ANIMA

1. The Mediterranean new frontier for investment 3rd ANIMA AnnualConference Rome, 5 October 2004 Bénédict de Saint-Laurent Invest in France Agency ANIMA Réseau Euroméditerranéen d’Agences de Promotion des Investissements Euro-Mediterranean Network of Investment Promotion Agencies

2. A. The Mediterranean challenge GDP per capita 2002, World Bank • The biggest economic divide in the world • Gap of 1 to 10 in GDP per capita between EU and MEDA • Vs. 1 to 7 between USA and Mexico • MEDA’s recovery implies strong Europe’s involvement • Europe’s interest is also to cope with wealthier Southern neighbours • If EU-MEDA integration were at the level of Japan-China link +0,75% direct growth EU-15: 22,689 US$ New members-10 : 5,373 US$ MEDA-10: 2,360 US$ © ANIMA 2004

3. Why EU and world business must look at MEDA • It is an intermediate market • EU-25 + MEDA-12 = 720 m pop. and 8 times China’s GDP! • Incomes per capita similar to Portugal or Greece pre-EU • >240 million population in 2004, 320 million in 2025 • MEDA is the EU new frontier • A formidable development reserve for European growth • Labour cost attractiveness • Numerous co-development opportunities for EU-based companies © ANIMA 2004

4. MEDA in turn vitally needs private investment from EU/world • The job issue • Official MEDA unemployment:12 to 20% (in fact >20%) • Just to keep this rate, need for 40 million jobs in ten years • Implies a high MEDA growth (7%/year), which cannot be only endogenous • A time bomb! • During 2005-2015, EU will lose 10 million workers • EU capital flows may at the same time • Contribute to modernise the MEDA economic and social fabric • Suggest efficient working models for the industry • Inject the money which MEDA States can seldom release • Develop growth in both Europe and the South • Contribute to peace and security © ANIMA 2004

5. EU, N°1 Investor in MEDAHowever EU dedicates only 5% of its outward FDIs to MEDA Source : Alessandrini, 2000 © ANIMA 2004

6. 1997 1998 1999 2000 2001 2002 2003 FDI to MEDA, 1997-2003 (Source: UNCTAD) Israel Turkey Morocco Egypt Algeria Cyprus Tunisia Lebanon Syria Jordan Palestine Malta © ANIMA 2004

7. Recent trends in FDIs to MEDA (MIPO) • 575 projects detected since 1/1/2003 (21 months) • Around €20bn in capital injection (US$ 24 bn) • Almost 38,000 jobs created • Real figures are higher (magnitude of projects only known in 2/3rd of cases) • Promising quality of new investments • Some strategic/ high profile/ high tech projects (R&D etc.) • Projects are coming from 50 different countries • Presence of blue chips and transnational companies • A new wind of optimism • The gap between MEDA and Central/Eastern Europe seems to be closing • MEDA recovery is an on-going process © ANIMA 2004

8. The ANIMA observatory: MIPO • Mediterranean Investment Project Observatory • A data base with all MEDA investments or prospects (realised or publicly announced for a short term implementation) • An on-line data base with access on ANIMA web site • An annual report • An on-going process • No specific bias concerning countries • A micro-economic approah, based on real projects • All MEDA countries are treated the same way (same newsflow) • Possible comparison with other observatories managed by Invest in France (France, Europe, Eastern Europe) © ANIMA 2004

9. Reuters economic newsflow(>10,000 news per day) +Dow Jones, Lexis-Nexis The MIPO process ANIMA team Semantic analysis Selection of 700 to 1,000 news and alerts per year for MEDA Open data baseswww.kompass.fr, www.societes.com, www.lexpansion.com IPAs & other partners Mediterranean Investment Project Observatory (MIPO) Internet Monitoring of companies Around 300 projects and leads detected per year Others sources Fairs Listing © ANIMA 2004

