Invest in the M Editerranean

SURVEY N° 3 / March 2009 Invest in the Mediterranean the in Invest Foreign direct investment towards Med countries in 2008: Facing the crisis

MED-Alliance

Foreign direct investment in the Med countries in 2008 Facing the crisis

Study N°3

March 2009

ANIMA Investment Network

Samir Abdelkrim / Pierre Henry

Foreign direct investment in the Med region in 2008

References

This report was prepared by the ANIMA team within the framework of the Invest in Med contract. ANIMA Investment Network is a multi‐country platform supporting the economic development of the Mediterranean. The network brings together 70 or so Investment Promotion Agencies (IPA), international networks and players involved in the territorial development of the Mediterranean region.

The objective of ANIMA is to contribute to a better investment and business climate and to the growth of capital flows into the Mediterranean region. www.anima.coop

ISBN 978‐2‐915719‐31‐4 EAN 9782915719314

Cover photograph: Fotolia.com Authors

. Pierre Henry, Samir Abdelkrim (in charge of the observatory, the preparation and the writing of this report), assisted by Bénédict de Saint‐ Laurent (editing, global review), Emmanuel Noutary (positioning), Loïc Pendeliau, Xiugui Zhang, Adeline Joanny and Catherine Pettenati for the data collection. All belong to the ANIMA team.

. Warm thanks are extended to the business intelligence team of the French Agency for International Investments (AFII) which assisted ANIMA in the detection of certain projects.

. The various Investment Promotion Agencies (IPA) of the Med region and the French Economic Missions abroad for the supply of certain information.

. Neither ANIMA nor any of the partners involved may be held responsible for data supplied. Any error or lack of precision should be signalled to [email protected]. ANIMA is interested in your comments, complementary information and updates. Many thanks.

Foreign direct investments in the Med region in 2008

Acronyms

. AFII: Invest in France Agency . ANIMA: Euro‐Mediterranean network of players for economic development . EU: European Union (often referred to as EU‐15, or former members, E‐ U10, or new members and EU‐27) . FDI: Foreign Direct Investment . GDP: Gross Domestic Product . GNP: Gross National Product . ICT: Information and Communication Technologies

. IPA: Investment Promotion Agency . Med‐13: Group of 13 neighbour countries of Europe, 9 Mediterranean Partners Countries of the EU (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria, Tunisia), one country observer (Libya), 2 former MEDA countries (Malta and Cyprus) who joined the Union in May 2004, and one country to become a member, Turkey. . Med‐10: the same without Libya, Malta and Cyprus (with Turkey) . MENA: Middle East ‐ North Africa = Med‐10 + Mauritania, Libya, Sudan, countries of the GCC + Yemen, Iran, Iraq, Afghanistan, Pakistan (at times variable geometry) . MIPO: Mediterranean Investment Project Observatory . MPCs: Mediterranean Partners Country of the EU . R&D: Research and Development . SCSC: Software and Computing Services Company . UNCTAD: United Nations Conference on Trade and Development . WIR: World Investment Report (UNCTAD report on world investment)

