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| INVEST IN THE
MEDITERRANEAN -
SELLING POINTS |
| A pro-business environment |
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| The majority of the MEDA countries have harnessed themselves to the modernisation of infrastructures and public services as well as those of the banking sector, the networks, transport and telecommunications. The tax systems are adapting themselves to a new market economy. All these transformations lead to the emergence of a regional grouping propitious for business. |
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| Photo : A pro-business environment |
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A pro-business environment
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Introduction |
The MEDA countries have accomplished during the past decade a change which remains badly known. The conflicts, action against terrorism, information of a caricatural nature obliterates the reality. The majority of the countries started with large handicaps. Colonisation, then de-colonisation, have left their marks. The systems, either State or feudal have hampered the development of the economy.
However, for the past ten years, the MEDA countries have been introducing policies which, to differing degrees, contribute to the creation of a more open and more dynamic economy. The telecommunications sector is, for example, a locomotive for the opening of the markets. Almost everywhere, mobile telephone licences have been granted by calls for tender to large international operators with real competition. There followed an explosion in telephone communications, the opening-up of whole regions not connected to the network and the very rapid appropriation of new communication tools by very numerous populations, with internet for the most favoured among them.
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A « pro-business » attitude |
If large areas of the economies have remained in the public sector in a large number of countries, the creation of enterprises is today open to anyone in the MEDA region. Take the example of Algeria, that in three years has witnessed the creation of tens of thousands of businesses, often accompanied by the ANSEJ, the National Agency for the Employment of Young People. According to the EIB, Algeria would today boast some 400,000 formal enterprises and 600,000 in the informal or family sector.
The emergence of a new generation of businessmen is a remarkable fact. They are the natural counterparts for the investors. And it is plain to see that the privatisation campaigns have attracted foreign direct investment in Jordan, Morocco, Tunisia and Egypt, for example, with the privatisation of the cement sector in this latter country.
The business environment is changing. The association agreements with the European Union are playing a positive role to make investments safe. Six priority domains have been established in the framework of regional economic cooperation to profit from Euro-Med funds: environment, water, information, energy, transport and industrial cooperation. Economic cooperation should establish networks of technical and innovation centres to enable the diffusion of technological know-how.
Almost everywhere, and this guide is drawing up the picture country by country, the investors have the liberty of purchasing land, creating local companies, repatriating profits. Several countries have introduced systems for tax exemption. A number of countries, including Jordan, the Lebanon, Turkey, Cyprus and Malta, have signed a non-double taxation agreement with France.
Some progress is required in the construction of a State of law favourable for businessmen, with for example, transparent and efficacious procedures for the recovery of debts or arbitration. A Business Charter is under discussion with the MEDA countries and the project ANIMA is studying an Investment Charter, which would offer credible guarantees throughout the region. |
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Country focus |
- In Morocco, the new policy was clearly spelt out in 2001 by the King himself: economic development is the priority. This should be seen by the nomination as prime minister of Driss Jettou, a manager known throughout the business world, who previously occupied the position of Minister of Commerce and Industry. In the same way, it should be noticed that nine new Regional Prefects (Wali) have come from the business world, and not from the Ministry of the Interior as previously.
- In Tunisia, administrative formalities may be increasingly carried out electronically. At the end of 2002 there were 2,444 foreign or mixed enterprises, 89 % of which originated from the EU. It is the manufacturing and the service sectors which are currently the most buoyant.
- In Algeria, the negotiations are very well advanced for accession to the WTO and the signing of an association agreement with the EU took place in April 2002. The opening of the leading sectors of the economy, the modernisation of the fiscal system and customs as well as the progression of the banking sector show the desires of the country to open up to the rest of the world.
- With 68 million inhabitants, Egypt is today the largest market in the Near East. It is a country open to the world and the opportunities of development are numerous here as much in the infrastructure field as in the domains of the environment, energy, - the potential of natural gas is as important here as that of Norway…- and even tourism since paradoxically, Egypt is only the world’s 35th destination.
- It is well known that the preservation of water is a central question for Syria, the Lebanon, Jordan, Israel and the Palestine Authority, as an economic, social and political challenge. Jordan presents currently an important opening as much on the offer as on the demand side in all the fields for the treatment of water.
- In the Lebanon, the five year financial and economic clean up plan, launched at the end of 1998, should bear fruit. The tax rate for company profits is 15 % here, its combination with the privatisation of numerous public services should reposition the country of the Cedars in the role of commercial and economic crossroads it once occupied.
- In Cyprus, the difference in regime between the public law sector and the offshore sector should disappear at the beginning of 2006. Both subjected to the same company law, they differ considerably from a fiscal point of view.
- With 65 million inhabitants, an economic development and society modernisation policy which has been pursued now for the past 20 years, the appearance of a middle class of around 15 million people, Turkey is an enormous potential market with numerous opportunities.
- Despite its reduced size, Malta has developed modern infrastructures, in particular a very high performance system of telecommunications.
- With a GDP of 110 billion Euros, comparable with that of Spain, Israel is a major economy in the region. Investment aids have been established in particular for industrial and tourist investment, research and development and exporting. In the framework of the WTO, rules have been drawn up for preference for IsraeIi products, the sharing of markets, the obligation of sub-contracting and compensation.
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