About the MENA Initiative on Governance and Investment for Development

The Initiative on Governance and Investment for Development is a regional effort, initiated and led by countries in the Middle East and North Africa (MENA). It promotes broad reforms to enhance the investment climate, modernise governance structures and operations, strengthen regional and international partnerships, and promote sustainable economic growth throughout the MENA region.

The Initiative will strengthen countries’ capacity to design and implement policy reforms. It will facilitate policy dialogue and sharing of experience on public governance and investment policies among policy makers from MENA countries and their OECD counterparts.

The Initiative consists of two pillars:

• Good Governance for Development (GfD) in the Arab Countries Initiative – aimed at modernising public governance structures and processes.
• Investment Programme – aimed at improving investment climate and policies.

Main features of the Initiative are:

• It is inclusive – the governance programme is supported by a partnership between the OECD and the UNDP, and both programmes are being taken forward in close co-operation with the World Bank, Arab League, European Union and other international and regional organisations.
• It builds upon and leverages existing reform efforts in MENA countries and reinforces the impact of bilateral and multilateral assistance programmes.
• It creates regional networks and enables MENA countries to have access to the policy networks of OECD countries.
  

The MENA region stands at a critical stage in its development. Over the past decades, economic growth in most Arab countries has been below potential. High demographic pressures and growing unemployment rates urge governments to create employment opportunities and establish a favorable environment for private initiative, entrepreneurial freedom and investment.

Improving the investment climate and modernising governance structures and operations are at the core of this challenge. For the countries of the MENA, private investment, both domestic and foreign, is needed to provide new engines of growth and dynamism, and experts from both Arab and OECD countries have repeatedly confirmed linkages between weak public governance and low economic growth.

Responding to requests from MENA countries, OECD and UNDP have worked with the countries of the region to develop an Initiative aimed at improving public governance and mobilising investment. The OECD offers useful experience gained from its other regional programs, such as the South East Europe Investment Compact, in helping countries design and implement comprehensive reform strategies.

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Good Governance for Development

The Good Governance for Development (GfD) Initiative aims at modernising public governance in the Middle East and North Africa (MENA). By improving the environment for entrepreneurs, investors and job creation, it works towards sustainable development of the region.

The Initiative builds upon MENA countries’ ongoing reform efforts to modernise public governance. It

• Strengthens civil servants’ capacity to design, implement and monitor public governance reforms
• Creates a network for dialogue between policy makers from MENA and OECD countries
• Designs innovative solutions, tailored to the specific policy environments of each MENA country
• Assists ministries and government agencies to cooperate and coordinate their work
• Reinforces development initiatives supported by international, regional and bilateral donors

Creating a forum for MENA & OECD policy makers

The Initiative creates a forum for results-oriented policy dialogue, bringing together practitioners from MENA and OECD countries.

Through this innovative partnership, policy makers share their know-how on implementing public governance policies in six priority reform areas.These priority reform areas have been identified by MENA countries. Each is attributed to a Regional Working Group, led by a MENA country and co-chaired by member countries of the OECD.

• Civil Service and Integrity
• E-government and Administrative Simplification
• Governance of Public Finance
• Public Service Delivery, Public-Private Partnerships and Regulatory Reform
• Role of the Judiciary and Enforcement
• Civil Society and the Media

A Steering Group composed of the MENA Chairs and OECD Co-chairs guides and supervises the activities of the Regional Working Groups to ensure a co-ordinated approach with a government wide and non-sectoral perspective.

Setting clear targets and monitoring results

The 3-year implementation process of the Initiative is designed to realise the outcomes of the regional policy dialogue on the national level:

• Best practices and peer reviews by policy practitioners serve to design innovative solutions based on time-tested OECD working methods.
• Clearly defined action targets aim for realistic change. Country-specific measures and application tools build on existing national, bilateral and multilateral reform efforts to ensure effective implementation.
• Pilot projects serve as reference models for other participating countries and link the policy dialogue to actual reforms on the ground. They will be supported with technical and financial assistance by international donors.
• Monitoring tools ensure a timely and results-oriented implementation of the Initiative.
  

The GfD Initiative is supported by a unique partnership between the OECD and the Programme on Governance in the Arab Region (UNDP-POGAR) and funded by voluntary contributions from France, Italy, Japan, Netherlands, South Korea, Spain, Sweden (Swedish International Co-operation Agency, SIDA), Turkey, the US as well as by contributions from Arab countries. In addition, these and further OECD countries provide policy expertise on an ongoing basis. 

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Investment for Development

The key objective of the Investment Programme is to mobilise investment —foreign, regional and domestic— as a driving force for economic growth and employment throughout the Middle East and North Africa region. The Investment Programme supports reform efforts of MENA governments to enhance the investment climate by:

• Strengthening country capacity for designing, implementing and monitoring investment policy reforms
• Creating a network for policy dialogue among investment policy makers from MENA and OECD countries
• Creating a favourable environment for employment creation through financial sector development – towards an entrepreneurship culture
• Improving intra-governmental policy co ordination and co operation between ministries
• Reinforcing the impact of development initiatives supported by international, regional and bilateral funds

Regional Action

The Investment Programme offers a forum for results-oriented policy dialogue among MENA and OECD practitioners. This innovative partnership will serve to share know-how on best practices and lessons learned in implementing investment reforms.

Building on the OECD model of peer review, policy experts will closely work together to design innovative solutions, tailored to the specific policy environments of each MENA country.

The Regional dialogue is structured around five comprehensive investment reform areas which have been identified by MENA countries. Each reform area is implemented by a Regional Working Group, led by a MENA country and co-chaired by a member country of the OECD:

• Transparent and open investment policies (Jordan)
• Encouraging Investment Promotion Agencies and business associations to act as driving forces for economic reform (UAE)
• Providing a tax framework for investment and assessing incentives (Egypt)
• Promoting policies for financial sector and enterprise development in support of diversification (Saudi Arabia)
• Improving corporate governance practices (Lebanon)

Egypt is currently acting as the regional chair of the MENA-OECD Investment Programme.

National Action

MENA countries are elaborating National Investment Reform Agendas under the MENA-OECD Investment Programme. These Reform Agendas include concrete investment policy reform measures aiming at improving the country’s investment environment. They define reform targets in each of the policy areas covered by the Programme. Country Teams are implementing these reforms and participating in the Working Groups.

A number of countries (Morocco, Egypt, Jordan, Yemen, Lebanon, Palestinian National Authority, Oman, and Bahrain) have already completed this process and workshops to discuss their investment reform targets will be held in the coming months.