“No boring presentations and no show and tell, but we want to discuss substance on how to promote investment techniques, how to reach investors and what to do when they come in,” that is the message hammered across by a participant at a regional investment workshop on Monday.
Investment promotion efforts, according to investment advocates, require additional funds, pooling administrative reforms, training human resources and applying appropriate promotion techniques.
Despite arduous efforts by most Arab countries to lure investors from home and abroad, participants agreed that foreign direct investment (FDI) in the Middle East falls short of expectations.
“The Middle East is somewhat a black hole in terms of FDI and that is a lost opportunity,” said Frank Sader, foreign investment advisory service program manager of the Middle East, Latin America and the Caribbean.
“This region has a less liberal and more restrictive environment for investment, in general, compared to other regions,” he told the Jordan Times on the sidelines of the workshop.
The challenge, he added, is for Jordan to establish itself as a focal point for multinational investors and to establish businesses geared towards the local and international markets.
Inter-Arab investments totaled $2.183 billion last year, while overseas private sector Arab investments stood at $800 billion, according to figures provided by the Kuwait-based Inter-Arab Investment Guarantee Corporation (IAIGC) in a report.
Total FDI received by Arab countries in 1999 reached $8.7 billion, 1 percent of the estimated $865 billion of total global FDI inflows and 4.2 percent of total FDI inflows to developing countries, estimated at $207 billion, said the report.
Such figures, according to IAIGC director general Mamoun Hassan, demonstrate beyond a doubt that the Arab region has not been an attractive location for FDI.
Outlining the structural reforms the Arab countries achieved during the past two decades, Hassan said nine governments have established separate investment promotion agencies to overcome administrative barriers, while others have established offices.
He added that some agencies — like the Jordan Investment Board — have successfully introduced a “one-stop-shop” service that provides foreign investors with needed information and facilitating licensing procedures.
“In their quest for answers, Arab countries have resorted to in-depth analysis of the investment process. Research has shown that despite the Arab countries' efforts in more than one direction, they still receive complaints from investors about administrative difficulties,” said Hassan.
“Paradoxically, there are sources of finance that have not been tapped, and at the same time there are Arab investment projects that are seeking finance. What is lacking here is effective promotion that will merge the two,” he added.
The workshop, entitled “Investment Promotion Techniques in the Arab Countries,” has Arab and foreign participants from 23 Arab countries as well as the United States, Ireland, UK, Czech Republic and Costa Rica taking part in seven sessions.
The presentations will tackle diverse issues that include streamlining the investment environment, advertising, role of the Internet and targeting investors.
The workshop is organized by IAIGC in cooperation with the JIC and the Foreign Investment Advisory Service of the World Bank Group.
Meanwhile, JIB director general, Reem Badran, said on Monday the recent wave of Israeli-Palestinian clashes have slightly slowed the flow of investments into the Kingdom, but interest was still forthcoming.
“Investments are partially swayed, but we are hopeful that there will be solutions that lead to peace in the region,” Badran told the Jordan Times on the sidelines of the regional investment workshop.
She said that economic stability and security in the region would attract investors to the Kingdom, noting that the Jordan Investment Board has recently received interested delegates from Taiwan, Turkey and Pakistan.
The director noted that the volume of investments which benefited from the Investment Promotion Law has increased by 70 percent, over the same period of last year, to reach JD702 million during the first ten months of 2000.
She said the recent signing of the Free Trade Agreement with the US government — a pact that gives Jordanian goods duty-free access to the US market and affords similar benefits to US goods — is a milestone for Jordan's economy.
She said the JIB will also raise awareness and assess the competitive edge of the Jordan-EU Association Agreement in its efforts to lure potential investors at home and abroad.
The Jordan-EU partnership, she said, will enter into force during the first quarter of 2001. — ( Jordan Times )
By Suha Ma'ayeh
© 2000 Mena Report (www.menareport.com)