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

The effects of the 2008 financial crisis on the investing in the Gulf area specially on Qatar - Research Paper ExampleIn this case, the pass up in vegetable oil prices severely affected the outside(prenominal) exchange earnings and take to low foreign investment capital inflows in Qatar economy. Qatar and other countries in the gulf area had accumulated vast coin reserves after the oil prices recorded a high of USD 148 per barrel in July 2008 due to a weak US dollars and geopolitical tensions that led to oil speculations (Casa, 2009). However, the last five months of 2008 saw decline in equity foodstuff activity and oil demand thus leading to 75 percent injury on the OPEC Reference Basket from USD 148 per barrel to USD 37.72 per barrel earlier the end of the year (Distr, 2009). Thesis argument the 2008 financial crisis negatively affected investments in Qatar through tightening of credit, decline in global oil demand and subsequent slowdown of the real estate and parentage markets in the economy. Credit crunch disrespect the high liquidity level of the main financial institutions in Qatar and decline in interest judge before the onset of the 2008 financial crisis, the availability of credit for investment purposes declined during the financial crisis due to high-risk antipathy by the banks (Casa, 2009). ... The financial crisis triggered steep fall in asset prices and widened the credit default swap (CDS) spreads on sovereign debt. In this case, the Qatar government debt remained elevated thus reflecting the high-leveraged government entities. Fall in stock market prices According to Monetary Fund (AMF), of 2008 financial crisis led to a drastic fall in stock investments by half in the first year and further by additional 25% in the subsequent quarter. The loss in Arab stock market translated to significant decline in the level of investor say-so and decline in the overall investment activities in the economy (Distr, 2009). The Doha Securities mark et experienced a decline in the level of trading activities and the markets main index declined by 28 percent to 6886 points. The gulf region countries recorded significant escalation in construction properties before the crisis, but the crisis led to slowdown of construction boom due to tight credit conditions in the countries. The high house rents before the crisis made Qatar citizens to increase their economic contributions towards excessive crediting allocation on such departments. After the decline in oil prices, the construction boom slowed down and housing prices deflated thus leading to significant losses in the real estate sector (Distr, 2009). Decline in tourism financial returns The 2008 financial crisis in like manner led to considerable decline in tourism returns in Qatar. This is evidenced by significant reduction in business tourism arrivals and investors from European countries and North America (Casa, 2009). Qatar immigrants in western countries reduced or comple tely stopped the foreign remittances to their home country. Furthermore, the crisis also