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Iraq Project Introduction (Arabic version)

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Aid for Investment in Infrastructure: Preliminary Findings of Mapping Exercise Improving the business and investment climate in Iraq Klaus Hachmeier Project Working Group Introduction Date:16 February 2015, 10:30h Venue: OECD, Paris 1 1. Overview of the OECD: activities in the MENA region and in Iraq 2 The OECD - Fast facts The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems. It works with governments to understand what drives economic, social and environmental change. The OECD set international standards on a wide range of things, from agriculture and tax to the safety of chemicals. In the area of investment, these include: the Policy Framework for Investment (PFI), the Declaration and Decisions on International Investment and Multinational Enterprises, the Principles of Corporate Governance … Nearly 300 expert committees and working groups with participation of +100 countries Public Affairs and Communications Directorate 3 The MENA-OECD Investment Programme: A forum for policy dialogue and policy reform Leveraging the OECD model of policy dialogue and peer learning: Regional dialogue on investment, SMEs, women entrepreneurs, business integrity Leveraging OECD standards and tools Country projects adapted to specific needs: Supporting investment reforms in Arab transition countries through the Deauville Partnership Business Climate Reviews in selected countries Work in conflict-afflicted areas: Iraq, Libya, Yemen A regional approach, supplemented by country-specific engagement to promote successful policies and good practices in MENA All in all: what is the value-added of the OECD in MENA? The MENA-OECD Investment Programme offers multiple fora for policy development in the region, leveraging the OECD approach of policy dialogue and peer learning. Such fora for dialogue include: Working Groups on Investment, SMEs, corporate governance & business integrity networks, Women’s Business Forum, etc. It offers a variety of well-established standards, tools and practices to the region : Declaration on Investment, Anti-Bribery Convention, etc. Next to regional activities, the OECD conducts country projects, which are adapted to the needs of specific countries. In the framework of the Deauville Partnership, the OECD supports governance and economic reforms in the MENA region. The MENA-OECD Investment Programme supports the Libyan government in developing an SME strategy. In September, a consultative meeting was held with stakeholders from the Libyan government to inform the diagnostic study as part of the SME development strategy project Further work in a conflict-afflicted area is done on the business and investment climate in Iraq, funded by the Swedish International Development Agency, and previously by the US Department of State. A training on investment facilitation will be held in Amman this fall, and early next year the Programme aims to conduct a meeting on developing economic zones in Iraq. However, the OECD’s key engagement in MENA continues to be a regional approach: The OECD sees a regional approach, supplemented by country-specific engagement, as best suited to promote successful policies and good practices in MENA 4 2. The Iraq Project: Background 5 The OECD has worked with Iraq since 2007 A series of meetings and workshops on the legal and institutional investment framework, infrastructure finance, Investment Zones and integrity in public procurement in Iraq between 2007 and 2013. A series of policy insights and recommendations was presented to GoI on 2-3 February 2014 in Baghdad on the following topics: Catalysing investment into Iraq; Public-private partnerships (PPP) and Iraq’s infrastructure development; Improving public procurement to expedite development; Reforming policy to meet the growing demand for housing. Resulted in MENA-OECD Iraq Project 2013-2016 Objective: Improve the business and investment climate through policy dialogue and capacity building for key actors. Project Period: December 2013 – June 2016 Key beneficiaries: National Investment Commission (NIC); KRG Board of Investment (BoI); Provincial Investment Commissions (PIC); the Iraqi private sector; Iraqi governorates Donor: Beneficiary: Implementer: Iraq Project: Improving the business and investment climate The Project has four components: OECD Business Climate and Investment Support Policy Dialogue C4: Integration into regional working groups and activities C3: Working Group on Investment Zones Capacity Building C1: Strengthening the Iraqi investment policy framework C2: Investment promotion diagnostic and development 3. The Iraq Project: Why focus on investment? 