10. The average MEDA investment project • An investment from • Western Europe (France, Spain, UK, Germany) • Or USA • And more and more from the rest of the world (Gulf, Asia…) • Main destinations • Morocco, Turkey, Algeria, Egypt, Israel, Tunisia, Lebanon • Machrek trails behind Maghreb • Five major sectors • Textile, automotive industry, tourism, agrobusiness, energy • + a booming sector: ICT (software, call centres etc.) • Average size per project (known for 2/3rds of projects) • Investment: €94m million • Job creation: 309 jobs • Rather big projects… © ANIMA 2004

11. FDI projects per country of destination Source: MIPO 1/1/2003 to 1/10/2004 © ANIMA 2004

12. Who is investing in MEDA? Project origin • Despite EU and USA concentration, 50 different countries of origin • France is leading (one third of projects, less in terms of FDI amount) • Remarkable US presence (44 projects in 2003, 49 in 2004) • Contribution of investments coming from the Islamic countries (19 projects in 2003, 25 in 2004) • Asia increases its presence (26 projects) • Intra-MEDA investment is growing (20 projects so far) © ANIMA 2004

13. FDI projects to MEDA per origin Source: MIPO EU MEDA Non MEDA Islamic States Others © ANIMA 2004

14. FDI projects in MEDA per sector, 2003-2004 Source: MIPO 1/1/2003 to 1/10/2004 © ANIMA 2004

15. 43 projects announced over €100 million Main sectors: tourism, infra-structure, cars, telecom, energy Top MEDA investments Source: MIPO 1/1/2003 to 1/10/2004 © ANIMA 2004

16. MIPO on www.animaweb.org © ANIMA 2004

17. Assessment of the MEDA situation • In terms of FDIs • MEDA’s recovery is real (back to the US$10bn/year level) • But this is far from satisfactory : the real potential of the region is around US$30-40 bn!!! • Investors’ attitude • MEDA is not on their short list, sometimes not even in their long list • A few exceptions: e. g. car industry in Turkey, energy in Algeria, real estate & services in Lebanon, tourism and ICT in Morocco or Tunisia etc. • We need to boost • The efficiency of the national investment promotion agencies • The global image of MEDA • The willingness of EU/world operators to consider the region © ANIMA 2004

18. B. What is the ANIMA response? • ANIMA= a capacity building&networking EU programme • EU MEDA partnership for investment promotion agencies (IPAs) • Improvement of the FDI attraction capabilities of MEDA countries • Development of FDI flows & new industrial co-operation schemes • Means • Budget of around €6m (2/3 funded by Europe) • Possibility to organise numerous seminars (50 over 3 years), regional studies (18), MEDA participation in fairs (14), study trips in EU (10), technical assistance missions (18), etc. • A set of common tools (economic intelligence, data bases, web) • Mid-term perspective • ANIMA is a facilitator, a catalysor for initiatives • A possible mid-term body (MEDA investment promotion network) © ANIMA 2004

19. Germany:Invest in Bavaria Invest in Denmark Invest in Sweden Italy: ICE & regions Cyprus: Ministry Lebanon: IDAL Syria: SyriaInvest (Ministry of Industry) France : AFII & regional IPAs Israel: Investment Center (Ministry) Spain: IVEX-Valence Jordan: JIB Malta: Malta Enterprise • PalestinianAuthority: PIPA Morocco: DI (Ministry) Algeria: ANDI Tunisia: FIPA Turkey: Treasury (Ministry) Egypt: GAFI Agencies associated to ANIMA © ANIMA 2004

20. ANIMA: a value-added network Increase the operational capabilities of MEDA IPAs Develop the flow of projects and FDI to MEDA © ANIMA 2004

