Overview04

Slide1: 

ANIMA Réseau Euroméditerranéen d’Agences de Promotion des Investissements Euro-Mediterranean Network of Investment Promotion Agencies 3rd ANIMA Annual Conference Rome, 5 October 2004 Bénédict de Saint-Laurent Invest in France Agency The Mediterranean new frontier for investment

A. The Mediterranean challenge: 

A. The Mediterranean challenge The biggest economic divide in the world Gap of 1 to 10 in GDP per capita between EU and MEDA Vs. 1 to 7 between USA and Mexico MEDA’s recovery implies strong Europe’s involvement Europe’s interest is also to cope with wealthier Southern neighbours If EU-MEDA integration were at the level of Japan-China link +0,75% direct growth EU-15: 22,689 US$ MEDA-10: 2,360 US$ New members-10 : 5,373 US$ GDP per capita 2002, World Bank

Why EU and world business must look at MEDA: 

Why EU and world business must look at MEDA It is an intermediate market EU-25 + MEDA-12 = 720 m pop. and 8 times China’s GDP! Incomes per capita similar to Portugal or Greece pre-EU >240 million population in 2004, 320 million in 2025 MEDA is the EU new frontier A formidable development reserve for European growth Labour cost attractiveness Numerous co-development opportunities for EU-based companies

MEDA in turn vitally needs private investment from EU/world : 

MEDA in turn vitally needs private investment from EU/world The job issue Official MEDA unemployment:12 to 20% (in fact >20%) Just to keep this rate, need for 40 million jobs in ten years Implies a high MEDA growth (7%/year), which cannot be only endogenous A time bomb! During 2005-2015, EU will lose 10 million workers EU capital flows may at the same time Contribute to modernise the MEDA economic and social fabric Suggest efficient working models for the industry Inject the money which MEDA States can seldom release Develop growth in both Europe and the South Contribute to peace and security

EU, N°1 Investor in MEDAHowever EU dedicates only 5% of its outward FDIs to MEDA: 

Source : Alessandrini, 2000 EU, N°1 Investor in MEDA However EU dedicates only 5% of its outward FDIs to MEDA

FDI to MEDA, 1997-2003: 

FDI to MEDA, 1997-2003 Israel Palestine Egypt Lebanon Turkey Algeria Morocco Tunisia Malta Cyprus Jordan Syria (Source: UNCTAD)

Recent trends in FDIs to MEDA (MIPO): 

Recent trends in FDIs to MEDA (MIPO) 575 projects detected since 1/1/2003 (21 months) Around €20bn in capital injection (US$ 24 bn) Almost 38,000 jobs created Real figures are higher (magnitude of projects only known in 2/3rd of cases) Promising quality of new investments Some strategic/ high profile/ high tech projects (R&D etc.) Projects are coming from 50 different countries Presence of blue chips and transnational companies A new wind of optimism The gap between MEDA and Central/Eastern Europe seems to be closing MEDA recovery is an on-going process

The ANIMA observatory: MIPO: 

The ANIMA observatory: MIPO Mediterranean Investment Project Observatory A data base with all MEDA investments or prospects (realised or publicly announced for a short term implementation) An on-line data base with access on ANIMA web site An annual report An on-going process No specific bias concerning countries A micro-economic approah, based on real projects All MEDA countries are treated the same way (same newsflow) Possible comparison with other observatories managed by Invest in France (France, Europe, Eastern Europe)

The MIPO process: 

The MIPO process Mediterranean Investment Project Observatory (MIPO) Around 300 projects and leads detected per year Internet Monitoring of companies Others sources Fairs Listing ANIMA team IPAs & other partners Open data bases www.kompass.fr, www.societes.com, www.lexpansion.com Semantic analysis Selection of 700 to 1,000 news and alerts per year for MEDA

The average MEDA investment project: 

The average MEDA investment project An investment from Western Europe (France, Spain, UK, Germany) Or USA And more and more from the rest of the world (Gulf, Asia…) Main destinations Morocco, Turkey, Algeria, Egypt, Israel, Tunisia, Lebanon Machrek trails behind Maghreb Five major sectors Textile, automotive industry, tourism, agrobusiness, energy + a booming sector: ICT (software, call centres etc.) Average size per project (known for 2/3rds of projects) Investment: €94m million Job creation: 309 jobs Rather big projects…

FDI projects per country of destination: 

Source: MIPO 1/1/2003 to 1/10/2004 FDI projects per country of destination

Who is investing in MEDA? Project origin: 

Who is investing in MEDA? Project origin Despite EU and USA concentration, 50 different countries of origin France is leading (one third of projects, less in terms of FDI amount) Remarkable US presence (44 projects in 2003, 49 in 2004) Contribution of investments coming from the Islamic countries (19 projects in 2003, 25 in 2004) Asia increases its presence (26 projects) Intra-MEDA investment is growing (20 projects so far)

