Revive European investments in the Mediterranean After the Awakening ISPI Conference Emmanuel Noutary, General Delegate ANIMA Investment Network Milan, 3 June 2014 www.anima.coop
Mediterranean Investment and Partnership Observatory (ANIMA MIPO) 11 countries monitored 6.500+ FDI recorded 2.000+ Business partnerships Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine, Syria, Tunisia, Turkey Projects announced since 2003 25 qualification criteria: sector, type of company, target and origin country, amounts involved, jobs created, etc. 4 quarterly trend releases 1 annual report Used for country benchmarking, economic monitoring, business prospecting, media analysis and research papers Real time information www.anima.coop/mipo (database) www.medmaps.eu (geographic location) June 2014 ANIMA 2014 2
The FDI recovery is still awaited
FDI announced in the MED region 2003-2013 The region still suffers from the crisis second round effects Flux d'ide A certain resilience in 2011 and 2012 but a drop in number of projects (-30%) A switch of FDI project type in 2013 (larger) to be monitored Oiuiouoiuoiuouo Flux d'ide brut ANIMA (M ) Iouiooiuoiuouoiu Flux d'ide net ANIMA (M ) Nombre de projets 120 000 iuiouoiuoiuoiuoiuouo 786 799 840 900 763 800 100 000 626 671 646 700 80 000 566 600 454 500 60 000 306 64 461 400 40 000 249 52 259 300 20 000 35 490 37 795 34 781 37 411 200 26 413 27 506 29 730 11 660 100 9 900 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Nombre de projets June 2014 ANIMA 2014 4
FDI announced by country 2003-2012 in M source ANIMA-MIPO 18 000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 16 000 14 000 12 000 10 000 8 000 7 094 7 577 6 000 4 000 4 840 5 857 2 000 0 1 519 1 300 751 637 121 34 Algérie Egypte Israël Jordanie Liban Libye Maroc Palestine Syrie Tunisie Turquie June 2014 ANIMA 2014 5
FDI dominated by 5 sectors Investors favoured rent than industry projects Maghreb Machreck Autres MED Energie Banque, assurance Télécommunications, internet BTP, immobilier Ciment, verre, matériaux Tourisme, restauration Logiciels, informatique Agro-alimentaire Chimie, plasturgie, engrais Distribution, commerce Composants électroniques Automobile 19 778 5 492 14 457 17 211 17 791 13 137 6 848 17 624 9 881 5 691 13 075 3 268 9 050 6 811 5 448 33 164 14 612 2 555 1 914 8 687 2 679 4 994 2 960 390 2 235 8 003 471 23 8 989 1 523 627 5 905 24 961 30 156 34 871 June 2014 ANIMA 2014 6
A more cautious approach
A switch of behavious favoured by the crisis Partnerships and JV leave more room for value captation by MED countries 100% 80% 60% 40% 20% 0% 24% 35% 54% 44% 47% 47% 46% 47% 49% 52% 54% 76% 65% 46% 56% 53% 53% 54% 53% 51% 48% 46% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Partial investment (brownfield, JV, partial acquisition, concession) Global investment (greenfield, subsidiary, full acquisition) 1 500 1 000 500 0 519 127 153 206 383 519 108 295 294 37 90 626 763 786 799 840 566 671 646 454 249 306 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Partnership FDI June 2014 ANIMA 2014 8
A problem of spillovers and inclusiveness
The unbalanced territorial development of FDI June 2014 ANIMA 2014 11
A low job efficiency of the sectors providing FDI Top 5 FDI sectors (50% of FDI 2003-2012): Energy, Public Works, Cement, Bank, Tourism Job efficiency ratio by FDI sector in the MED-11 countries Sources: ANIMA MIPO June 2014 ANIMA 2014 12
A necessary renewed view at economic development 2008, 2009, 2010, 2011 WEF ranks Tunisia as the most competitive country in Africa and Maghreb The Global Competitiveness Report 2010-2011, released by the Davos World Economic Forum (WEF) June 2014 ANIMA 2014 13
EU investment is far below its potential
