FOREWORD

 The rising importance of the Middle East and North Africa (MENA) region in the global economy is increasingly recognised. The region has witnessed a solid economic growth of approximately 5% a year since 2001, comparing positively to the global growth rate over the same period. During the last several years, the region has also become more integrated into the global economy in terms of trade and investment. Foreign direct investment flows to the region more than quadrupled during 2003-2006, from 14 billion USD to over 58 billion USD, and are predicted to continue to rise.

 Equally importantly, the region witnessed a rapid increase of intra-regional investment flows, which are estimated to have amounted to 60 billion USD over 2002-2006. Economic ties connecting MENA countries are strengthening, as the oil-producing countries are investing in countries where capital is more scarce, including Morocco, Tunisia, Egypt and Jordan. These trends, underpinned by increasing liberalisation of foreign direct and portfolio investment, point to the importance of structuring and sequencing investment reforms and their communication to the relevant constituencies. The MENA-OECD Investment Programme provides a useful platform for policy dialogue amongst government and the private sector participants supporting MENA partners in their investment climate reform efforts.

 Since 2005, the Programme has worked with countries in the MENA region to assess the regulatory environment and identify key challenges in investment policy related areas such as taxation, financial sector development, corporate governance and entrepreneurship, including women’s entrepreneurship. The Programme also provides policy advice to MENA governments, leveraging the experience with similar reforms in OECD member countries. The Programme strives to serve as a platform for dialogue amongst MENA and OECD policymakers, and equally, to support the current investment policy reform momentum.

 The key principles encompassed in the first and second Ministerial Declarations were endorsed by MENA countries’ Ministers and participating OECD countries in February 2006 in Jordan and November 2007 in Egypt. These key principles reflect the core elements of ongoing investment policy reforms in the region, including the related activities of the Programme. The Ministerial Declarations, as well as other outputs of the Ministerial Meetings, have been developed by the Steering Group of the Programme, in close consultation with the Business and Industry Advisory Committee to the OECD, the Federation of Arab Businessmen, the Egyptian Businessmen Association, the Arab Business Council, the Union of Mediterranean Confederations of Enterprises as well as other Arab chambers and associations.

 This publication, Making Reforms Succeed: Moving Forward with the MENA Investment Policy Agenda, provides a broad overview of progress between 2005 - 2007 in investment policy reforms in MENA countries. Specific focus is given to reforms in investment policies and promotion, corporate governance, financial-sector development, and tax policies. This volume is topical, particularly given that a number of countries in the region are attempting to reduce the size of their public sectors, shifting the task of employment creation to the private sector.