 2

The effects of the 2008 financial crisis on the investment in the Gulf area and Qatar(different copy) - Research Paper Example The initial impact of the financial crisis was felt partly in some Arab states depending on their participation in the international markets (Qatar 6). Impact on Finance and Economy The 2008 global economic crisis affected the financial markets of countries in the Gulf region. In many states, the stock exchange index declined by nearly 62% in 2008. By 2009, the projected GDP growth rates had fallen from 3.5% to 0.5% (Rocha & Subika 71). In addition, the economic growth decreased by more than 3% in the same year. With the exception of Qatar and Yemen, most states in the gulf area have projected lower GDP growth rates. The cornerstone of Qatar’s’ economy is petroleum. Most of the government revenue, export earnings, and GDP are derived from oil reserves and gas exports. Qatar is the third producer and exporter of oil in the world making it the richest country in the world (Rocha & Subika 71). Effects on banking The banking sector in Qatar escaped the impact of the financi al crisis. Most banks all over the world lost their role as creditors and financiers because of the crisis. Banks in Qatar posted big profits in the Gulf Cooperation Council markets in 2009 despite the financial crisis (Sheng 45). ... Qatar’s Central Bank has taken measures particularly in the real estate sector. Qatari Central Bank issues instructions on buying of shares and financing of real estate projects. Decisions of lowering interest rates, enhancing the compulsory reserve ratios and other key issues in management of banks have been properly addressed in accordance with market mechanism. Qatar’s monetary policy is risk free due to the sound policies implemented to attract foreign markets (Rocha & Subika 65). Economic growth and Employment Before the financial crisis, the gulf region had numerous job opportunities in the world. The financial crisis led to a decline in job opportunities in the gulf area. Total employment decreased greatly. 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. Agriculture and manufacturing that were once the main sou rces of employment are now less competitive because of the export of goods to the global markets. It is difficult for women and girls to find jobs that are considered gender appropriate (Sheng 34). The financial crisis led to a decline in labour productivity in the non-oil sectors in the Gulf region and especially in Qatar. An expectation of future pick up in labour has led to hoarding resulting and reduced productivity of labor. Recent conducted analysis shows that the working age and gender have a great impact on the labour force. The global crisis has led to a reduction in migrant remittances. Migrants are important because they contribute to the labor force in the