21. Global achievements (1) © ANIMA 2004

22. Global achievements (2) © ANIMA 2004

23. dates & topics Seminars & Forums • 17/9/02 19/9/02 FDI issues in MEDA. ANIMA Launch Conference Paris • 25/11/02 29/11/02 Maximising FDI and IPA strategy Malta • 9/12/02 20/12/02 Communication & territorial marketing Marseille • 12/1/03 16/1/03 Economic intelligence, project identification Cairo • 27/1/03 31/1/03 Prospection network & support to investors Tunis • 22/2/03 24/2/03 MEDA Franchise Forum Barcelona • 24/2/03 28/2/03 Maximising FDI and IPA strategy Rome • 24/1/03 25/1/03 ANIMA Presentation. WAIPA Forum Geneva • 10/3/03 12/3/03 Assises Méditerranéennes de l'International Marseille • 17/3/03 21/3/03 Building IPA strategy and communic. Cyprus • 5/5/03 9/5/03 IPA creation & strategy Rabat • 18/5/03 28/5/03 Visit of EU technoparks and IPAs Nice, Valencia, Munich • 2/6/03 6/6/03 FDI economics & studies Marseille • 2/6/03 4/6/03 World Free Zone Convention Brussels • 21/6/03 25/6/03 Maximising FDI and IPA strategy Alger • 23/6/03 27/6/03 IPA creation & strategy Ankara • 30/6/03 4/7/03 Préparation des offres territoriales Marseille • 8/7/03 10/7/03 A common tool for regional investment cooperation Marseille • 14/7/03 17/7/03 Communication & marketing territorial (in French) Rabat • 15/9/03 19/9/03 The Med IPA seminar for webmasters Marseille • 15/9/03 19/9/03 Venture Capital + SME Conference AgriTech Fair Tel Aviv • 28/9/03 2/10/03 Territorial marketing Cairo • 12/10/03 16/10/03 Country marketing and project identification Amman • 19/10/03 23/10/03 Economic intelligence, communication Ramallah (Palestine) • 19/10/03-23/10/03 MEDA FDI Performance. 2nd ANIMA Conference Marseille • 8/12/03 12/12/03 MEDA-Entrepreneurs Workshop n°1 Marseille • 8/12/03 12/12/03 Intégrales de l’Investissement Rabat • 19/2/04 21/2/04 2nd MEDA Franchise Forum Barcelona • 22/2/04 27/2/04 MEDA-Entrepreneurs Workshop n°2 Istanbul • 08/3/04 12/3/-04 IPA Economists Meeting n°2 Marseille • 15/3/04 19/3/04 IPA webmasters N°2 Ifrane, Morocco • 26/4/04 01/4/04 Visit of Italian IPAs and road shows for investors Marche, Tuscany, Latium • 27/4/04 30/4/04 MEDA-Entrepreneurs Workshop n°3 Marseille • 15/5/04 20/5/04 After-care & MEDA Entrepreneurs Alger • 17/5/04 19/5/04 Building the IPA communications skills Gaza (Palestine) • 26/5/04 28/5/04 IPA managers meeting n°2 + La Baule Investment Forum La Baule • 26/5/04 28/5/04 FDI Statistics Beyrouth • 07/6/04 11/6/04 Investment generation/ Road-show in Spain Valencia, Barcelona • 14/6/04 16/6/04 IPA development and strategy AFII Damascus • 28/6/04 02/7/04 Investor Targeting & Economic intelligence Nicosia, Cyprus © ANIMA 2004

24. Promoting the region: ANIMA guides © ANIMA 2004

25. http://www.animaweb.org • The reference web site on investment in the Mediterranean • 5 headings • About ANIMA • Invest in the Mediterranean • Country opportunities • Business opportunities (sectors) • ANIMA intranet • French & English • 150 pages • +Info on line • 10,000 visits per month © ANIMA 2004

26. Think r e g i o n a l • Importance of intra-MEDA activities in ANIMA • Networking, direct contacts etc. • Regional seminars or events (>10 up until now) • Testimonies and experts from MEDA IPAs • Common workshops on non-competitive projects (MEDA-Entrepreneurs) • Regional presentations in road-shows (Maghreb, Machreq) • Intra-MEDA investment is growing (20 projects in MIPO) • New initiatives envisaged (examples) • Possible MoU on investment between Israel & Palestine • Common work on industrial relocations to MEDA (between CIDEM-Catalunya and MEDA agencies) • Common projects on sectors or sub-regions (promotion, industrial co-operation with EU companies etc.) © ANIMA 2004