FDI projects to MEDA per origin : 

FDI projects to MEDA per origin EU MEDA Non MEDA Islamic States Others Source: MIPO

FDI projects in MEDA per sector, 2003-2004 : 

FDI projects in MEDA per sector, 2003-2004 Source: MIPO 1/1/2003 to 1/10/2004

Top MEDA investments : 

Top MEDA investments 43 projects announced over €100 million Main sectors: tourism, infra-structure, cars, telecom, energy Source: MIPO 1/1/2003 to 1/10/2004

MIPO on www.animaweb.org: 

MIPO on www.animaweb.org

Assessment of the MEDA situation: 

Assessment of the MEDA situation In terms of FDIs MEDA’s recovery is real (back to the US$10bn/year level) But this is far from satisfactory : the real potential of the region is around US$30-40 bn!!! Investors’ attitude MEDA is not on their short list, sometimes not even in their long list A few exceptions: e. g. car industry in Turkey, energy in Algeria, real estate & services in Lebanon, tourism and ICT in Morocco or Tunisia etc. We need to boost The efficiency of the national investment promotion agencies The global image of MEDA The willingness of EU/world operators to consider the region

B. What is the ANIMA response?: 

B. What is the ANIMA response? ANIMA= a capacity building & networking EU programme EU MEDA partnership for investment promotion agencies (IPAs) Improvement of the FDI attraction capabilities of MEDA countries Development of FDI flows & new industrial co-operation schemes Means Budget of around €6m (2/3 funded by Europe) Possibility to organise numerous seminars (50 over 3 years), regional studies (18), MEDA participation in fairs (14), study trips in EU (10), technical assistance missions (18), etc. A set of common tools (economic intelligence, data bases, web) Mid-term perspective ANIMA is a facilitator, a catalysor for initiatives A possible mid-term body (MEDA investment promotion network)

Agencies associated to ANIMA: 

Agencies associated to ANIMA

ANIMA: a value-added network : 

ANIMA: a value-added network Develop the flow of projects and FDI to MEDA Increase the operational capabilities of MEDA IPAs

Global achievements (1) : 

Global achievements (1)

Global achievements (2) : 

Global achievements (2)

Seminars & Forums : 

Seminars & Forums dates & topics 17/9/02 19/9/02 FDI issues in MEDA. ANIMA Launch Conference Paris 25/11/02 29/11/02 Maximising FDI and IPA strategy Malta 9/12/02 20/12/02 Communication & territorial marketing Marseille 12/1/03 16/1/03 Economic intelligence, project identification Cairo 27/1/03 31/1/03 Prospection network & support to investors Tunis 22/2/03 24/2/03 MEDA Franchise Forum Barcelona 24/2/03 28/2/03 Maximising FDI and IPA strategy Rome 24/1/03 25/1/03 ANIMA Presentation. WAIPA Forum Geneva 10/3/03 12/3/03 Assises Méditerranéennes de l'International Marseille 17/3/03 21/3/03 Building IPA strategy and communic. Cyprus 5/5/03 9/5/03 IPA creation & strategy Rabat 18/5/03 28/5/03 Visit of EU technoparks and IPAs Nice, Valencia, Munich 2/6/03 6/6/03 FDI economics & studies Marseille 2/6/03 4/6/03 World Free Zone Convention Brussels 21/6/03 25/6/03 Maximising FDI and IPA strategy Alger 23/6/03 27/6/03 IPA creation & strategy Ankara 30/6/03 4/7/03 Préparation des offres territoriales Marseille 8/7/03 10/7/03 A common tool for regional investment cooperation Marseille 14/7/03 17/7/03 Communication & marketing territorial (in French) Rabat 15/9/03 19/9/03 The Med IPA seminar for webmasters Marseille 15/9/03 19/9/03 Venture Capital + SME Conference AgriTech Fair Tel Aviv 28/9/03 2/10/03 Territorial marketing Cairo 12/10/03 16/10/03 Country marketing and project identification Amman 19/10/03 23/10/03 Economic intelligence, communication Ramallah (Palestine) 19/10/03-23/10/03 MEDA FDI Performance. 2nd ANIMA Conference Marseille 8/12/03 12/12/03 MEDA-Entrepreneurs Workshop n°1 Marseille 8/12/03 12/12/03 Intégrales de l’Investissement Rabat 19/2/04 21/2/04 2nd MEDA Franchise Forum Barcelona 22/2/04 27/2/04 MEDA-Entrepreneurs Workshop n°2 Istanbul 08/3/04 12/3/-04 IPA Economists Meeting n°2 Marseille 15/3/04 19/3/04 IPA webmasters N°2 Ifrane, Morocco 26/4/04 01/4/04 Visit of Italian IPAs and road shows for investors Marche, Tuscany, Latium 27/4/04 30/4/04 MEDA-Entrepreneurs Workshop n°3 Marseille 15/5/04 20/5/04 After-care & MEDA Entrepreneurs Alger 17/5/04 19/5/04 Building the IPA communications skills Gaza (Palestine) 26/5/04 28/5/04 IPA managers meeting n°2 + La Baule Investment Forum La Baule 26/5/04 28/5/04 FDI Statistics Beyrouth 07/6/04 11/6/04 Investment generation/ Road-show in Spain Valencia, Barcelona 14/6/04 16/6/04 IPA development and strategy AFII Damascus 28/6/04 02/7/04 Investor Targeting & Economic intelligence Nicosia, Cyprus