. WTO: World Trade Organisation

Foreign direct investment in the Med region in 2008 List of contents Preface: crisis, the opportune moment ...... 7 A global contagion ...... 7 FDI… can do better! ...... 8 Positioning: the Mediterranean, an anti‐crisis remedy for Europe . 9 European enterprise seeks low cost growth buffers ...... 9 In the face of recession, the Med region trump cards ...... 10 To make the windfall last, need for public authority support ...... 15 1. Synopsis: investment, 1st victim of the crisis ...... 17 After a record year in 2007, FDI plunges in 2008 ...... 17 Net decline in 2008 ...... 18 Regional dynamics: Turkey takes the lead, Machrek and Maghreb slip .. 21 Maghreb: the hidden costs of the lack of economic integration ...... 21 Machrek: Egypt marks time, Lebanon picks itself up ...... 23 Origin of the FDI flows: Europe takes the lead again...... 25 Investments from the Gulf States: the swansong? ...... 26 Euromed integration continues ...... 27 Profile of foreign investors in the Med region ...... 29 Types of business: preponderance of multinationals ...... 29 Investors from Europe, the Gulf States and North America: sectoral competition and complementarity ...... 29 Methods of installation: grassroots creations and acquisitions of existing assets run 50/50 ...... 30 Sectors: BTP and energy still in the lead, but more modest projects ...... 30 Target investments with strong local spin‐offs ...... 34 Honours list for the largest projects ...... 35 2. Sectoral analysis of FDI in the Med region ...... 37 Sectoral panorama 2008 ...... 37 A pronounced imbalance in the sectoral distribution of projects ...... 38 Sectoral distribution of the stock of FDI 2003‐2008 ...... 39 Jobs creation under the sectoral microscope ...... 39 Focus: 5 key sectors in the face of the crisis ...... 41 Transport and logistics ...... 41

Foreign direct investments in the Med region in 2008

Software services, engineering & other business services ...... 44 Mechanical industries ...... 47 Textile ...... 51 Electronics industry ...... 53 3. Country profiles‐2008 ...... 57 Algeria: new challenges in sight ...... 57 Tunisia: priority to industry ...... 62 Morocco: facing up to the European slowdown ...... 57 Egypt: priority to endogenous growth ...... 64 Libya: rebirth continues ...... 64 Israel: investments in R&D to prepare for the post‐crisis ...... 68 Syria: return to grace ...... 70 Jordan: consolidate strengths ...... 71 Turkey: Europe’s workshop enters a zone of turbulence...... 71 Lebanon: business is picking up ...... 74 Palestinian Authority: no giving in! ...... 77 Cyprus: full steam ahead! ...... 78 Malta: high tech propulsion ...... 79 4. Annexes ...... 80 Annex 1. List of detected projects in 2008 (ANIMA‐MIPO) ...... 80 Annex 2. Direct job creation announced, by sector (ANIMA‐MIPO 2008) 153 Annex 3. Sectoral distribution of FDI projects in 2008 (foreign share in gross budgets as announced & number of projects, ANIMA‐MIPO) ...... 154 Annex 4. Origin‐destination cross table 2003‐08 (foreign share in gross budgets as announced, ANIMA‐MIPO) ...... 155 Annex 5. Methodology ...... 156 Approach ...... 156 Selection criteria ...... 157 Recent methodological changes ...... 158 Sectoral nomenclature ...... 159

Preface: crisis, the opportune moment By Bénédict de Saint Laurent, general delegate of the ANIMA network A global contagion

In 2008, the countries to the South and East of the Mediterranean started to be affected by the world economic and financial crisis, a little later than elsewhere and with a certain attenuation of its effects. The 13 countries which border the Mediterranean and which are monitored by ANIMA (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria, Tunisia, plus Turkey, Libya, Malta and Cyprus) received a little less than 40 billion euros of foreign direct investment (FDI) in 2008 (‐35%), against 61 billion in 2007 and 68 billion in 2006. The number of projects (778 projects) only dropped by 6% ‐ the largest projects (except those in the energy domain) and investments coming from the Gulf States being the most affected.

This is a worldwide situation. According to the first UNCTAD estimations, (the UNCTAD observes the effective flows, whereas ANIMA works on the announcements from companies), the overall drop in FDI was 22% in 2008 and should further accentuate in 2009. Second round effects are possible, with the drop in consumption in developed countries, the reduction in migrant transfers, the drop in crude oil income and more difficult access to credit.

A good number of projects, particularly in the automobile sector, have already been scaled down (for example, the participation of Nissan in the global plant at Tangiers‐Med next to Renault), when they have not purely and simply been cancelled (for example, in the real estate sector, projects coming from the Gulf States).

