Brussels, 20/09/2011 (Agence Europe) - Euromed Invest, the major annual event for investors in the Mediterranean, is being held in Alexandria (Egypt) from 20 to 22 September. This year, the context is a singular one, in the wake of the global economic crisis followed by the Arab spring. The result of these crises is that foreign direct investment (FDI) towards Med countries has been at a standstill in recent years but is now showing signs of recovery, as pointed out by Dirk Vantyghem, the director for international relations at Eurochambres. The latter organisation is a member of the MedAlliance consortium (event organiser), which groups the network of investment promotion agencies, ANIMA; that of the Euro-Mediterranean chambers of commerce, ASCAME; the regional employers' association, BUSINESSMED; and various member state and multilateral financing bodies.
In past years, however, projects from Europe have shown remarkable stability, Vantyghem comments, making the observation that the 2008 economic and financial crisis has had an impact and interrupted a phase of growth hitherto continuous. Nonetheless, signs of recovery were beginning to show shortly before the Arab revolutions. Before 2008, the share of the Mediterranean region in global FDI went from around 3% in 2007 to a little under €22 billion in 2009, according to UNCTAD estimates. Also, according to ANIMA, Europe led the way with intentions to invest and to form partnerships in Med countries, and these projects have not waned despite the crisis. After 2010, things were still on the up. Resistance on the part of Med countries was due to the fact that they were less exposed to the upheavals on the financial market and supported by a continually rising demand, the network explains.
This recovery, however, has not been able to continue given the disorganisation of the economies further to the recent political upheavals in many of the region's countries since early 2011. The impact of this is mainly to be felt over the short term, Vantyghem explains, saying that businesses have suffered supply problems and temporary closures, jobs have been lost and a number of investment projects have been refused, so that FDI announcements are in net decline (-25% for the first half of 2011), and predictions of 2011 results are somewhat gloomy.
And yet, things are looking up given that the situation is, in contrast, beginning to stabilise and firm support has been decided especially by the EU and the G8 in Deauville. The World Bank's latest GDP growth forecasts stand at 1.9% in 2011 for the MENA region (Middle East North Africa) and only 1.5% in Tunisia, 1% in Egypt and probably still less in Libya - but a more marked recovery is forecast from 2012 on and 4% growth is expected in 2013, Vantyghem said. (FB/transl.jl)