9 10 Growth: Creating economic value-added in non-hydrocarbon sectors, economic diversification. Stronger integration into global value chains. Employment and jobs: The oil sector provides for 70% of GDP and 95% of state revenue, but only 1% of employment. Employment needs to be created outside the oil sector. Innovation and technology: Knowledge, skill, technology transfer through FDI. Higher productivity and competitiveness. Long-term effects: Poverty alleviation Conflict resolution Why Iraq needs investment (1/2) 11 Investment needs to rebuild Iraq according to the National Development Plan 2013-2017: Public investment: ID 329 trillion (EUR 242,5 bln.) Private investment: ID 88 trillion (EUR 64,0 bln.) Challenges: Political situation Low oil price, budgetary pressures Investment obstacles (bureaucracy, corruption …) Why Iraq needs investment (2/2) National and Provincial Investment Commissions play a central role in attracting and retaining investments 12 How is the “investment agenda” reflected in the government’s strategies and policies? Goal: An “Investment Strategy” that defines and promotes strategic sectors, projects, and identifies suitable investors Goal: Efficient facilitation process, incl. evaluation and review of investment facilitation process Goal: Ensure that good investment standards and regulations are integrated in Iraqi economic policy, regulation and laws Elements of the investment process: 4. The Iraq Project: Components, past and future Activities 13 Components Strengthening the Iraqi investment policy framework Investment promotion diagnostic and development Working Group on Investment Zones Integration into the MENA-OECD Investment Programme regional working groups and other activities 14 15 Component 1: Activities 2015-16 Analysis of the legal investment framework, incl. planned amendment to the Investment Law 13/2006 and related (commercial et al.) jurisdiction, support process for parliamentary adoption. Workshops/ trainings on Investment policy in the Iraqi context – examining the role of the legal investment framework as part of a comprehensive investment strategy; and selected topics of investment policy (e.g. Bilateral Investment Treaties, Dispute Settlement). Goal: (a) support the development of a sound legal investment regime (to improve predictability for investors), and (b) building an investment strategy to support investment promotion efforts Agenda Strengthening the Iraqi investment policy framework Investment promotion diagnostic and development Working Group on Investment Zones Integration into the MENA-OECD Investment Programme regional working groups and other activities 16 17 Diagnostic Report of Iraq’s Investment Promotion Agencies (February 2015) with following recommendations: Focus on investment marketing and facilitation practices. “Investment Strategy” should focus on (a) marketing selected, “strategic” sectors and projects, and on (b) actively targeting suitable investors. Stronger policy advocacy in line with investors’ demands and needs. Investment Diagnosis: Towards an “Investment Strategy” Component 2: Activities 2015-2016 Establishing operational investor database and investor enquiry and handling system (early 2015) Workshops/ trainings on investment marketing and investor outreach (mid-2015). Developing materials for investor outreach campaign and study visit (“roadshow”) to take place in early 2016. Goal: NIC/PICs market strategic investment projects/ sectors to selected investors, addressing investors’ needs and demands. 18 Agenda Strengthening the Iraqi investment policy framework Investment promotion diagnostic and development Working Group on Investment Zones Integration into the MENA-OECD Investment Programme regional working groups and other activities 19 Supporting the development of investment zones since 2010 The Working Group on Investment Zones in Iraq helps the Iraqi government to develop investment zones to: mitigate risks for investors through a conducive business, legal, and regulatory framework; attract more foreign investment and develop high-growth industries; diversify the economy 20 Previous activities include: Six Working Group meetings were held to discuss policies, tools and good practices to develop investment zones Trainings and workshops were held on e.g. feasibility studies and the Iraqi international investment framework Meeting of the Working Group on Investment Zones in Iraq Component 3: Activities 2015-2016 Two annual meetings : Participants: Representatives from GoI, the international and Iraqi private sector, NGOs, regional and international experts, and civil society organisations Example topics: legal and regulatory framework for economic zones; zone administration; zone financing; land allocation; encouraging women to participate in investment zones; access to infrastructure; cooperation with Iraqi businesses. Goal: (a) Support a co-ordinated investment zone approach, (b) support a feasibility study for a pilot investment zone. 21 Agenda Strengthening the Iraqi investment policy framework Investment promotion diagnostic and development Working Group on Investment Zones Integration into the MENA-OECD Investment Programme regional working groups and other activities 22 Past Activities (2014) The Iraq Project organised participation of Iraqi officials in various regional activities and trainings of the MENA-OECD Programme: May 2014 (Cairo): Working Group on Competitiveness June 2014 (Paris): OECD-MENA Women’s Business Forum June 2014 (Kuwait): Training on Improving Competitiveness at IMF-Middle East Center for Economics and Finance (CEF) September 2014 (Paris): Working Group on SMEs and Entrepreneurship December 2014 (Cairo): OECD-League of Arab States Conference on Fostering Regional Integration on Investment/ Working Group on Investment Policies and Promotion 23 Component 4: Activities 2015-16 Planned activities 2015-16 (preliminary): March 2015 (Kuwait): IMF-CEF Training on PPPs May 2015 (Kuwait): IMF-CEF Training on Competitiveness June 2015 (Dubai): Working Group on SME Policy and Entrepreneurship October 2015 (Kuwait): IMF-CEF Training on SME Finance End 2015: OECD-MENA Women’s Business Forum, Working Group on Investment Goal: Stronger integration of Iraqi stakeholders in regional policy dialogue. 