There remain, however, good reasons for hope. The World Bank forecasts growth of 3.9% in 2009 for the countries of the South and East of the Mediterranean. Certain of the more autarkic countries, such as Algeria, are less exposed to the crisis. Cheaper oil and low inflation will benefit other Med countries. Finally, for European industry, the Mediterranean often appears as a solution, a possible recourse in terms of market, cost control or Foreign direct investment in the Med region in 2008 partnerships. In any event, it is this latter objective that the Invest in Med programme is attacking.

In certain aspects, the crisis also has a salutary effect. In Greek, κρίσις, the crisis, means ‘the opportune moment’. A certain speculative bubble is bursting in the tourism and high‐end real estate sectors. It is now time for the countries concerned to think of ways of attracting more sustainable and more socially useful projects. FDI… can do better!

The South of the Mediterranean largely remains a weak and dominated economic area. Foreign investment has a vital character, because of the lack of productive capital and the need for the transfer of know‐how, but it is often uncontrolled (projects accepted as they are, often gigantic, short term vision, little appropriation). It creates wealth, but is accompanied by limited re‐distribution, with insufficient economic multipliers (local spin‐offs, value chain) and too many polluting projects (real estate, chemicals...). The Mediterranean economic development model is very often of little satisfaction (sub‐contracting, mass tourism, junk plants, brain drain …) and certain ‘new operators’ show little concern for human development…

Too few direct jobs are created by FDI projects (more than 2 million direct jobs in 6 years according to ANIMA‐MIPO estimates, see figure 17 infra, and this figure would seem to be dropping). It perhaps corresponds to 3 or 4 times more indirect jobs, when in reality the need is to create 10 times as many jobs (3 to 4 million jobs a year). It is therefore indispensible to complete FDI (92% emanating from large companies) with projects proposed by SMEs, local and foreign. This involves taking an interest in the creation of a well‐rooted fabric of large, medium and small companies working together, on an often transnational scale. This is the great industrial challenge of the Euro‐Mediterranean region, finding an original mode of economic cooperation which will benefit the two shores of the Mediterranean over time.

Positioning: the Mediterranean, an anti-crisis remedy for Europe By Emmanuel Noutary, director of the Invest in Med programme European enterprise seeks low cost growth buffers

European businesses are depressed. The financial crisis and the anticipated reinforcement of the measures of caution from the banks, promise them fifteen to eighteen difficult months: fewer sources of finance, or greater difficulties in mobilising it and at the same time, an already perceptible shrinking of demand. The European Commission has announced a decline of 1.8% for 2009 over the whole of the European Union (‐1.9% for the Euro area), and a timid recovery (+0.5%) in 2010. And this is taking account of the revival plans implemented by the States themselves.

The effects of the financial crisis and the recession it has provoked are not, however, homogeneous throughout Europe (Figure 1):

. Certain of the countries who recently joined the Union (Romania, Bulgaria, Poland, Slovenia, Slovakia, Czech Republic, Cyprus and Malta) and have been bolstered by structural programmes have not (yet) built their growth on household indebtedness and the support of public authorities. While they will not escape a decline in investment, as a result of the banking crisis, their consumption should to a large extent be maintained and their growth remain positive in 2009.1

. On the contrary, those likely to be most affected are those which have, in recent years, experienced growth more based upon the real estate boom and household indebtedness (Latvia, Estonia, Lithuania, Ireland, Spain, Luxemburg, Hungary and the United Kingdom). Among them, only Estonia, Luxemburg and Hungary should rediscover significantly positive growth in 2010.

. Between the two are to be found the majority of main European suppliers to the Med countries (Germany, Belgium, France, Greece, Italy, Portugal) as well as the northern European countries and Austria.

1 European Commission (Interim Forecast January 2009). Foreign direct investment in the Med region in 2008

All should lose between four and five points in growth between 2008 and 2009, but pick themselves up from 2010. The impact will nevertheless be heavy on investment, as it will on consumption.