27. Search for concrete results • Via micro-projects, e. g. • Franchise sector (Euromed Franchise Forum, Barcelona) • Flow of contacts / leads / projects detected via ANIMA • Via novel initiatives, e. g. • Re-investment by diasporas (MEDA-Entrepreneurs) • Road-shows in Italy, Spain in 2004 (+UK, France, Germany?) • MedIntelligence: technoparks connected throughout MEDA • Project profiler (to detect investors) in www.animaweb.org • Via studies and prospection directed at MEDA niches • E. g. textile, call centers, ICT, cosmetics, organic agriculture, medicalised tourism, thalassotherapy, yachting • Via investment forums and BtoB meetings, e. g. • Euro-Mediterranean Investment Summit (Marseille, 1/2005) • Euromed Venture Capital Forum (Lyon, 5/2005) • Assises Méditerranéennes de l’International (2003 & 2005) etc. © ANIMA 2004

28. ANIMA rationale for franchise • High growth, variety of franchise businesses • Morocco: from 42 franchise networks in 1997 (200 points of sale) to 150 franchise networks in 2003 (700 points of sale) • Egypt: from 7 food networks in 1990 to 34 in 2003 • Job creation • On average, 13 direct jobs and 20 indirect jobs -suppliers etc. • Simple business format • Ideal for emerging entrepreneurs • Partnership, learning • Link franchisor-franchisee • Transfer of knowledge and management methods • Adapted to MEDA’s situation • Most of the risks are taken by the franchisee and not the franchisor • Intégrales de la Franchise launched by DI Morocco Moroccan leaflet on franchise Source: DI © ANIMA 2004

29. Re-investment by diasporas • Several MEDA countries have a large-scale emigration • Huge emigrants’ remittances • 2nd source of external funding in developing countries • MEDA entrepreneurs living abroad encouraged to • Investing back in their home country • Introducing new technologies or management methods • Use of the Marseille “Home Sweet Home” example • Project directed towards young Frenchies installed in the Silicon Valley or London City • MEDA-Entrepreneurs is reproducing the concept in 7 MEDA countries © ANIMA 2004

30. Survey of MEDA incubators, technoparks & R&D centres 250 to date! Creation of a network R&D support to foreign companies locating in MEDA Cluster strategies (‘Call Center Valley’, ‘Textile Valley’…) Multi-country researches (EU PCRD, clinical tests, ICT…) Benefits New (‘hi-tech’) image of MEDA Use of the 000s of engineers and diplomees graduated each year Attraction of R&D-driven foreign investments MedIntelligence © ANIMA 2004

31. ANIMA road showse. g. Barcelona, June 2004 Get projects! © ANIMA 2004

32. Launch of a Euro-Mediterranean Investment Summit • The 1st international forum on investment opportunities in the Euro-Med region • Goal: to create a reference event for the Mediterranean businessmen • Marseille, Palais du Pharo, January 13-14, 2005 • Co-operation with "The Economist" • 2,5 days: conference, 12 workshops, exhibition • Banks, institutions, companies, entrepreneurs, experts • 300 to 500 participantsexpected © ANIMA 2004

33. ANIMA ANIMA’s impact • ANIMA, an accelerator for investment in MEDA • IPAs on the move! • Trust and self-confidence are back • People those who make the difference • Hundreds of executives and staffs trained in MEDA IPAs • Warm co-operation spirit among participants • Bottom-up and regional initiatives are coming • Practical results • Investments on the rise again (cf. MIPO) • More than 10 projects per month directed towards MEDA IPAs • Contacts established with more than 100 major world investors, better aware of the region’s potential • ANIMA active in most major EuroMed investment events However: need for a change of speed / an increased gearing © ANIMA 2004

34. To sum up • What ANIMA has done is probably OK • We have planted the seed, or the small tree… • …But it will take time before it produces fruits • And we also have to nurture this fragile tree… © ANIMA 2004

