Conference aims to bring together promotion agencies
CAIRO: The Second World Association for Investment Promotion Agencies (Waipa) Regional Investment conference was held Nov. 16-18 in the Sinai resort of Sharm El-Sheikh under the auspices of the General Authority for Investment and Free Zones (Gafi) as well as Waipa.
The aim of the conference was to act as a meeting point for investment promotion agencies (IPAs: organizations whose mandate is to encourage investment in a given region). Amidst the manicured surroundings of the Movenpick golf resort, discussions centered on how regional IPAs could increase foreign direct investment (FDI) specifically through capacity building with an emphasis on South-South investment (investment between emerging economies).
South-South investment is taking larger shares of the market every year. According to all estimates, the future bodes well for a sustained increase of investment between the world’s emerging economies.
Also lauded in the conference was the concept of the One Stop Shop, where the setting up of a business is accomplished at only one authority, instead of meeting the demands of several authorities in different areas.
In attendance at the conference was Minister of Investment Mahmoud Mohieddin, Minister of Tourism Zuheir Garana, Chairman of Gafi Ziad Bahaa El-Din, head of Waipa Kai Hammerich, Governor of South Sinia Mohammed Metwaly and former Trade Minister Ahmed Gewaily.
Bahaa El-Din said, “We wanted to host the Waipa conference for two reasons. Firstly, because we have made significant strides in this field, and secondly, to help us compete on the international level. A positive side effect was also the promotion of Sharm El-Sheikh as a tourist destination for the foreign delegations at the conference.
Head of Waipa Kai Hammerich echoed such sentiments, saying, “Two reasons I’m happy the conference is in Egypt: first because it is an emerging economy, and emerging economies are taking the scene by force; secondly, emerging economies are not only important recipients of FDI but they are also becoming overseas investors.
With emerging economies becoming overseas investors, whether in other emerging economies or in developed ones, interest will be piqued in attracting them as sources of FDI in other economies.
The share of emerging markets in FDI was 15 percent ten years ago according to Hammerich, now it is 36-37 percent. Of the 100 largest corporations in the world, currently only two are from emerging economies. In ten years it is estimated they will number 50.
Hammerich added, “We see a redistribution of economic powers towards emerging economies. This is a trend that will continue in the future. We believe that Egypt is a very good point of reference concerning this trend.
Bahaa El-Din said that Gafi was acting as an IPA for the country and stated, “We are playing the role of informing the government where the problems are. This conference is like a huge workshop for IPAs and Egypt will be the biggest beneficiary. That is the point of the conference.
Last year’s foreign direct investment in Egypt was $6.1 billion, 6.5 percent of gross domestic product (GDP), which was a marked improvement. This year, an increase of 15-20 percent is expected. On a macro level, Egypt has recorded a growth rate of 6.2 percent according to a speech given at the conference by Minister of Investment Mohieddin on behalf of Prime Minister Ahmed Nazif, who failed to attend the conference.
Hammerich added that while Waipa was not a regulatory body in its own right, and as such does not work with standards, the members of Waipa play an important role in such things. He termed what they do as “policy advocacy. IPAs can tell governments what is needed to improve the business climate, and thus help increase investments in the country, Hammerich said.
Hammerich did confirm that the government has taken heed of this. “[They] have listened, and quite a few changes have happened over the years, he said. “The proof is in the pudding; foreign investment inflows have substantially increased.
Waipa is divided into five regions, but a meeting was held at the conference where it was decided that it would be expanded into 10 regions to reflect today’s geographical realities. Therefore, the Africa and Middle East region will be divided into two, with Africa on its own and Northern Africa and the Middle East together comprising a region. Egypt will play an important role in this new region, according to Hammerich.
On the closing day of the conference, an Egyptian initiative was announced by Bahaa El-Din to create a union of Arab authorities to promote investment in the region. This was welcomed by the representatives of the attending Arab authorities subject to a detailed report to be presented by Gafi.
Egypt has been a member of the board of Waipa since 2004, and will remain so until at least 2008. The conference was attended by 34 IPAs, 12 of them from the Arab region. Waipa, created in 1995, is based in Geneva, Switzerland and has over 200 members from 150 countries. This is only its second regional conference to be hosted, the first being held in Korea.