Figure 1. Private consumption growth in Europe (in %)

Main suppliers of Med countries 2008 2009 2010 Germany 0.0% 0.8% 0.0% Belgium 0.9% ‐0.4% 0.3% Spain 0.4% ‐2.6% 0.0% France 1.1% 0.1% 0.3% Greece 2.4% 0.7% 0.7% Italy ‐0.4% ‐0.3% 0.7% Portugal 1.4% ‐0.2% 0.1% Euro Zone 0.5% ‐0.1% 0.3% UE 27 1% ‐0.4% 0.4% Source: European Commission (interim forecast, January 2009)

The sectors of consumption which will suffer initially are those segments traditionally considered as less of a priority by consumers: the whole of the tourist and leisure industry, catering, clothing, household equipment, high‐ tech and communication products. More generally, a modification of purchasing behaviour is to be foreseen, with a decrease in the value of the shopping basket and an orientation towards the discounters.

For European businesses, it is a tricky equation. Faced with the decline in demand on their markets, they have to think of finding new outlets. At the same time, the expected drop in profits and the financing difficulties encountered prevents large investments for exports. At the same time, the hunt for low prices further accentuates the pressure on profits, obliges companies to increase competitiveness, and seek cheaper means of production. In the face of recession, the Med region trump cards

In this very special context, the countries South of the Mediterranean present a credible proposal for European businesses: both as solvent growth buffer and competitive production costs, supported by a banking system that has rather been spared from the crisis. In Germany, France, Italy or Spain especially ‐ who each represent up to 30% of the imports of the countries of

Foreign direct investments in the Med region in 2008 the South – the commercial habits may contribute to an opportune relocation of businesses towards the Med countries.

Of course, the Mediterranean countries will not be spared a certain slowdown, accompanied in certain sectors by large job losses. The majority of the sectors subjected to external demand, the foremost of which being automobile sub‐contracting and the textile sector will experience air pockets. Tourism also, very much linked to European demand, is starting to show signs of a loss of steam. But other sectors continue to progress in exports, particularly in the externalisation of support functions (computer services, customer relations management, etc.).

The structural environment of the countries of the region, many of which have today committed to important reforms so that their economies evolve towards a greater opening to private initiative, including foreign (see box), places them in a favourable position today:

. The rules imposed by the States on local banks have prevented them from investing in structured products which mask ‘toxic’ assets. Finally, the reproach made to the south of the Mediterranean financial systems, which of being poorly connected to the rest of the world, has today become an asset. For the Med banking sector is in good health: the percentage of the population with access to banking is growing in all segments of the market, which further distances the effects of the cash crisis. The system therefore has the capacity to promote the development of national and foreign companies. On the condition that it wants to or that is solicited so to do by the public authorities.

. Unlike that of other developing countries in the world, the currencies of the countries South of the Mediterranean are faring well in the face of the Euro. In a year, the currencies of Jordan, Egypt and Lebanon have appreciated by 10% to 13%, the Moroccan dirham by 3% and the Algerian Dinar by 5%. Only in Tunisia can there be observed a slight depreciation of the Dinar, by 4%. The situation is far from the vertiginous slide of local currencies against the Euro observed in Ukraine (‐29%), Romania (– 26%), Poland and Russia (‐20%), Hungary (‐ 17%), India (‐16%) or Brazil (‐13%). Hence, the local opportunities of the Med countries present a solvency that the BRIC countries (China apart) have lost.

Foreign direct investment in the Med region in 2008

. The local markets South of the Mediterranean are developing. In this period, the public authorities in the area are intensifying even more their efforts to create jobs, improve the average income and the level of competence, and raise the living standard of the populations. While a slight slowdown is anticipated in 2009, growth will remain sustained and will take up its cruising speed of nearly 4% per annum on average from 2010 onwards. Private consumption remains dynamic, even in 2009, which makes the region a possible area to absorb the European surpluses which find it hard to locate outlets.

