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The Mediterranean

The Mediterranean. From Barcelona Back to Barcelona Funding from EMP to ENP to UfM. Dr. Alaa Ezz Secretary General CEEBA & FEDCOC. The Tsunami of Funding albeit the Economic Crisis. UfM 1 (2008 – ????) ???????. The Instruments. ENPi (2007 – 2013) for 9 countries

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The Mediterranean

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  1. The Mediterranean From Barcelona Back to Barcelona Funding from EMP to ENP to UfM Dr. Alaa Ezz Secretary General CEEBA & FEDCOC

  2. The Tsunami of Funding albeit the Economic Crisis

  3. UfM 1 (2008 – ????) • ??????? The Instruments • ENPi (2007 – 2013) for 9 countries • EC Grants of € 12 billion • EIB loans of € 8.7 billion and • EIB risk Guarantee of € 1 billion • Neighborhood Investment Fund of €700 + contributions from MS • Governance Facility of €300 million • Neighborhood programmes & accession instruments • NIF Leveraging loan resources from European Development Banks (x 4-5 times) • CBC (including ERDF) € 173 +26.4 million • Spring Fund € 300 million • Meda 2 (2000 – 2006) for 10 countries • EC Grants of € 5.5 billion • EIB loans of € 6.4 billion and • EIB risk Guarantee of € 1 billion • Meda 1 (1995 – 2000) for 12 countries • EC Grants of € 4.6 billion • EIB loans of € 3.4 billion

  4. Origins of ENPI Regulation1638/2006 of 24 Oct, 2006 EC External assistance: Responding to the call for simplification … From 2007 Policy driven instruments: ► Instrument for Pre-Accession Assistance (IPA) ► European Neighborhood and Partnership Instrument (ENPI) ► Development Cooperation Instrument (DCI) ► Economic Cooperation Instrument (ECI) ► Instrument for Nuclear Safety Cooperation (INSC) ► Human Rights Instrument Crisis response instruments: ► Humanitarian Aid Instrument ► Macro-financial Assistance ► Instrument for Stability Before 2007 More than 30 instruments for delivering external relations assistance

  5. ENPI EC financial support MEDA has most of ENPi Previous funding (2000-2006) Present funding (2007-2013) EC budget: ►Total: €8.3bn ►MEDA €5.5bn ►TACIS € 2.3bn ► Thematic Programmes € 0.5 ► Commission proposal: nearly €15bn ►End result: nearly € 12 bn, 45% increase in nominal terms and 32% in real terms ► 11.2 M€ ENPI & 0.8 Thematic programmes and HR instrument Plus € 300 million SPRING FUND

  6. EU financial Support Same for EIB lending EIB lending (2007-2013): ► Overall figures for the new mandate includes very substantial increase for 2007-2013. Ceiling for external lending mandate for ENPI is € 12.4 bn. (Mediterranean: € 8.7 bn / East: € 3.7 bn) ► Closer cooperation with International Financial Institutions (such as EU member states and the G8) is foreseen. Now the EBRD is in SEmed Countries With an initial € 1 billion

  7. EIB funding is more for Private Sector

  8. EIB funding is for SMEs

  9. ENPI And at Last a Regional Element Country and multi-country programmes Minimum 95.0% (over €10.6 bn) Regional & Cross-border cooperation programmes Up to 5.0% (almost €550 million) /enhanced by another 0,5 Bln € from ERDF funding/

  10. Strategy Papers Multi-annual Indicative Programmes ActionProgrammes The ENPI Main features Partnership not Aid ►annual ► describe projects identified for financing ► define the budget per project ►lead to EC decision & commitments of funds ► Analysis of the situation ► Response strategy ►Priority sectors ► 7 years ► revised at mid-term ►normally attached to Strategy Papers ► set global and per priority allocations ► cover 3 – 4 years

  11. ENP New Instruments

  12. Regional Projects for Business • TRANSPORT: Motor Ways of The Sea; Galileo; SafeMed • TRADE & INVESTMENT: InMed Invest; Aghadir; Euromed Quality; EuroMed MARKET; EIB FEMIP; FEMISE; MedADR; MedSTAT II; EU Medis; • ENERGY: MedEnec II; MedEMIP; RCREEE; WAMGM • R&D & TRAINING: Med Ibtekar; TEMPUS III; MedaETE • ENVIRONMENT: Horizon 2020; Meda Water; SMAP III