35. C. Perspectives • Need for an ambitious « Initiative for investment development in the Mediterranean » • Possible objectives 2010 for MEDA-10: • Boosting foreign investment: from 300 to 1,000 projects per year • Tripling of the FDI amount to MEDA: from 10 (average) to 30 billion € per year • Creation of 100,000 directs jobs (vs. 25,000 now) per year and 1 million indirect jobs • This would imply (some proposals) • Continued country reforms (via MEDA investment charter) • The building of a new industrial image for MEDA • The setting-up of a prospection force • The continuation of core ANIMA activities (capacity building / economic intelligence / web site…) • An efficient networking with other bodies, especially business associations, EIB/FEMIP, multilaterals, SME agencies © ANIMA 2004

36. Commitment to reformsThe MEDA Investment Charter • An objective, independent, permanentMEDA scoreboard • With specific indicators on each country • Market, business climate, economic performance • Infrastructure & technology • Governance & transparency … • Based on existing and unquestionable data • Doing Business (World Bank) • World Economic Forum, IMD • Rating agencies, etc. • An instrument showing countries’ commitment towards reforms • Virtuous process of "measurable" improvement • A kind of ANIMA “label” • Considered as a reliable benchmark by investors © ANIMA 2004

37. « Mediterraneans are creative, but unforeseeable and unreliable » Image building • Despite the importance of politics and culture among the MEDA handicaps… • Regional conflicts, security concerns • Lack of regional integration, fragmented markets • Insufficient legal standards & practices • Few democracies • Powerful and sluggish bureaucracies • Low speed of privatisations • Limited domestic savings –weak re-investment in the region • …A lot may be achieved to attract investors • Potential growth is there (cf. Turkey GDP, 1st Quarter 2004) • Stability and investment protection is there • Need to inform about reality, e.g. Algeria, Syria, big markets • Anticipate market integration (Euro-Med free trade zone in 2010/12) • But let’s make it known via efficient channels • People, networks, events, public relations etc. • Specific/targeted campaigns (airports, web, rating agencies, etc.) • Use of opportunities (from tourists to migrants’ summer holidays) © ANIMA 2004

38. ProspectingProject generation • Need for a more agressive FDI search • From passive or demand-driven promotion (web site, image, road-shows etc.)… • …To pro-active prospection of leads and projects • Possible organisation • A prospection network is very costly (range of €4 to 10m/year) • Presence needed in at least 5 EU capitals + US and Asia • Solutions to be considered • Use of consultants paid on success fees? • Mobilisation of diplomatic networks (as business developers) • Use of EU IPA networks at marginal cost • Need to address supra-nationality/subsidiarity/responsability issues • This is the right time for MEDA • Eastern/Central Europe relative decline in 2003-2005 • China over-investment could be favourable to MEDA after 2005 • A window of opportunity? © ANIMA 2004

39. NetworkingBuilding an efficient EuroMed alliance • Develop MEDA ownership • Cf. changes in ANIMA: MEDA secondments, workshops etc. • Need for a high level « piloting system » (Governments) • Federate all driving forces interested in MEDA development • Business, Chambers of Commerce & Industry • Liaise with EIB FEMIP (private sector / SME facilities) • NGOs • Multilaterals (UNCTAD-WAIPA, UNIDO, WB, OECD, etc.) • Other EU IPAs (regional development agencies) • Projects such as UNIMED, EuroMed market etc. • Keep a limited hub/technical secretariat • Flexible, responsive, value-added team • Able to drive an ambitious/decentralised action plan • A network of networks rather than an institution © ANIMA 2004

40. ANIMA Thank you ! Contact us A project sponsored by the European Union, MEDA programme • ANIMA Coordination (French desk) : Bénédict de Saint-Laurent, Invest in France T: + 33 4 96 11 67 62 Mailto : bdsl@afii.fr • Italian desk: Alessio Ponz de Leon et Raffaela Di Emidio, ICE, Italy T: + 39 06 59 92 68 89 Mailto : cooperazione@ice.it • Moroccan desk: Laïla Sbiti, Direction des Investissements, Morocco T: + 212 37 67 35 06 Mailto : lailas@invest-in-morocco.gov.ma • EuropeAid : Fabian VerhoevenMailto : fabian.verhoeven@cec.eu.int © ANIMA 2004