Promoting the region: ANIMA guides: 

Promoting the region: ANIMA guides

http://www.animaweb.org : 

http://www.animaweb.org The reference web site on investment in the Mediterranean 5 headings About ANIMA Invest in the Mediterranean Country opportunities Business opportunities (sectors) ANIMA intranet French & English 150 pages +Info on line 10,000 visits per month

Think r e g i o n a l: 

Think r e g i o n a l Importance of intra-MEDA activities in ANIMA Networking, direct contacts etc. Regional seminars or events (>10 up until now) Testimonies and experts from MEDA IPAs Common workshops on non-competitive projects (MEDA-Entrepreneurs) Regional presentations in road-shows (Maghreb, Machreq) Intra-MEDA investment is growing (20 projects in MIPO) New initiatives envisaged (examples) Possible MoU on investment between Israel & Palestine Common work on industrial relocations to MEDA (between CIDEM-Catalunya and MEDA agencies) Common projects on sectors or sub-regions (promotion, industrial co-operation with EU companies etc.)

Search for concrete results: 

Search for concrete results Via micro-projects, e. g. Franchise sector (Euromed Franchise Forum, Barcelona) Flow of contacts / leads / projects detected via ANIMA Via novel initiatives, e. g. Re-investment by diasporas (MEDA-Entrepreneurs) Road-shows in Italy, Spain in 2004 (+UK, France, Germany?) MedIntelligence: technoparks connected throughout MEDA Project profiler (to detect investors) in www.animaweb.org Via studies and prospection directed at MEDA niches E. g. textile, call centers, ICT, cosmetics, organic agriculture, medicalised tourism, thalassotherapy, yachting Via investment forums and BtoB meetings, e. g. Euro-Mediterranean Investment Summit (Marseille, 1/2005) Euromed Venture Capital Forum (Lyon, 5/2005) Assises Méditerranéennes de l’International (2003 & 2005) etc.

ANIMA rationale for franchise : 

ANIMA rationale for franchise High growth, variety of franchise businesses Morocco: from 42 franchise networks in 1997 (200 points of sale) to 150 franchise networks in 2003 (700 points of sale) Egypt: from 7 food networks in 1990 to 34 in 2003 Job creation On average, 13 direct jobs and 20 indirect jobs -suppliers etc. Simple business format Ideal for emerging entrepreneurs Partnership, learning Link franchisor-franchisee Transfer of knowledge and management methods Adapted to MEDA’s situation Most of the risks are taken by the franchisee and not the franchisor Intégrales de la Franchise launched by DI Morocco Moroccan leaflet on franchise Source: DI

Re-investment by diasporas: 

Re-investment by diasporas Several MEDA countries have a large-scale emigration Huge emigrants’ remittances 2nd source of external funding in developing countries MEDA entrepreneurs living abroad encouraged to Investing back in their home country Introducing new technologies or management methods Use of the Marseille “Home Sweet Home” example Project directed towards young Frenchies installed in the Silicon Valley or London City MEDA-Entrepreneurs is reproducing the concept in 7 MEDA countries

MedIntelligence: 

MedIntelligence Survey of MEDA incubators, technoparks & R&D centres 250 to date! Creation of a network R&D support to foreign companies locating in MEDA Cluster strategies (‘Call Center Valley’, ‘Textile Valley’…) Multi-country researches (EU PCRD, clinical tests, ICT…) Benefits New (‘hi-tech’) image of MEDA Use of the 000s of engineers and diplomees graduated each year Attraction of R&D-driven foreign investments

ANIMA road shows e. g. Barcelona, June 2004 : 

ANIMA road shows e. g. Barcelona, June 2004 Get projects!

