Governments in the Middle East and North Africa (MENA) are not doing enough to attract foreign investors, compounding the economic problems facing several countries in the wake of the Arab Spring, says a new report from the World Bank Group.
The study found that government-run investment promotion agencies need to do a better job of providing information and assistance to potential investors.
With the region being viewed as risky because of recent political events, attracting foreign investors has taken on greater importance. However, during World Bank Group assessment 16 of the 19 national investment agencies in MENA failed to respond to inquiries from prospective investors.
“Business opportunities are being lost in MENA countries because of the continued dominant presence of the public sector in the economy and a public image worsened by the recent unrest in many countries of the region,” said Pierre Guislain, Director of the World Bank Group’s Investment Climate Department.
“Repairing investor perceptions of risk with effective reforms and good business information is vital. Implementing simple, low-cost, practices to facilitate investment can play a key role in helping economies in the region,” he added.
The report shows that some agencies have done a good job of reaching out to investors despite political instability. The website of Tunisia’s Foreign Investment Promotion Agency was rated among the world’s top 20 websites, and that of Yemen’s General Investment Authority improved dramatically. Several other agencies, including those of Egypt and Morocco, also demonstrated good practices.
The new study is titled Global Investment Promotion Best Practices 2012: Seizing the Potential for Better Investment Facilitation in the MENA Region. It was released during a regional conference in Muscat, Oman co-hosted by Oman’s Public Authority for Investment Promotion and Export Development (PAIPED) and sponsored by the Government of Spain.
“MENA has much to offer and to gain from international companies and collectively, we have most of the skills and knowledge we need to be very competitive investment facilitators,” said H.E. Dr. Salem ben Nassir Al Ismaily, PAIPED Chairman.
The report was produced by the Investment Climate Department of the World Bank Group (which includes IFC, MIGA, and the World Bank) and was sponsored by the Government of Spain.