Fdi Effects In Bulgaria, Croatia, Egypt, Morocco


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Fdi Effects In Bulgaria, Croatia, Egypt, Morocco

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