A driver of economic growth, foreign direct investments (FDI) in the Middle East and North Africa (MENA) peaked in 2006. Weakened by the global financial crisis, Western economies have put a stop to their investments in MENA countries. The democratic transition has, in the process, accelerated the fall of FDI in a context of degraded business climate, legal uncertainty and political instability. FEMISE analyzes the impact on the evolution of foreign direct investment of the political and commercial liberalization process. (FEMISE report FEM41-07).
As a creator of wealth and jobs, foreign direct investment (FDI) enjoyed a boom between 2005 and 2008, particularly in Morocco and Tunisia, with growth rates of 50% and 252% respectively. The foundations of major structuring projects for these two countries were laid, the sovereign state becoming aware of the strategic issue of public-private partnerships (PPP). The launch of the new port of Tangier Med in 2007 illustrates the example of successful PPP and the key role of FDI.
Disparate situations between producing and non-producing countries
According to OECD figures, inflows fell on average by 27% between 2008 and 2009 and by 13% between 2009 and 2010, reaching $ 11 billion in 2010. In 2009, they contracted by 15% in Jordan , 22% in Morocco and 39% in Tunisia. “All countries in the Middle East and North Africa are below their potential in the 2009-2012 period, with the exception of Iraq, Oman, Egypt and Jordan”, notes Femise, in a report coordinated by Juliette Milgram, economist at the University of Granada. The document analyzes both source and destination countries. It highlights significantly different situations for oil-producing countries. “Obviously, the MENA region should not be considered a homogenous block. Oil exporters can attract investments in natural resources (…), “notes the Femise report.