24 The OECD Iraq Project: working in all areas of investment process 25 (Selected) activities of the OECD Iraq Project: C1 C2 C3 C4 Agenda and expected outcomes – Day 1 Contribution of the Project to Iraq’s Economic Policy: What are the priorities of Iraqi economic policy, and how does this reflect on the Project? Session I: Promoting Investment in Iraq: Recommendations for a stronger investment strategy How strengthen the legal investment framework? Possible contribution of OECD? Session II: State-Owned Enterprises and Investment Status of SoE reform in Iraq. How can SoEs be a vehicle for investment? Conclusion Determining future activities of the OECD Iraq Project 26 Agenda and expected outcomes – Day 2 Session 1: Rationales for Special Economic Zones (SEZ) What types of SEZ exist and their role in economic development? What experience have countries made? Session 2: SEZs in Iraq Plans for SEZs in Iraq. How can OECD assist to set up a pilot investment zone? Session 3: Effective and transparent land allocation Land-related issues are the reason for delayed investment projects in over 60% of all cases. What are possible reform steps? Session 4: Outlook for Global Value Chains in Iraq Can and should Iraq integrate into global production processes? Closing and Final Declaration 27 Working Group on Investment Zones in Iraq … Questions …? 28 Backup Slides 29 The MENA-OECD Programme: Investment Pillar 30 Inclusive Growth & Job Creation B. Promoting entrepreneurship & SME development A. Stimulating investment D. Fostering Women’s Economic Empowerment C. Enhancing business integrity and corporate governance Key challenge: FDI to the MENA region decreased by more than 50% between 2008 and 2013. Despite recovery signs, investment flows are insufficient to respond to the urgent need of growth and job creation. Key challenge: Despite progress in education, women’s labour force participation remains the world’s lowest (24%) and women’s unemployment is the highest (18%) – in particular among young women. Key challenge: Enterprise creation rates in MENA are low and private enterprises offer insufficient job opportunities. Key challenge: corporate governance and integrity are solid fundamentals for economic development, social cohension and stability. A vibrant private sector is key to boost growth and raise living standards. However, the potential of the private sector in the MENA region remains unlocked – it cannot create enough jobs and opportunities for people, particularly for young people and women. The MENA-OECD Investment Programme seeks to support the region in building a stronger private sector, by promoting business and investment climate reforms for inclusive growth and job creation. It offers regional fora for policy dialogue, exchange of good practices, and capacity building activities on a regional and country-specific level. Since the Steering Group meeting in 2012, the Programme focuses on 4 areas: Stimulating investment Promoting entrepreneurship & SME development Enhancing business integrity and corporate governance Fostering Women’s Economic Empowerment These four areas are of key importance for the region: Despite its considerable resources and strong growth potential, the MENA region has been impacted by the 2008 global financial crisis and the 2011 political and social transition: FDI inflows decreased by more than 50% between 2008 and 2013 and perceived investor risks remains high. The region also struggles with low enterprise creation rates, high corruption rates, and missing economic opportunities for women and youth. The region features the world’s highest youth unemployment rates - almost 30% - and is in urgent need to create employment opportunities in the private sector. 30 Openness Transparency Participation Trust B. Efficient Machinery of Government A. Open/Clean Governments E. Territorial Development C. Gender Equality D. Rule of Law The MENA-OECD Programme: Governance Pillar 31 OECD-MENA Women’s Business Forum Network of more than 500 women and men from business, government and civil society Connects women entrepreneurs, provides role models and improves access to information Two on-going projects: 32 Increasing women entrepreneurs’ access to business development services Improving women entrepreneurs’ access to bank and non-bank financing Lists women’s business support services across the MENA region Outputs: Last meeting: 6 June 2014 in Paris OECD-MENA Women’s Business Forum, annual meeting in Rabat in December 2013 OECD-IMF Trainings in Kuwait 33 Course Date Improving Competitiveness in the MENA region 1-4 June 2014 Improving Policies and Access to Finance for Small and Medium-sized Enterprises 24-27 November 2014 “Building Capacity and Frameworks to ensure Value for Money from PPPs” 09-12 March 2015 We conduct annual courses at the IMF-Middle East Center for Economics and Finance in Kuwait on: Policies and access to finance for SMEs Competitiveness policies Business integrity Courses are designed for mid to senior-level public officials from the whole MENA region (languages: Arabic and English) The workshops provoke lively exchanges between experts and participants and motivate participants to share best practices and network Past and Upcoming courses Course on Improving Competitiveness in MENA
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