EU policies in support of sustainable growth in the context of Euro- Mediterranean Cooperation ( contribution regarding private sector support) Palermo, 12 June 2014
EU support for sustainable growth 1 Private Sector Communication 2EU support for PSD in Mediterranean countries 3 Blending 2
Purpose and objectives of the New Private Sector Communication adopted in May 2014 Update the EU strategy for private sector development support in developing countries; Identify ways to working closer with the private sector in development cooperation as announced in the 'Agenda for Change', and confirmed in the Busan outcome document; Using the private sector as delivery channel for development in sectors such as energy, agriculture and infrastructure; Propose a framework dialogue and joint action with business to harness the private sector as a driving force in achieving inclusive and sustainable growth; Elaborate on the role of the private sector in the post-2015 framework, and in the transformation towards a green economy. 3
Structure of the Communication 4
Proposed principles for strengthening the role of the private sector in EU development cooperation 5
Actions on PSD and PSE 6
Tools for implementation 7
1 Private Sector Communication EU support for sustainable growth 2EU support for PSD in Mediterranean countries 3 Blending 8
Objectives of the EU involvement in MEDA countries Sustainable growth and employment are common concerns among the partner countries in the Neighbourhood South region, where at least 5 million jobs need to be created yearly to ensure social inclusion. The largest opportunity to create jobs remains in the 6 million micro, small and medium enterprises (msmes) that account for 90% of total employment. This is a daunting prospect and means our common objective and responsibility is to help the private sector to this end. 9
Boosting private investment and job creation requires: improving the business climate, in particular by reducing administrative and bureaucratic procedures; creating a transparent and open investment regime for both domestic and foreign investors; strengthening market institutions and good economic governance; supporting business and investment linkages in the Mediterranean (North-South and South-South) stimulating SME development in innovative and valueadded sectors; upgrading skills in particular for the youth (vocational training); and facilitating access to finance. 10
Geographical distribution of total direct EU support to PSD (contracted, in m) between 2004-2010 11
Support to inclusive growth since 2011 The EU has engaged in the MEDA region since 2011 more than 800 million in grants in support to inclusive growth. Our project interventions, both at bilateral and regional level, are aiming at stimulating employment in key sectors, ensuring upgrading of skills and improving of quality professional training (T-VET) in particular for young people and women, enhancing the efficiency of labour market, reducing the administrative burden of SMEs, capacity building for trade development, support to private sector development and innovation, promoting business linkages and investment, facilitating access to finance for SMEs, etc. 12
Programming exercise for 2014-2017 regional cooperation 1) EU programme 2014-2017 in support to private sector development in Southern Mediterranean: Support the improvement of the business enabling environment for micro, Small and Medium Enterprises; Support the development of quality Euro-Mediterranean networks, business and investment partnerships in particular for micro and SMEs, in a variety of innovative and value-added sectors at regional and/or sub-regional level; Foster entrepreneurial co-operation in the cultural and creative industries and clusters, notably through the promotion of promising pilot initiatives demonstrating contribution to inclusive growth in particular involving the youth. 13
Programming exercise for 2014-2017 regional cooperation 2) EU programme 2014-17 in support to trade development in the Mediterranean : creation of an on-line trade and investment information mechanisms, accessible free of charge, providing information on: product technical standards, NTBT, IPR protection, customs procedures, investment procedures etc). 14
1 Private Sector Communication EU support for sustainable growth 2EU support for PSD in Mediterranean countries 3 Blending 15
Blending of grants and loans (1) The EU bilateral and regional support to sustainable and inclusive growth is complementary to what EU cooperation offers to countries in the region through blending. In particular, the financing of key infrastructure (water, transport, energy and the environment) is an enabler of competitiveness and growth - and has strong employment generation effects. In this regard the EU s Neighbourhood Investment Facility (NIF) has provided since 2011 about 200 million in grant funds that combined with 2.2 billion of loans from European financial institutions, have resulted in total project investment cost or funding for SME facilities in the order of 16 4 billion.
Blending of grants and loans (2) The blending of grants and loans will be further expanded by the EU in its new assistance programming cycle of 2014-20 having regard of its high leverage in mobilising much needed long-term financing into productive projects (x10 leverage). To note also the increase of the mandate of the EU to EIB to invest up to 9.3 Billion in the region through the FEMIP (Facility for the Euro-Mediterranean Investment Partnership). When justified some of the EIB operations are co-financed with grants from Commission in order to absorb development associated risks (e.g. lending to micro-finance institutions, SME start-ups). 17