Launch of a Euro-Mediterranean Investment Summit : 

Launch of a Euro-Mediterranean Investment Summit The 1st international forum on investment opportunities in the Euro-Med region Goal: to create a reference event for the Mediterranean businessmen Marseille, Palais du Pharo, January 13-14, 2005 Co-operation with "The Economist" 2,5 days: conference, 12 workshops, exhibition Banks, institutions, companies, entrepreneurs, experts 300 to 500 participants expected

ANIMA’s impact: 

ANIMA’s impact ANIMA, an accelerator for investment in MEDA IPAs on the move! Trust and self-confidence are back People those who make the difference Hundreds of executives and staffs trained in MEDA IPAs Warm co-operation spirit among participants Bottom-up and regional initiatives are coming Practical results Investments on the rise again (cf. MIPO) More than 10 projects per month directed towards MEDA IPAs Contacts established with more than 100 major world investors, better aware of the region’s potential ANIMA active in most major EuroMed investment events However: need for a change of speed / an increased gearing ANIMA

To sum up: 

To sum up What ANIMA has done is probably OK We have planted the seed, or the small tree… …But it will take time before it produces fruits And we also have to nurture this fragile tree…

C. Perspectives: 

C. Perspectives Need for an ambitious « Initiative for investment development in the Mediterranean » Possible objectives 2010 for MEDA-10: Boosting foreign investment: from 300 to 1,000 projects per year Tripling of the FDI amount to MEDA: from 10 (average) to 30 billion € per year Creation of 100,000 directs jobs (vs. 25,000 now) per year and 1 million indirect jobs This would imply (some proposals) Continued country reforms (via MEDA investment charter) The building of a new industrial image for MEDA The setting-up of a prospection force The continuation of core ANIMA activities (capacity building / economic intelligence / web site…) An efficient networking with other bodies, especially business associations, EIB/FEMIP, multilaterals, SME agencies

Commitment to reformsThe MEDA Investment Charter: 

Commitment to reforms The MEDA Investment Charter An objective, independent, permanent MEDA scoreboard With specific indicators on each country Market, business climate, economic performance Infrastructure & technology Governance & transparency … Based on existing and unquestionable data Doing Business (World Bank) World Economic Forum, IMD Rating agencies, etc. An instrument showing countries’ commitment towards reforms Virtuous process of "measurable" improvement A kind of ANIMA “label” Considered as a reliable benchmark by investors

Image building: 

Image building Despite the importance of politics and culture among the MEDA handicaps… Regional conflicts, security concerns Lack of regional integration, fragmented markets Insufficient legal standards & practices Few democracies Powerful and sluggish bureaucracies Low speed of privatisations Limited domestic savings –weak re-investment in the region …A lot may be achieved to attract investors Potential growth is there (cf. Turkey GDP, 1st Quarter 2004) Stability and investment protection is there Need to inform about reality, e.g. Algeria, Syria, big markets Anticipate market integration (Euro-Med free trade zone in 2010/12) But let’s make it known via efficient channels People, networks, events, public relations etc. Specific/targeted campaigns (airports, web, rating agencies, etc.) Use of opportunities (from tourists to migrants’ summer holidays)

Prospecting Project generation: 

Prospecting Project generation Need for a more agressive FDI search From passive or demand-driven promotion (web site, image, road-shows etc.)… …To pro-active prospection of leads and projects Possible organisation A prospection network is very costly (range of €4 to 10m/year) Presence needed in at least 5 EU capitals + US and Asia Solutions to be considered Use of consultants paid on success fees? Mobilisation of diplomatic networks (as business developers) Use of EU IPA networks at marginal cost Need to address supra-nationality/subsidiarity/responsability issues This is the right time for MEDA Eastern/Central Europe relative decline in 2003-2005 China over-investment could be favourable to MEDA after 2005 A window of opportunity?

NetworkingBuilding an efficient EuroMed alliance: 

Networking Building an efficient EuroMed alliance Develop MEDA ownership Cf. changes in ANIMA: MEDA secondments, workshops etc. Need for a high level « piloting system » (Governments) Federate all driving forces interested in MEDA development Business, Chambers of Commerce & Industry Liaise with EIB FEMIP (private sector / SME facilities) NGOs Multilaterals (UNCTAD-WAIPA, UNIDO, WB, OECD, etc.) Other EU IPAs (regional development agencies) Projects such as UNIMED, EuroMed market etc. Keep a limited hub/technical secretariat Flexible, responsive, value-added team Able to drive an ambitious/decentralised action plan A network of networks rather than an institution

Thank you ! Contact us: 

Thank you ! Contact us ANIMA Coordination (French desk) : Bénédict de Saint-Laurent, Invest in France T: + 33 4 96 11 67 62 Mailto : bdsl@afii.fr Italian desk: Alessio Ponz de Leon et Raffaela Di Emidio, ICE, Italy T: + 39 06 59 92 68 89 Mailto : cooperazione@ice.it Moroccan desk: Laïla Sbiti, Direction des Investissements, Morocco T: + 212 37 67 35 06 Mailto : lailas@invest-in-morocco.gov.ma EuropeAid : Fabian Verhoeven Mailto : fabian.verhoeven@cec.eu.int A project sponsored by the European Union, MEDA programme ANIMA