Fdi Effects In Bulgaria, Croatia, Egypt, MoroccoPresentation Transcript
FDI Effects in Bulgaria
Macroeconomic indicators show consistent growth in the years leading up to the global financial crisis Real GDP Growth Inflation 2011 2004 2003 2004 2005 2006 2007 2008 2009 2005 2010 2006 2007 2008 2009 2010 * February 2011 FDI Inflow Unemployment € mln. 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2009 2010 2010 2011 2009 * February 2011 Source: Bulgarian National Bank
6 FDI in Bulgaria comes mostly from EU countries and is concentrated in sectors FDI flows by industry, 1996-2010 (€ mln.) FDI by host country, 1996-2010 (€ mln.) Netherlands 5,740 Real Estate 8,419 Austria 5,183 Finance 7,422 Greece 3,763 Manufacturing 6,552 UK 2,948 Trade 6,425 Germany 2,646 Cyprus 2,229 Construction 2,608 Hungary 1,362 Energy 2,492 USA 1,337 Telecom 1,955 Russia 1,229 Other 2,376 Italy 1,221 Source: Bulgarian National Bank
Educated and skilled workforce is among the main advantages of Bulgaria 0 Almost 60,000 students graduate every year from over 50 universities Bulgaria has one of the highest proportions of students abroad from all European countries Iceland 17.8% 19,480 Business Ireland 14.2% Social sciences 8,372 Slovakia 10.2% Engineering 7,178 Bulgaria Education 3,677 Greece Health 3,166 Austria Law 1,553 Germany Architecture EU-27 average Agriculture Students in another EU / EEA country, % of all Other Czech Republic 12,684 Source: National Institute of Statistics, Bulgaria
Why invest in Bulgaria? Political and business stability EU and NATO member Currency board Low budget deficit and government debt Low cost of doing business 10% corporate tax rate Lowest cost of labor within EU Access to markets European Union / EFTA Russia Turkey / Middle East Educated and skilled workforce Government incentives
1000 existing jobs, adding at least 1000 more
Bulgaria wins over 30 countries
Higher standard of living, greater skills, education put to use
Diversification of the sweets market Over 1000 jobs within the factory Loyal brand No threat of competing with the local market
FDI Effects in Croatia
Who is investing in Croatia?FDI Stock by country through 2005
Equity inflows and earnings reinvested into newly established FIEs1993-2005
Croatians are highly educated!
Accession to the EU Applied for membership in 2003 Completed 29 out of 33 “chapters” Public support is low due to EU financial situation and harsh sentencing of Croat generals in the Hague Possible accession by 2013
Former Soviet history
Delay in Reforms
Expansion of the service sector
Should expand manufacturing
Greenfield investments predominant
Does the service sector lead to economicgrowth?
Trading between the EU member states
Economic recession in 2008
Global Competitiveness Index - Ranking SEE and CEE countries according to performance in education and innovation Source: The Global Competitiveness Report 2009-2010, and 2007-2008, World Economic Forum Note: Global Competitiveness Report 2007-2008 is based on survey and data of 131countries, while for 2009-2010, N=133.
FDI Inflow in $
How FDI Impacts Development in Egypt
Education Currently combating low levels of education and illiteracy. Business firms are required to combat illiteracy among their employees. As of 1999, public expenditure on education was estimated at 4.7% of GDP.
Education and Coca-Cola Has been investing in the region for 50 years. Partnered with UNICEF to help get rid of terminal diseases such as Polio, HIV, and Hepatitis C. The goal of this partnership was to shed light on the issue of AIDS by providing adequate education and prevention. Coke is promoting education, the development of information, and communication materials all in an effort to help promote AIDS awareness.
Technology Egypt mostly specializes in information technology, tourism and travel, consumer goods and Telecom companies. Bringing development through the Information Technology Industry Development Agency (ITIDA). Develops infrastructure and helps existing companies. Creation of more jobs and encourages international business. Up to 50,000 new job opportunities.
Technology and IBM IBM developed The Service Delivery Center, which promised it would employ up to 100 people in the beginning and then increase up to 1,000 being employed within the company. Assumed to bring about more growth in Egypt as well as develop technology, education, and industry. IBM is just one of many companies that has invested in Egypt. Other examples would be: Intel, Coca-Cola, and Microsoft.
Egypt’s Future Because of the demonstrations that took place earlier this year, Egypt’s GDP is estimated to take a 2 to 3 percent nosedive. The reasoning behind this assumption is due to the fact that tourism drastically came to a stand still and many businesses closed down. This could cause potentially significant damage to Egypt’s future development in many sectors. Currently the government to already devising strategies for Egypt to withstand the latest economic blow.
Impact on FDI Egypt went from a closed market economy to more liberalized and open. Technology has further helped develop initiative in Egypt by creating education opportunities.
How FDI Helps Develop Morocco
Impact of Education on FDI Chemonics educated the ministry of tourism and development and they were better able to tap into the rural tourism market and bring in more inflow of FDI from a more diversified international clientele. The Moroccan government has also funded training for the staff that would be needed for the Plan Azur, which has enhanced human capital.
Impact of Capital on FDI Capital has had a positive impact on the attraction of FDI, especially when it came to building infrastructure in Morocco. Ex. Plan Azur
Plan Azur-Impact on Morocco’s FDI
Impact of Technology on FDI All sectors in the economy are turning to the new technologies which will lead to increased potential for development in the telecom sector, of which Morocco is a regional leader. This technology has allowed the largest Multinational Telecommunication operator, Maroc Telecom to operated in various other North West African countries.
MarocTelecom and Vivendi Agreement -- Impact on FDI Table 4.3: Africa’s share of FDI inflows (millions of US dollars) Year Africa World Percentage 91–96 4,606 254,326 1.8 1997 10,667 481,911 2.2 1998 8,928 686,028 1.3 1999 12,231 1,079,083 1.1 2000 8,489 1,392,957 0.6 2001 18,769 823,825 2.2 2002 10,998 651,188 1.6 Source: United Nations, World Investment Report 2003.
MarocTelecom and Vivendi Agreement -- Impact on FDI Africa’s share of FDI inflows (millions of US dollars) Source: United Nations, World Investment Report 2003.
The similarities found between Morocco and Egypt is the countries’ openness to MNC investments because the policymakers see a direct correlation between the increase in skilled human capital and the creation of jobs that leads to an amplification of FDI amounts and more pervasive country developments. Egypt and Morocco are the most integral North African countries because of their prime geographical location, openness to FDI and trade relations with the United States and other advanced economies such as France from the EU.