This article is part of a series in which OECD experts and thought leaders — from around the world and all parts of society — address the COVID-19 crisis, discussing and developing solutions now and for the future. Aiming to foster the fruitful exchange of expertise and perspectives across fields to help us rise to this critical challenge, opinions expressed do not necessarily represent the views of the OECD.
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FDI in MENA plunged following COVID-19
The COVID-19 pandemic has caused enormous damage to people’s health, jobs and well-being in the Middle East and North Africa (MENA) region. The crisis has also affected trade and international investment. Global foreign direct investment (FDI) plunged by 50% in the first half of 2020 compared to the second half of 2019, the lowest half-year level since 2013. This negative trend was registered in several MENA economies, including in Tunisia, where FDI flows in 2020 declined by 23% compared to 2019, from USD 823 to USD 643 million. Less FDI means fewer job opportunities and overall weaker growth.
As we look towards the path to recovery, we need to focus not only on attracting more investment, but also quality investment that contributes to more inclusive, fairer, sustainable and resilient growth.
Since the very beginning of the crisis, my government adopted swift measures to support our economy and reassure investors. We did so in close co-operation with the private sector, recognising the extraordinary collaborative efforts required by the circumstances. We partnered with global firms to enhance the production of medical equipment and the use of digital tools to support remote work. We reallocated non-priority infrastructure public investment worth around 3% of GDP towards vital sectors like health and education, and encouraged companies to redirect their production lines toward essential products and services.
Together with these measures, the department in charge of investment set up a co-ordinated COVID-19 Private Sector Crisis Unit to raise awareness of government measures, respond to investors’ concerns and identify solutions in order to secure their activities and exports throughout the tough first period of the pandemic.
But new opportunities are on the horizon
While these immediate measures were necessary to prevent the worst, we know that more needs to be done. For small, emerging economies like Tunisia, attracting more investment—and harnessing its benefits for society at large—is key to recovery. For this to happen, we need to re-think our investment strategies and seize potential new opportunities given by the reconfiguration of global value chains.
Read more on the Forum Network: "Capital markets and corporate governance in post-pandemic MENA" by Obaid Saif Hamad Al Zaabi, Co-Chair, MENA-OECD Working Group on Corporate Governance
Our region is one of strategic importance for the world’s economy. At the crossroads of three continents and global trade routes, we are home to a young population that will grow by 40% to 586 million by 2030, as well as a rapidly growing middle class. Tunisia, as well as other countries in the region, has all the potential and ambition to attract multinational firms that are seeking to shorten their supply chains to produce closer to their primary markets in the aftermath of the pandemic.
These are some of the prime aims of our investment strategy for 2021: fully exploit our competitive advantage in key sectors like agribusiness, pharma industry, automotive and other manufacturing industries and the digital economy; attract investors who want to export their production to European and African markets; improve the integration of our economy into global value chains; and increase intra-regional investment.
Four priorities for a new agenda for investment in MENA
On the occasion of the OECD-MENA Ministerial Conference, I plead to my peers in the region: let us not waste this opportunity. Let us make our own the four key policy priorities identified by the new OECD publication “Middle East and North Africa Investment Policy Perspectives”:
- First, we need to strive to improve our investment legal frameworks towards more transparency and clarity, and fewer cases of discretion and corruption
- Second, we need to advance bolder reforms of the business environment to boost competition and support a dynamic private sector
- Third, we must ensure that investment promotion strategies and sustainable development goals are complementary objectives
- Fourth, we should strengthen our institutional and governance frameworks to deliver better investment policy: a whole-of-government approach, responsive to the needs of the private sector, is of utmost importance to our investment promotion and facilitation efforts
Read more about the Middle East and North Africa Investment Policy Perspectives and see the latest OECD data, recommendations and policy advice on the MENA region
Tunisia and the MENA region will keep working together with the OECD
These are all but easy tasks. Luckily, we can count on the support of the international community, and in particular the OECD. The recently inaugurated OECD Istanbul Centre represents the Organisation’s commitment to engage as closely as ever with the region. As proud Co-Chairs of the MENA-OECD Competitiveness Programme, Tunisia has long contributed to, and benefited from its policy dialogues and regional network, and we welcome the renewal of its mandate for 2021-2025.
We are also actively engaged in the second phase of the “EU-OECD Programme on Investment in the Mediterranean”, which will continue supporting MENA economies improve the environment for business and investment, and strengthen public-private dialogues in key strategic sectors for the recovery.
The impact of this fruitful collaboration is already clear. Tunisia, along with other countries in the region, are increasingly adopting OECD standards as our own. We are full adherents to the OECD Declaration on International Investment and Multinational Enterprises and its Guidelines for Multinational Enterprises, to ensure a level playing field for businesses based on international co-operation and responsible business conduct initiatives.
I would like to congratulate the OECD and all the partners of the MENA-OECD Initiative for the successful organisation of the Ministerial Conference and the Government Business Summit. As Tunisia embarks on its efforts to “build back better”, we look forward to stronger co-operation with the OECD for better policies and better lives.
Find more about the MENA-OECD Ministerial Conference "Designing a Roadmap to Recovery in MENA", taking place on 1 April 2021
|Tackling COVID-19||Trade||Competition||International Co-operation|
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