  13. But what is in it for business ? Besides EIB & EBRD Funding

  14. BUSINESS Direct Benefit Access to TA Institution building Access to Finance Indirect Benefit Reform of Public Admin. Tendering Services Supplies Works Reform of Financ. Sector Business Information Business Opportunities Business Environment

  15. TENDERING All bilateral Services (TA) Transport Sector Support; Water Sector Support; Health Sector Support; Education Sector Support; Textile Sector Support; South Sinai; TVET; RDI; EPAP II; SMAP; NATP II; MWS; Galileo; SafeMed; InMed Invest; EuromedQuality; Aghadir; EuroMed MARKET; EIB FEMIP; FEMISE; Meda water MedADR; MedSTAT II; EU Medis; MedEnec; MedEMIP; RCREEE; WAMGM; Med Ibtekar; TEMPUS III; MedaETE Horizon 2020; Not only in YOUR Country DIRECT BENEFIT / Business Opportunities All Regional All ENP Bilateral All bilateral Supplies All Regional All ENP Bilateral All bilateral Works All Regional All ENP Bilateral

  16. BUSINESS INFORMATION Market Access - Customs Regulations - Legislative Requirements - Investment Incentives DIRECT BENEFIT / Business Opportunities Conformity Assessment Certification Environment and Sustainable Development Environmental Legislation and Standards Research and Development European Commission’s Research and Development Programmes Business Co-operation “Partner Search” inside and outside the European Union

  17. INSTITUTION BUILDING INDIRECT BENEFIT / Business Environment REGULATORY REFORM & REFORM OF PUBLIC ADMINSTRATION REFORM OF FINANCIAL SECTOR Programmes Budget Support Institutional Twinning Prog. in Financial Sector Reform Regional Programmes

  18. The Dream 2010 FTA

  19. 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Algeria Egypt Israel Jordan Lebanon Morocco Palestinian Authority Syria Tunisia Source: Data from European Commission. Notes: orange - no Association Agreement (AA), yellow - gradual liberalisation, green - full liberalisation. And will not Affect the South Now Lags of import-tariff reductions

  20. EU share is Small but not bad Source: Eurostat. Yet the EU is the main trading partner of the Med countries, absorbing around 50% of their exports

  21. Mediterranean regional trade agreements (extra EU) GAFTA US MEFTA AGADIR FTA Pan Euro bilateral b c WTO joined signed signed MED RoO into force with 1 Algeria observer 2002 - - 2 a 1995 1998 2004 2006 - 12 Egypt 3 Israel 1995 - - 2006 1985 4 4 Jordan 2000 1998 2004 2001 3 5 Lebanon observer 1998 - - 6 Morocco 1995 1998 2004 2006 2006 12 7 Palestinian Authority - - - 8 Syria - 1998 - - 12 9 Tunisia 1995 1998 2004 - 12 10 Cyprus 1995 - - - 11 Malta 1995 - - - 12 Turkey 1995 - - - 2,6,8,9 Sources: European Commission, White House, World Bank, WTO. a Since 1998 Egypt is also a member of the Common Market for Eastern and Southern Africa (COMESA). b Greater Arab Free Trade Area. Other members: Bahrain, Iraq, Kuwait, Libya, Oman, Saudi Arabia, Sudan, Qatar, UAE, Yemen. Except ALG GAFTA became effective on 1 January 2005 with a transitional system of rules of origin demanding a 40% ratio of Arab content. c US-Mediterranean Free Trade Area suggested by President Bush in 2003. And is Supported Bilaterally

  22. But how can the South-South Dimension be strengthened • Real Adoption of the Pan-Euro-Med Rules of Origin “RoO” • Harmonisation of laws in economic matters, Invigoration of trade exchanges, promotion of the industrial sector, promotion of economic activities and employment, improvement of productivity and living standards • Co-ordination of sectoral and global economic policies, especially in the fields of foreign trade, agriculture, finance, taxes, services and customs • And most important, more business information and cooperation and establishment of the missing trade routes

