Arab EF Annual ConferenceArab EF Annual Conference

Weathering the StormWeathering the Storm

Marrakech, MoroccoMarrakech, Morocco

November 13 - 15, 2009November 13 - 15, 2009

Consumer SpendingConsumer Spending Government SpendingGovernment Spending Export DevelopmentExport Development

Create demand and access to disposalCreate demand and access to disposal

incomeincome

Global recession will not affect the Arab Global recession will not affect the Arab

World as predicted.World as predicted.

Resource rich countries maintained Resource rich countries maintained high government spending.high government spending.

Labor abundant countries will have Labor abundant countries will have delay effect due to low remittance, delay effect due to low remittance, reduced FDI and reduced tourists reduced FDI and reduced tourists inflow.inflow.

Countries less globally integrated are Countries less globally integrated are not to be severely affected. not to be severely affected.

GDP growth for year 2008 was 6%GDP growth for year 2008 was 6%

Predicted growth for 2009 is 3.1 % Predicted growth for 2009 is 3.1 % with exception of Abu Dhabi, Oman with exception of Abu Dhabi, Oman and Qatar (over 5%)and Qatar (over 5%)

Saudi Arabia increased government Saudi Arabia increased government spending by 15% Oman 28% Qatar spending by 15% Oman 28% Qatar 25% and Abu Dhabi the same level 25% and Abu Dhabi the same level as 2008as 2008

Kuwait stimulus pack was US$b5.2, Kuwait stimulus pack was US$b5.2, Saudi US$b124.7 and UAE US$b32.7Saudi US$b124.7 and UAE US$b32.7

Morocco, Tunis, Jordan, Lebanon, Morocco, Tunis, Jordan, Lebanon,

Egypt and Syria will suffer delayed Egypt and Syria will suffer delayed effect from the decreased remittance, effect from the decreased remittance, tourism income and FDI as investors tourism income and FDI as investors confidence needs to be restoredconfidence needs to be restored

Total amount of remittance was Total amount of remittance was US$b33.7 in 2008.US$b33.7 in 2008.

Remittance for Morocco was 8%, Remittance for Morocco was 8%, Jordan 14%, Lebanon 20% of GDPJordan 14%, Lebanon 20% of GDP

FDI will decrease by US$b11FDI will decrease by US$b11

Syria will have US$b5 in government Syria will have US$b5 in government

deficitdeficit

Egypt will suffer 35% reduction of Suez Egypt will suffer 35% reduction of Suez canal revenuescanal revenues

The biggiest challenge will be the The biggiest challenge will be the creation of jobs as more people will be creation of jobs as more people will be loosing their jobs while those entering loosing their jobs while those entering the job market will increase the job market will increase

For all the Arab world it is imperative For all the Arab world it is imperative that the conditions conducive to doing that the conditions conducive to doing business are created.business are created.

Gov. influence in economic or business Gov. influence in economic or business decisions (incentives/subsidies, legislation, decisions (incentives/subsidies, legislation, ownership and government expenditure) .ownership and government expenditure) .

Size of the government as net producer and Size of the government as net producer and consumer ( percentage of GDP).consumer ( percentage of GDP).

Number, scale and types of government. Number, scale and types of government. Enterprises. Enterprises.

Taxation.Taxation.

1- Size of Government1- Size of Government

Source: IRF - 2009Source: IRF - 2009

CountryCountry ScoreScore

Lebanon Lebanon 8.68.6

Egypt Egypt 7.27.2

Bahrain Bahrain 6.66.6

Morocco Morocco 6.66.6

Jordan Jordan 6.66.6

OmanOman 5.55.5

KSA KSA 55

AlgeriaAlgeria 4.74.7

2 - 2 - Legal StructureLegal Structure

Impartiality of judiciaryImpartiality of judiciary

IndependenceIndependence

Access to justiceAccess to justice

Efficiency and speed of legal systemEfficiency and speed of legal system

Protection of property rights Protection of property rights

Enforcement of ContractsEnforcement of Contracts

2- Legal Structure2- Legal Structure Source: IRF - 2009Source: IRF - 2009

Country Score

KSA 8.1

Oman 8.0

Kuwait 7.8

Morocco 7.4

Libya 5.8

Syria 5.7

Algeria 5.7

Sudan 4.5

3 - 3 - Access to Sound MoneyAccess to Sound Money

Power, responsibility and independence Power, responsibility and independence of the Central Bank.of the Central Bank.

Inflation rate.Inflation rate.

Access to foreign currencies.Access to foreign currencies.

Local/foreign currency controls.Local/foreign currency controls.

3- Access to Sound Money Source: IRF - 2009Source: IRF - 2009

Country Score

Lebanon 9.3

Oman 9.1

Djibouti 9.1

KSA 9.1

Morocco 6.8

Sudan 6

Libya 5.9

Comoros 4.8

4 – 4 – Freedom to exchange with Freedom to exchange with foreigners foreigners

Taxes on international trade.Taxes on international trade.

Regulatory trade barriers.Regulatory trade barriers.

International capital market controls.International capital market controls.

Access to foreign capitalAccess to foreign capital

Restrictions on foreign capital transactionsRestrictions on foreign capital transactions

4- Freedom to Exchange with foreigners Source: IRF - 2009Source: IRF - 2009

Country Score

Yemen 8.8

Qatar 8.4

Bahrain 8.3

Oman 8.2

Morocco 5.4

Syria 5.4

Tunisia 5.0

5 - 5 - Regulation of credit,labour & Regulation of credit,labour &

businessbusiness

Credit market regulations (banks, extension of Credit market regulations (banks, extension of credit, interest rate controls)credit, interest rate controls)

Labour market regulations (localization of Labour market regulations (localization of labour, impact of minimum wage, hiring and labour, impact of minimum wage, hiring and firing practices)firing practices)

Business regulations (price controls, barriers to Business regulations (price controls, barriers to enter new business, effect of bureaucracy on enter new business, effect of bureaucracy on business efficiency/probusiness efficiency/productivityductivity

Country Score

Bahrain 8.7

Lebanon 7.9

Oman 7.9

KSA 7.9

Morocco 6.5

Egypt 5.8

Mauritania 5.6

Syria 5.5

5 - Regulations of Credit, Labor, & business Source: IRF - 2009Source: IRF - 2009

Summary Ratings Source: IRF - 2009Source: IRF - 2009

Country Score

Bahrain 7.9

Kuwait 7.8

Lebanon 7.8

Oman 7.7

Morocco 6.6

Tunisia 6.4

Mauritania 6.4

Syria 5.8

Algeria 5.7

Thank YouThank You