Europe n 2 for the second consecutive year 70 000 Europe = 29% of FDI amounts in 2013 compared to 45% until 2011: lowest year of the last decade Gulf countries take the lead (37% of invested amounts) North America stable = 20% BRICs are volatile = 12,5% in 2013 Intra-MED FDI hardly exist 60 000 50 000 20 157 5 897 40 000 30 000 20 000 10 000 0 3 595 5 739 3 215 3 071 4 769 7 099 14 928 4 992 7 151 5 656 3 940 19 316 8 523 5 989 4 040 5 896 10 945 8 589 2014 3 718 6 749 193 3 835 5 826 6 262 2 497 8 777 11 125 24 940 1 073 1 654 16 296 16 625 18 700 2 009 17 113 13 944 1 843 12 771 10 078 7 127 8 705 4 590 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 USA-Canada Autres pays MED-11 Golfe Europe June 2014 ANIMA 2014 15
EU investors: still numerous but small projects Europe = still 40% of announced FDI in 2012 in number of projects, but the European leadership is faltering Gulf projects are 182m in average (compared to 65m for all project in average, and EU and US projects are 46-48m in average) 400 378 377 391 300 319 339 305 311 294 Europe Golfe 200 100 0 203 201 186 173 151 158 151 150 136 124 123 98 103 138 136 91 81 81 74 76 72 63 47 87 36 63 83 76 61 54 61 52 52 56 39 31 14 18 26 35 21 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 USA-Canada Autres pays MED-11 June 2014 ANIMA 2014 16
but EU FDI projects have more spillovers (1) European FDI projects create more jobs by million invested SME Major Co. Transnational Co. Fund Average Europe 3.5 6.3 1.8 0.4 2.7 MED-11 7.3 2.6 1.7 1.6 2.5 Gulf 0.5 2.4 2.4 0.4 2.1 Other countries 2.6 2.8 1.8 2.2 2.0 USA-Canada 0.8 0.3 1.6 0.3 1.1 Average 2.4 3.1 1.9 0.5 2.2 Number of jobs created by million Euros invested, by region of origin and by type of company (Source: ANIMA-MIPO 2003-2013) June 2014 ANIMA 2014 17
EU FDI projects have more spillovers (2)... and they have a greater contribution to economic diversification: European companies are the top investors in most of the strategic sectors for the MED countries 100% 90% 80% 70% 3% 0% 5% 13% 7% 5% 3% 2% 2% 1% 9% 7% 15% 5% 26% 7% 19% 9% 10% 5% 20% 13% 3% 3% 3% 5% 12% 21% 22% 9% MED-11 Gulf 60% 50% 15% 9% 56% 10% 28% 8% Other countries 40% 79% 30% 57% 59% 65% 57% 58% 58% USA-Canada 20% 33% 43% 10% Europe 0% Aeronautics Agribusiness Automotives Consulting Software Distribution Drugs Mechanics Transport & logistics June 2014 ANIMA 2014 18
EU present the larger potential for partnership 1 600 1 400 1 200 1 000 Enseignes, magasins, franchise Accord de développement 800 600 400 200 0 Partenariat technologique Partenariat commercial Contrat de gestion Bureau de représentation June 2014 ANIMA 2014 19
Actions undertaken to relaunch EU investment from SMEs
Recover trust between EU and the Mediterranean Mobilise political and opinion leaders in the EU The European Union and its member states have to show their commitment to partnering with the Mediterranean at the highest level Head of Chambers & Employers Federation Business networks Diaspora networks Make the EU more visible in the Mediterranean EU investors and businesses EU support policies Actions Intelligence/ information Roadshows Visits from EU leaders to policy makers in the Mediterranean Current initiatives led by ANIMA June 2014 ANIMA 2014 21
Develop a more balanced partnership Involve players from the South with new mindset Clusters, innovation poles, incubators, accelerators Angels, private equity funds Assess the inclusive impact of business and investment Job creation Economic spillovers (sub contracting) Coherence with national/ regional development policies The problem of South South integration Reduce the interest of local markets Limits the negotiation capacities Current initiatives led by ANIMA June 2014 ANIMA 2014 22
Thank you for your attention Emmanuel NOUTARY emmanuel.noutary@anima.coop ANIMA INVESTMENT NETWORK 11b rue Saint Ferréol 13001 Marseille FR T. +33(0) 4 9611 6760 www.anima.coop