  23. NO South-South Dimension for2010 FTA withoutTrade Routes (compare North & South)

  24. And It Worked for Aghadir Trade Between Aghadir & EU (2000-2006)

  25. Likewise it will work for all the Mediterranean

  26. Its time to walk the talk and make every effort to utilize the available funding, means, networks, and cooperation channels;

  27. And Utilize the available Funding • May 2011: Deauville G8 summit: Egypt and Tunisia will receive aid worth more than 28 billion euros • September 2011: The G8 countries and a number of world and regional financial institutions pledged $73 billion in aid to Tunisia, Egypt, Morocco and Jordan • Finance ministers from the G8 pledged $38 billion • IMF promised a further $35 billion as part of the Deauville Partnership

  28. Funding • Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, approved $150 million in financing for investment in consumer foods, manufacturing and financial services, a step toward fulfilling OPIC’s commitment to provide $2 billion of investment support to the MENA region, announced by Secretary of State Hillary Clinton during her March 2012 trip to Egypt. • July 2012, OPIC’s Board approved $500 million to support lending to SMEs in Egypt and Jordan. • July 2012, Egypt repaid US$ 1 billion bonds and US$ 607 million of Paris Club Debt • October 2012, Turkey committed US$ 2 billion loan for Egypt

  29. Funding Gulf Support 17 billion US$ mixed grants and loans • Qatar: 5 billion US$ deposit at CBE” (plus 9 billion US$ immediate investments in Alexandria and Port Said ports) • Kuwait: 3 billion US$ “pledged” (plus a 1 billion LE fund in support of the stock exchange) • Saudi: 4 billion US$

  30. With Funding Eligible for foreign Companies Saudi Support to Egypt • Budget Support Grant: 500 million US$ • SDF Grant for SMEs: 200 million US$ • SDF special loan for dev. projects: 500 million US$ • Interest Free Deposit at Central Bank to support foreign reserve: 1 Billion US$ • Government Interest Free loan: 500 million US$ • Revolving Buying of Egyptian T Bonds: 500 million US$ • Line of Credit for Saudi Exports to Egypt: 750 million US$

  31. The €22 Billion Initiative The Euro-Mediterranean Conference & Exhibition on Donor Funding, Banking and Novel Financial Instruments M E D A F I N A N C E

  32. The Aim To monitor available resources and network with the EC, EU member states and all donors & financial institutions aiming at the support of business through: • Availing the highly needed information about sources of grants, technical assistance, soft loans, and novel financial instruments to their real target…SMEs • Promoting novel financial instruments inclusive Non Banking & Novel Financial Instruments Factoring, Leasing, Mortgage finance, Venture Capital and private equity as the future funding mechanism worldwide. • Strive to Repeat the InfraMed concept that was created by the Egyptian Co-Presidency of the UpM • Giving credit and visibility to the EC and all our development partners

  33. Meda Finance The Initiative • Survey of EC, EIB, EU member states and Multilateral grants, TA, lines of Credit, as well as novel non-Banking Financial Instruments available for the Euro-Med (over $ 22 billion so far), … but we continue • Setting up the mechanism for periodic updating • Conducting "The 1st Euro-Mediterranean Conference & Exhibition on Donor Funding, Banking and Novel Financial Instruments as a networking platform • Sustainability of the initiative and setting up the formula for replication • Follow-up with customized proposals to all donors

  34. Meda Finance The Study CD A total of 113 instruments were sourced, that is besides the aid offered to Governments which is translated into tenders for services and supplies implemented by private sector from the Mediterranean • Over 43 instruments available for the whole region by 18 countries/institutions/programmes of AfDB, Belgium, EC, EIB, Finland, France, Germany, IDB, Japan, Kuwait, Netherlands, Saudi Arabia, South Africa, Spain, UAE, UNDP, UNIDO, USA, and WB/IFC/IBRD; besides what is offered to individual countries from Canada, Denmark, and Italy, .. and naturally the countries themselves. • Over 70 Instruments available for individual countries: Algeria 6; Egypt 35; Israel 4; Jordan 6, Lebanon 5, Morocco 10, Syria 4, Tunis 14

