IFC Investment Climate Advisory Services MENA Rising to the Challenge. Maha Hussein - Sherif Hamdy Beirut, September 2011

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Bernadette Montgomery
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1 IFC Investment Climate Advisory Services MENA Rising to the Challenge Maha Hussein - Sherif Hamdy Beirut, September 2011

2 At the heart of the Arab Spring How can we support growth with social justice? Slide 2

DEMOGRAPHIC CHALLENGE World s highest youth population 60% under 30, around 100 million strong In Egypt alone, around 800,000 new entrants to the labor market each year 20-40% unemployed, world s

3 DEMOGRAPHIC CHALLENGE World s highest youth population 60% under 30, around 100 million strong In Egypt alone, around 800,000 new entrants to the labor market each year 20-40% unemployed, world s highest, and high levels of informal employment Lowest female labor market participation: 25% employed five years after graduation Labor market rigidities, skills mismatch, schools geared toward public sector jobs Highest Youth Unemployment Labor Skills as Major Constraint (%) Note: MENA 6 = Egypt, Jordan, Lebanon, Morocco, Syria, Tunisia Source: IMF REO (Oct. 2010) Slide 3

YOUTH FROM DEMOGRAPHIC CHALLENGE TO OPPORTUNITY Most Significant Challenge Rising cost of living Unemployment Human Rights The Economy Dangers of drugs Gap between Rich

4 YOUTH FROM DEMOGRAPHIC CHALLENGE TO OPPORTUNITY Most Significant Challenge Rising cost of living Unemployment Human Rights The Economy Dangers of drugs Gap between Rich and Poor Opportunities for women Loss of traditional values Corruption Personal debt Quality of education Source: Arab Youth Survey March 2011 Slide 4

5 FROM DOWNWARD SPIRAL Narrow growth and trust gap, inequitable growth Culture of administrative control heavy costs Trust Gap Lack of participation, accountability, transparency Limited Private investment Weak institutions Strong vested interests, limited competition Informality and corruption Unemployment Connected elites have access Institutions of economic governance underfunded Poor left behind Slide 5

6 TO VIRTUOUS CIRCLE Participation, better regulation, formalization, better institutions to enable access, leading to private sector growth Dialogue, Participation, accountability, transparency Smart regulation (not deregulation) Increased investment or formalization Transparency Competition Increased competition, meritocracy Broader tax base Employment Excluded segments gain access Stronger institutions of governance Social impact Slide 6

7 THESE FOUR THEMES DEFINE CRISIS RESPONSE AND MEDIUM-TERM STRATEGY Themes Crisis Response Medium-term Strategy Transparency Dialogue Commercial Justice Competition Insolvency Business Regulatory Reform Employment SME Entry Priority Sectors Competitive Industries Social Impact Social Entrepreneurship Innovation Slide 7

8 IFC ADVISORY BUSINESS LINES Slide 8

9 INVESTMENT CLIMATE CURRENT PORTFOLIO Iraq Construction Permits Morocco Agribusiness Morocco ADR II Tunisia BRR/Tourism/InvProm Lebanon Regulatory Reform / Tourism Tunisia e4e Lebanon ADR WBG Startup Jordan Inspections II Jordan Business Entry Jordan Comp. Industry Afghanistan ADR Afghanistan licensing Algeria PPD Libya? Jordan e4e Jordan Water Pakistan ADR II Egypt ADR Pakistan Sub-national DB Reform MENA Egypt e4e Egypt Logistics Egypt PPD Advocacy Egypt Yemen Tax Yemen Business Entry Yemen IG / Reengagement KM Egypt Startup BRR Industry-Specific Commercial Justice PPD Slide 9

10 SUSTAINABLE BUSINESS ADVISORY CURRENT PORTFOLIO Morocco Corporate Governance Forum Tunis Leb. Green Building ARZ WB&G Olive Oil Cluster Afgh. Business Edge Training Afgh. Horticulture Export Cluster Afghanistan Morocco Lebanon WBG Iraq Jordan Corporate Governance Pakistan Algeria Libya? Egypt MENA ESG Index Pak. Business Edge Training Pak. Waster Paper Recycling Pak. Corporate Governance Egypt Corporate Governance Yemen Regional Projects: Business Edge & SME Toolkit Program (Egypt, Jordan, Lebanon, Qatar, Tunisia) Cleaner Production (Morocco, Tunisia, Egypt, Lebanon, Jordan, Pakistan) Yemen Business Edge Training Yemen Corporate Governance Clean Energy (Morocco, Egypt, Lebanon, Jordan, Pakistan) Corporate Governance (Tunisia, Egypt, Lebanon, WB&G, GCC, Afghanistan) SME Development Program Corporate Governance Program Climate Change Program Slide 10

11 PPP ADVISORY CURRENT PORTFOLIO Morocco Guerdane Irrigation Chtouka desalination Ouarzazate solar Rabat Egypt New Cairo Waste water Alexandria Hospitals Dairut IPP Cairo Saudi Arabia Medina Airport Jeddah/Riyadh Airport Cities Hajj Terminal Syria Al Naseriah IPP KAIA Desalination plant Amman Jeddah Riyadh Sanaa Jordan Queen Alia airport Dubai Aden IPP Yemen Karachi Al Hodaidah IPP and Al Mukalla IPP Pakistan FESCO electricity distribution Lahore Water Green Power (Wind energy) Wheat Silos (Punjab & Sindh) PPP program implementation - PPP Law, PPP Unit Slide 11

12 ACCESS TO FINANCE CURRENT PORTFOLIO CLIENTS Microfinance Institutions Banks Governments (Financial Infrastructure) PRODUCTS - Strategy/ Product Dev. - Risk Management - Housing finance - SME Banking - Women In Business - Housing Finance - Risk Management - Credit Bureaus - Leasing - Secured Lending - Mobile Banking COUNTRIES - Morocco - Egypt - Jordan - Syria - Yemen - Tunisia - Iraq - Lebanon - West Bank - Saudi Arabia - Yemen - Pakistan - Tunisia - Egypt - Jordan - Jordan - Lebanon - West Bank - Yemen - Afghanistan - Morocco - Tunisia - Iraq TEAM FOCUS MSME Access to Finance Slide 12

13 Slide 13

SME Programs Empowering Young Entrepreneurs, Launching High-Impact Enterprises

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