OECD Secretary-General’s Statement delivered at Deauville Partnership Finance Minister’s Meeting
Washington, 10 October 2013
The past five years of global economic slowdown and the persisting political uncertainties had a tremendous impact on the economic and social situation and the prospects of the people in the Arab Countries in Transition. In a time of a crisis, we need to scale up resources, but more than ever we need scale up support to the structural and policy reform agenda.
Indeed, looking for new sources of growth and jobs is essential. The priorities identified by the DP Presidencies and supported by the OECD and other institutions, including developing investment, promoting SMEs and supporting women economic participation will be instrumental to reach that goal. And many governments around the table have shown a strong commitment and have embarked on an ambitious reform path.
Promoting trade and investment is even more crucial in a challenging environment which has seen global FDI flows decreasing from USD 1.8 trillion in 2008 to 1.3 trillion in 2012, while inflows to the Deauville Partnership countries have dropped from USD 16.9 billion to less than USD 7.9 billion.
We see many areas of action; notably:
- On Investment: We have worked with the Transition Countries on identifying their key priorities for investment reforms and developed with them their action plans on investment. We see great potential for:
- Boosting regional investment and trade flows [regional trade is estimated to account for less than 10% of total trade in many Arab countries in 2012]
- Further integration of transition countries with international partners, through joining multilateral instruments, such as the OECD Declaration on International Investment and Multilateral Enterprises. [Morocco, Egypt and Tunisia are already among the ten non-OECD signatories of the Declaration and Jordan has recently agreed to follow suit].
- Further improvements in the investment law regimes: several countries in transition are currently reforming their public-private partnership (PPPs) frameworks along the lines of the OECD Principles for Private Sector Participation in Infrastructure.
To address the challenges of high unemployment and foster inclusive growth and social justice we believe SME development and enterprise creation can play a crucial role.
- Today the share of total employment of formal SMEs in Transition countries is much lower than in advanced economies: 5% in Morocco, 7% in Egypt, 14% in Jordan and 10% in Yemen; compared to 50% in the USA and UK, 63% in Germany and 80% in Italy- and enterprise creation in the region is also among the lowest in the world.
- We have been glad to assist countries in identifying their near-term Action Plans on SMEs; we now encourage countries to take stock of progress with the implementation of these action plans, as recently done with Morocco.
- We have also started working with Libya to develop a SME promotion strategy and with Tunisia to develop a youth employment strategy with financial support from the MENA Transition Fund.
The transition period should be considered as a privileged opportunity to mainstream women economic empowerment in the region.
- Women’s access to the labour market and entrepreneurship is crucial to this end, and we are pleased to report that the knowledge gathered in the framework of the MENA OECD Initiative and its Women Business Forum resulted in specific actions in favour of women economic involvement in SMEs. Furthermore, we believe that a legal framework to enhance women’s economic participation would be useful.
Finally: we need to continue the governance reform. Transparency, accountability and openness are condition sine qua non not only for growth, investment and jobs, but also for inclusive societies!
This shows that Transition Countries have engaged in specific and operational policy efforts under the Deauville Partnership and with the support and drive of the Presidency. It is key now that the DP follows up on these action plans and supports their implementation, including through the Transition Fund. This would also show the added value of the Transition Fund, which, when closely linked to the governance efforts of the DP, constitutes a powerful tool for reform.
There is a key opportunity now for the International Community to provide even more effective and sustained support to foster growth, restore trust and thus give citizens the tools to build their future prosperity.