Published : Wednesday 22 July 2009
The investment needs of countries of the region are immense, with a correspondingly huge number of investment opportunities in the areas of energy, the agro-food industry, water and sewage facilities, transport, logistics telecommunications, research and development, education and health. The Observatoire Méditerranéen de l’Energie (OME) considers, for example, that $US 450 billion are needed to build power generation facilities and transmission networks by 2020. IPEMED, for its part, has put the cost of universal access to potable water and sewage networks at €50 billion by 2015. There are many complementarities within the Greater Mediterranean area, both between countries on the Northern and Southern, Eastern and Western shores as well as between their substantial investment needs and capacities. And yet, investment flows, and particularly those from the private sector, are inadequate. An analysis of the ratio of gross fixed capital formation (both public and private) to GDP reveals a shortfall of investment in the countries of the Southern and Eastern Mediterranean, compared to the average of developing countries and particularly those of East Asia - a little less than 25% in the Middle East and North Africa (MENA) in 2007 compared to nearly 29% in developing countries as a whole and 40% in East Asia and the Pacific (source: World Bank). This underinvestment, particularly from the private sector, is linked to the business climate in the countries of the Southern and Eastern Mediterranean. According to the World Bank’s “Doing Business 2009” report, the MENA region is behind the highincome OECD countries, Eastern Europe, Central Asia, East Asia and Pacific in the business climate rankings.