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Global Summit of Women 2003
Marrakech, Morocco
BUSINESS OPPORTUNITIES IN MOROCCO AND THE
REGION
Neveen El Tahri, Chair, ABN/AMRO Securities (Egypt)
“The Region”
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MENA “Middle East & North Africa”
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21 countries
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5% of world population
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0.7% of Internet users
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R&D about 1/5 of industrialized countries
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Map
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MENA should be our strength, it compares with Europe, Asia’s, even the USA
Total Regional Infrastructure Plan “TRIP”
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Capitalize on the regions assets:
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Wealth; with 2/3rds of worlds oil reserves
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History & weather that can attract tourism
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People; 2.5% yearly growth with 45% less than 14 years of age
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Land, raw materials,…etc to enable Industry creation & cost efficient use of
best resource to collectively compete
COLLECTIVE BENEFIT & REDISTRIPUTION “UTOPIA?”
EU recent EXAMPLE (EURO performance)
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Economic Forum in Jordan last week
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Prerequisite maybe PEACE?
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Galvanize local & Foreign Investments
Challenges
Regional Stability an overriding concern in MENA
“region has had a history of volatility which has dampened
investment and tourism, and therefore job creation”
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• Conflicts:
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Lebanon, Israeli-Palestinian conflict, Iran-
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Iraq war, Algeria, Gulf war
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• Embargos
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Libya, Iraq
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• Uncertainty
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September 11 aftermath, current Iraq uncertainty
Of the major Challenges in MENA
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Public
sector reform and governance
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Politically and socially difficult shift from public sector dominance to
private sector economic leadership
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Need to improve efficiency and effectiveness of public services
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Private sector
development and job creation
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Essential to increase investment and create 4-5 million jobs each year to
educated youth, a fertile ground for social unrest
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Education for
the global economy
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From quantity to quality (tuning to labor markets; global citizenship;
tolerance; etc.)
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Water
management in a water stressed region
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Gender
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Unequal rights in many countries
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Lowest female labor force participation in the world
Examples of how the world is being analyzed to asses capital flows
Three Dimensions of a Good Investment Climate
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Macroeconomic
stability and openness:
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stable and transparent fiscal accounts, low inflation and trade barriers
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Good
governance and strong institutions:
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regulatory institutions that promote competition
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support efficient resource allocation,
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protect property rights
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implementation without harassment and corruption
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Strong legal and financial institutions are key
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Adequate
infrastructure:
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quality and quantity of power,
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Communications
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water
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Transport
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financial infrastructure,
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skills and technology
Creating change in the investment climate
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The power of evidence for innovation and learning;
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Avoid policies to 'institutionalize' opportunities for
corruption (e.g., quotas and licenses); e.g. reducing inspections in
transition
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Change generated by competition, e.g. property rights in
Thailand
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Public action
by
policy/social entrepreneurs
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Press and
media:
governance by discussion in civil society
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Creation of constituencies and partnerships for reform and
change;
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Conviction and
leadership
are necessary
to deliver institutional change
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Good
governance and regulatory institutions
(Includes the
institutions for)
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Competition:
entry, exit, state ownership
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Resource
allocation:
tax, labor, capital (financial inst.)
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Property
rights and enforcement:
rule of law, courts
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Public
interest:
environment, health, safety
SMEs and the investment climate
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SMEs bring flexibility, observability and “disruptive innovations”
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SMEs suffer most from a bad investment climate
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Symptoms are evident in “missing middle” of firms (for different reasons,
e.g. transition)
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Encouraging SMEs
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From micro to
small and medium-sized;
informal to formal; removing obstacles to growth; SME financing (e.g., IFC
SME financing)
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From large to
medium-sized
in transition;
restructuring dinosaurs, spinoffs
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Avoid perverse
incentives
for small
firms to remain small and large firms to fragment, e.g., Russian tax
incentives for SMEs
There are also significant differences by firm size…
The Potential can be assumed
if ………..
Egypt’s
breakdown of it’s GDP
2001/2002(P)
Egypt’s is going through a current Economic glitch yet we can boast a Decade
of Positive Statistical Change
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Population Growth down from 2.7% yearly increase to around 2%
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GDP Growth of 3.1% as opposed to 1% (high of 6.3%)
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Budget deficit down to 4.5% as opposed to 18.4% (low of 1.2%)
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External Debt down almost to half, from $50Billion to $28.6.Billion
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Inflation tamed down from 18% to 2.4%.
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Local interest rates down from 21% to 9%.
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Exchange rate of the $1- to the Egyptian pound 2.70, 3.44 stable for 7 years
but moved during the last year, a managed peg mechanism {LE4.5 with a +/-3%
band today}
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Per Capita income increased from $247- to $1,121
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From a negligible figure, foreign reserves had reached a high in excess of
$24Billion and now down to $14.14Billion (representing 9 months import bill)
Stock markets are key reflection of Economic Performance & opens
opportunities
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Stock Markets are the real reflection/mirror of any economy
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The trading volume is an indication of:
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Investor confidence
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Encourages flow of capital inflows
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The more sophisticated markets are:
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Number of listed stocks are close to real number of registered stocks
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Market capitalization of listed stocks represents a higher percentage to GDP
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Confidence can show total turn around volumes of more than 100%
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Markets can be sought to source capital as opposed to banks
Economy & the Stock Markets
Comparative Volumes in $ Million
as of Aug. 2002
Comparative Market Caps in $ Million
as of Aug. 2002
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