OECD, Arab countries to enter new phase of co-operation on investment, governance

29/11/2007 - OECD and Arab countries are to enter a new phase of co-operation on investment and governance policies, following a three-day meeting in Cairo of ministers and senior officials responsible for the OECD-MENA Initiative on Governance and Investment for Development.

Participants agreed to extend the twin-pronged initiative, launched in 2004 in partnership with UNIDO and UNDP, to promote equitable economic development, increased employment, and enhanced prosperity in the countries of the Middle East and North Africa, for a further three years to 2010.

OECD Secretary-General Angel Gurría said the OECD-MENA Initiative represents "a prototype of a new approach to international co-operation". "This is not about providing countries with financial support that will create foreign debt," he said. "It is about providing policy advice that will foster progress. The OECD countries don't have any lessons to give; we have policy experiences to share."

In a speech inaugurating a meeting of ministers responsible for investment policy on November 28th, Egyptian Prime Minister Dr. Ahmed Nazif said the initiative was providing positive benefits to Arab countries in helping them to find their own ways to reform and improve the economic and social performance of their countries. Investment ministers meeting under the chairmanship of Egypt's Minister for Investment, Dr. Mahmoud Mohieldin, agreed a 21-point declaration stating their commitment to move forward with reforms to enhance their business climate and promote private sector development. Among other things, the declaration calls on governments to:

• encourage further liberalisation, regulatory reform and privatisation of state-owned enterprises in accordance with national development objectives;
• seek transparency and predictability in national investment policies, laws, regulations, and administrative practices affecting foreign and domestic investment;
• increase and coordinate efforts for human resource development in the fields of education, vocational training, business skills and management training and promote specific measures to help young people to find work, and
• participate in the Business Climate Devopment Strategy, a new approach developed jointly by OECD and the World Bank to formulate reform priorities, assess the results and step up capacity building.

Reforms are already under way in the region, Mr. Gurría noted, and they have contributed to a steady rise in growth. After increasing by 5.9 per cent in 2004 and 2005, regional GDP grew at a solid 6.2 per cent in 2006, with some economies experiencing double-digit growth. Foreign direct investment inflows to the MENA region have increased more than fourfold in the last three years. Providing further reforms are implemented, and thanks in part to a likely policy of investment diversification on the part of oil and gas exporting countries, Mr. Gurría predicted, the MENA region will continue to be "one of the turbines of globalisation".

On 29 November, ministers responsible for public administration and governance from MENA and OECD countries analysed progress made with national governance reform agendas and acknowledged the Initiative's contribution to governance modernisation. As OECD Secretary-General Angel Gurria noted, "Good Governance is about improving efficiency, transparency, and accountability - three essential elements for building high performing economies and fair societies."

"We are tuned to the same frequency," commented Egypt's Minister of State for Administrative Development, Dr. Ahmed Darwish, referring to the co-operation between OECD and Arab countries. To promote local and foreign investment and to respond to citizens' aspirations, he added, countries in the MENA region need to ensure a corruption-free environment, functioning public services and a trustworthy legislative environment.

Ministers responsible for public sector modernisation agreed on the Initiative's strategic directions and programme of work for 2008 10, as stated in the Chair's conclusions. In its second phase (2008-10), the Initiative will reinforce dialogue and capacity building activities. Among the various initiatives under way, participants welcomed in particular:

• a process of peer learning that has allowed individual countries to learn from the experience of others;
• the establishment of regional knowledge networks, for example to act against corruption and promote integrity and public transparency;
• efforts to improve the capabilities of public officials through courses offered by regional training and expertise centres, and
• a drive to develop public sector data and quality indicators in order to enable effective benchmarking of performance and monitor the impact of reforms.

For further information on the MENA/OECD Good Governance and Investment for Development Initiative, please see www.oecd.org/mena

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• Opening speech of the OECD Secretary-General, 28 November : Making Investment Reforms Succeed
• Opening speech fo the Secretary-General, 29 November: Good Governance Matters