Effects of the 2008 financial crisis on the investment Essay

Effects of the 2008 financial crisis on the investment - Essay Example The financial crisis of 2008 was observed to impose non-negligible impacts on the Middle East, particularly Qatar, holding the biggest position in the oil and gas resources. The fall in the oil and gas price, have further, strongly impacted the Middle East causing adverse affects the region of Qatar. The decrease in the oil and gas price has made larger exporters to observe the bad debt scenario and has also challenged the countries to pay off their international debts with greater transparency (Council on Foreign Relations, 2009). This not only slowed down the economic growth prospects, affecting the price on the commodity (Setser, 2008). Additionally, it made Middle East countries like Qatar suffer with limited financial capacity to fund projects on continuation, resulting in their failure to suffice developmental needs in time and as planned. Moreover, as the country withdrew from importing vast amount of oil and gas from the US to rejuvenate its financial position, it greatly impacted the monetary policy of the United States Federal Reserve, causing political and economic disruptions in the international trade practices for both the nations (Setser, 2008). Consequently, the sovereign wealth and central bank were considered for greater use in helping the firms and local banks aimed at stabilizing the fiscal position of the economy by refinancing their growing debts. Since the financial crisis, Qatar has used sovereign funds at a greater proportion to recapitalize their banking system and other smaller countries within the Middle East region, shifting its prime focus from attracting foreign funds. To maintain domest ic investment at a positive side and backstop the banks from incurring greater debts in the international market, many Gulf governments needed to draw on their accessible assets (Isfahani, 2008). A direct effect of the financial crisis was observed on the financial institution and the real estate of Qatar, as these