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Investment promotion and access to markets: new opportunity?

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Marie-Estelle Rey, Senior Advisor, MENA-OECD Competitiveness Programme, 11 May 2016, Regional conference: Investment and inclusive growth in the midst of crisis, Beirut

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Investment promotion and access to markets: new opportunity?

  1. 1. Regional Conference on Investment and inclusive growth in the midst of crisis: lessons learned & ways forward 11 May 2016, Beirut, Lebanon Session 2: investment promotion and access to markets: new opportunity? Marie-Estelle Rey, Senior Advisor, MENA-OECD Competitiveness Programme
  2. 2. Needed: investment is a powerful development enabler Possible: investor’s returns despite risks A challenge: fragile equation between security, institutional stability, ability to operate and investors returns Investing in fragile and conflict-affected states
  3. 3. What can a State do to mitigate investment risks? 3 1. Build a conducive, transparent and predictable investment regime 2. Build a strong institutional framework for investors 3. Improve trade and investment integration and access to markets 4. Strengthen the public-private dialogue
  4. 4. Build a conducive, transparent and predictable investment regime 4 1. Legal protection and security (treatment, expropriation, dispute prevention and settlement): • National investment laws (strong movement of reforms in the region) and business-related laws • International investment agreements: MENA countries signed 700 BITs and 60 trade and investment agreements and several regional agreements (Arab League Investment Agreement) • Transparency, accountability and implementation
  5. 5. 5 2. Openness to attract the needed investments: • Equity participation: eg Libya (the confusing 49/51 rule) vs. Iraq • Restricted sectors: eg Jordan (construction sector) vs. Iraq • Other issues: exchange control, transfer of funds, personnel restrictions, local content, local representation Build a conducive, transparent and predictable investment regime
  6. 6. 6 3. Investment and trade facilitation • Reduce regulatory and administrative obstacles and red tape to ease doing business • Trade facilitation (reduce unnecessary costs incurred by traders every time an import or export crosses a border) • Business linkages between SMEs and MNEs and between local businesses and the diaspora • Development of economic zones: “safe” investments with local work force Build a conducive, transparent and predictable investment regime
  7. 7. 7 7 • Central role of investment promotion agencies to attract and retain investors • Specific activities in fragile context (eg IDAL, NIC): focus on specific competitive sectors, investors targeting and outreach: WB study Focus on FCS-accustomed investors, regional investors, diaspora, institutional investors (SoEs, SWFs, socially concerned investment funds) • Institutional coordination to improve the regulatory framework and decision process for investments (OSS) • IPA network: Promote exchange of experiences and business opportunities between IPAs Build a strong institutional framework for investors
  8. 8. 8 8 • Lack of regional integration and interconnectedness: potential! Exchange with neighbours (when political situation allows) for markets access and diversification • Access to large markets: EU (rules of origin, Association agreements, DCFTAs), China, India… • Need for infrastructure integration and connectivity • Integration of economies into GVCs (over two thirds of world trade is linked to multinationals’ activities; design a regional value chain strategy; sector-specific strategies in line with development goals and value- added) Trade and investment integration/access to markets
  9. 9. • Scattered voice - vested interest • Need to strengthen the policy advocacy role of the private sector to define and implement reforms • The private sector also has a responsibility: responsible business conduct can enhance business’ contribution to stabilisation and reconstruction and prevent businesses from doing harm (OECD MNE Guidelines and Risk Awareness tool for MNEs in Weak Governance Zones) • Business associations, as well as trade unions, should be central actors • The role of the diaspora Strengthen the public-private dialogue: the voice of the private sector
  10. 10. OECD experience and tools • 10 years of work in the region – analysis of the investment climate and shortcomings • Regional policy dialogue • Several on-going projects in fragile and conflict- affected states: Lessons learnt from the Iraq project: “Do no harm” principle (engage stakeholders from different political backgrounds), flexible approach (respond to emerging or changing reform priorities), links to political, security and development objectives, project ownership (and local representative) and intergovernmental and public-private dialogue • Policy and statistical tools • Public-private dialogue and donors’ coordination for efficient intervention
  11. 11. Contact details Marie-Estelle REY Senior Advisor MENA OECD Competitiveness Programme e-mail: marie-estelle.rey@oecd.org Carlos CONDE Head of the OECD Middle East and Africa Division, Global Relations Secretariat e-mail: carlos.conde@oecd.org

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