Facts |
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Globalization is an old phenomenon
as the Gulf Area had since decades
multinational companies as well and
foreigners |
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However
before the 1970s, some Arab
countries followed restrictive
regulatory policies, which were not
very hospitable to foreign
investments. Total FDI in MENA
countries during 1980-1996 was about
0.3 percent of their GDP far below
the average for the developing
countries as a whole |
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The
Arab region as a whole has attracted
less than 1% of equity capital. It
has also attracted a modest amount
of FDI. The trade picture is not
much better, the share of Arab
countries in total exports declined
from 5% in 1985 to 2% in 2000. This
at time, when the share of
developing countries as a whole in
trade rose. Moreover trade remained
heavily concentrated in energy
products |
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In a
number of other MENA countries there
is a significant concern about
frequent regulatory changes and
policy confusion. In most MENA
countries, FDI is governed by
variety of laws and regulations
during 1980s. New laws modifications
of existing ones were enacted to
attract FDI. |
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Now
there is a clear recognition by most
if not all governments in the region
of the importance and urgency of
meeting a challenge that is an
integral part of their growth and
development objectives |
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In
recent years a number of MENA
countries have loosened their
regulatory controls over business
and have managed to attract more FDI
in particular Egypt, Morocco, Oman,
Tunisia and Turkey |
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Most
of the world FDI is allocated to the
advanced economies, North America,
Europe and Japan. Only 3.3% of the
FDI flowing to the Third World
countries is received by the MENA
region, the share of Arab countries
seems in fact much less than the 3%
of flows to developing countries.
The three largest recipients of the
FDI in the Arab region in 1997 are
Morocco, Egypt and Tunisia, the
three countries together received
44.8% of the FDI flows to the MENA
region. |
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Countries in the region must ensure
the maintenance of a strong enabling
economic environment to allow for
high investment in physical and
human resources |
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Close
monitoring of natural and magnitude
of capital inflows and related
impact on macro economy and the
financial market structure is needed |
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For
the process to be sustainable, it
must be supported by strengthened
institutions and information flows.
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In Conclusion |
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Globalization is now unstoppable
process enhanced by technological
change. Its substantive economic
potential must be exploited in the
interest of maintaining high rates
of economic growth, creating
employment opportunities, the Arab
economies face the challenge of
maximizing the benefits of
globalization and minimize the
risks. |