  35. Meda Finance The Study CD • Grants: in cash or as technical assistance up to Euro 1 million (50% to 80% of costs), feasibility studies, export finance, credit guarantee, diagnostics, upgrading, training, export promotion support, …etc • Soft loans: up to 80% of project budget extending from US$ 100,000 up to 100 million, with interest from zero to less than commercial rate, both fixed and floating, both in euro/$ or local currency, with grace periods from 1 up to 8 years and maturity from 5 up to 15 years (sovereign loans are 0.75% interest, grace 10 years, and maturity 40 years)

  36. An Annual Initiative for EuroMed SMEsTo Bridge the Bridges Project with Finance

  37. Egypt Albeit the present situation, it is still The Land of Opportunities Dr. Alaa Ezz Secretary General Federation of Egyptian & European Chambers

  38. Egypt’s Economy Today EIU 2011/2012

  39. It’s the momentum of a decade • Firm Commitment to Peace and Internal Political Stability. • One of the top ten Global Reformers for five years (WB doing business report). • Attractive Investment Climate. • Free Trade Areas.

  40. Attractive Investment Climate • Macro-economic stabilization and comprehensive structural adjustments • Clear transparent incentives • Specific business opportunities

  41. Clear transparent Incentives • Special Incentives for localizing projects. • Lowest Tax in the region (cut by half down to 20%), yet 124% increased revenue. • Lowest customs within the region (4 years ahead of our WTO commitments), yet doubled custom revenue up to L.E. 14.7 billion from only 7.7 five years ago. • Human Resources, R&D and grants • Special Free Zones or Pre-Developed Free Zones. • The Right to Possess and Own Land at very low cost. • No Local Partner Conditions (100% Foreign ownership)

  42. Macro Stabilization & Comprehensive Structural Adjustments • Deregulation, Liberalization and Privatization • Changing Role of the Government (from operator to regulator through PPPs) • Rationalization of Public Expenses & Subsidies • Tax & customs Reforms, • Free Exchange Markets & Stronger Currency • Elimination of Trade Barriers 5 years Top Global Reformer

  43. Macro Stabilization & Comprehensive Structural Adjustments • Simplifying Investment procedures, it now takes less than 72 hours to establish a company instead of 6 month few years ago • Unified investment, Labor, Banking and Telecommunications laws aiming at restructuring the business climate and strategically simplify the legal framework for investment policies. • Issuing modern legislations related to IPR, competition and consumer protection A top Ten Global Reformer

  44. GDP: + 7.2% (in 2008), 4.7% in 2009, 6.1% first half of 2010 Industrial investments increased 5 time in 4 years to reach US$ 30 billion Non oil Exports: Up to 105 billion US$ annually from 44 four years ago Tourism: + 71% in four years up to 11.6 billion US$ annually Suez Canal: +24% in 4 years to 3,1 billion US$ annually Egyptian Workers abroad: +100% to 9.8 billion US$ Natural gas and petrochemicals: Second export train with increased expectation Oil: rising international price CBE Reserve: Exceeding US$ 36 billion dollars where it was only 12 billion just four years ago FDI: +700% in five years to reach 9 billion US$ annually plus 15.6 billion US$ local investments Booming Economyduring 2010 in a world of negative growth

  45. Which will Come Back ECD, Cairo

  46. ECD, Cairo

  47. And the Present Reserve Decline is a Global Issue

  48. Same for the Stock Exchange

  49. Gulf of Suez Funded Mega Projects East Port Said North East Toshki Infrastructure and Services Investment Recapping Stock Exchange Sheikh Zayed Canal “Toushki” Banking & Insurance Takeover of liquidity problem companies Specific Business Opportunities East Oinaat Large domestic market Trade Subcontracting Easy access to regional markets Free Zones Regional Free Trade Areas Egypt The Land of Opportunities Joint Ventures Bilateral Free Trade Agreements 12 PPP Industrial Zones Training Centers Retail 22 New Industrial Cities Retailing

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