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

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. 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. 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. 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
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
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
• 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
• 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. • 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. 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. 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