Brussels, 12/01/2012 (Agence Europe) - The south and east of the Mediterranean are now feeling the after-effect of the “revolutions” and are suffering a substantial fall in foreign investment. Turkey and Israel have not been affected, with the impact less in Morocco and Algeria than in Tunisia. According to MED-Invest, the regional body promoting investment in the region, the first three quarters of 2011 saw a slowdown compared to 2010, which had been characterised by an upward swing in direct foreign investment. Investors remain cautious and are waiting to see whether positive developments will soon follow.
The promise of investment and partnership agreements in the Mediterranean “have fallen by 26% compared to the same period in 2010, with 467 projects identified during the first nine months of 2011, as opposed to 625 in the previous year. The investment also fell sharply, with around €20 billion announced over a nine-month period, as opposed to €40 billion over 2010”. According to the same source, business partnership agreements experienced an even sharper fall, with 233 projects identified during the first quarters of 2011, as opposed to 517 over the whole of 2010 (down 42%).
In Tunisia, the most emblematic country of the ongoing “revolutions”, the number of foreign direct investment (FDI) projects fell by 40% compared to 2010. Tourism has been most affected and is feeling the full repercussions of the ongoing events. Another important country to have experienced these changes is Egypt, where the 2011 balance sheet is likely to be even more gloomy, according to MED-Invest, which states that “the number of FDI projects announced fell by 50%. Several economists have forecast total FDI flows of €2 billion in 2011, half of the figure for 2010”. This situation is scarcely any better in Libya, Syria, Lebanon or Jordan. In Libya, there were almost 75% fewer projects in 2011 than in 2010 and in the Lebanon and Jordan the number of planned investment initiatives fell by half. Algeria and Morocco bucked the trend. The number of FDI projects remained stable in Algeria, whilst in Morocco they rose by 15%. Nonetheless, although investors are not abandoning their FDI projects in Morocco, they are less financially involved than they were in 2009.
Turkey and Israel, however, “are expected to confirm their positions as regional heavyweights in attracting FDI in 2011, with more than a third of announcements of regional investment for Turkey and a nearly a quarter for Israel”. (FB/transl.fl)