Figure 2. GDP and private consumption growth in a few Med countries GDP Growth (%) Private consumption growth (%) Country 2009 2010 2009 2010 Algeria 2.25% 5.2% 5.3% 5.0% Egypt 3.87% 3.87% 6.3% 5.0% Jordan 3.4% 2.9% 2.7% 2.5% Morocco 2.7% 3.8% 3.2% 4.2% Tunisia 2.84% 3.8% 3.6% 4.3% Source: Economist Intelligence Unit

In consequence, the opportunities which the Med countries offer would appear to be numerous:

. The distribution and logistics sectors today present formidable potential in these countries. Certain operators have already taken their places, the likes of Wal‐Mart or Metro in Egypt, to develop networks of large shopping centres. But the sector is still to be developed throughout the area as a whole. For 10 years, the Med countries have furthermore considerably developed their transport infrastructure networks, whatever the mode considered (+25% for the main airports, +7% for the main ports, +60% for the motorways). Despite that, a qualitative hurdle remains to be cleared for the supply chain operators and the Europeans have interest in grasping this opportunity. Beyond access to an immediate market, the prospect of a revival of world consumption on the 2010‐2011 horizon is an extra argument to take up positions today in an area which witnesses the passage –between Suez and Gibraltar‐ of 25 to 30% of world flows of high added‐value goods (containers, oil).

Foreign direct investments in the Med region in 2008

. The building sector would seem to resist better in the Med countries than in Europe. Despite a few property bubbles which are simply waiting to explode, in Marrakesh for example, and the massive commitment of the Gulf States – which have suffered the full force of the financial crisis ‐ in this sector, many programmes in progress seemed to have been maintained. New players are taking their marks (as have the Chinese for the past 10 years); the needs are so immense, especially in terms of the upgrading of the already existing stocks of accommodation.

. The concentration, in constant progression, of the populations towards the towns and the coast means that everything that affects urban development, public services and the control of energy, is a major stake for the countries of the area, including in terms of economic development.

. The businesses in the South nourish a local demand for B2B services which is progressing strongly. European know‐how (from facility management to marketing, not forgetting temporary employment and consulting) beyond the fact of finding welcome outlets, will contribute to helping the economies of the South clear a qualitative (specialisation of tasks) and quantitative hurdle (productivity).

. In a post‐crisis world economy which will privilege sustainable research and development, the Med countries have the assets to take their place more as a production base for Europe (if the latter wants to reconcile its objectives of reduction of its greenhouse effect emissions and the economic development of its neighbourhood) but also as a laboratory of the future on certain questions of universal interest (notably the management of water).

. Finally, the region produces a large number of engineers and start‐ups in the domain of the new technologies. Mobile telephony is flourishing here and the development of the 3G could enable the region to at last place itself in this sector, beyond the traditional relocations of the customer support centres. E‐commerce is in fact being pushed by the public authorities and given the low level of development of the cable networks, M‐commerce (e‐commerce via mobile telephone), which is slow to develop in Europe could find pioneer markets in the Med countries and competence in terms of application development. Beyond

Foreign direct investment in the Med region in 2008

this niche, a joint development of the logistics sector and the ICTs would enable the area to position itself as the rear base for the large e‐ commerce operators in Europe. Figure 3. Improvement in the business climate in 2008: a contrasted situation An analysis of the economic policies introduced by the governments of the Med countries confirms overall, the determination of the region to make attracting FDI one of the main levers of its development. But while the traditional champions of economic opening continue to stoke the fires of reform (free trade area between Tunisia and the EU, adoption of a law favouring the creation of special new economic areas in Jordan, reforms of the offshore companies in Lebanon, etc.), retreat strategies, whilst isolated, raise their heads again: . This is the case in Algeria which, with the adoption of a new law on FDI, wants to push the foreign groups operating on its soil to re‐invest locally part of the profits made (majority share of 51% reserved for Algerians in investment projects promoted by foreigners, obligation for foreign importing businesses to associate with an Algerian partner, etc.); . In Libya, where foreign businesses fall over each other to lift the large infrastructure contracts, some contradictory signals are sent to the outside world. Hence, while promising to open further the banking sector to private competition (after an initial wave in 2007), Tripoli regularly lets threats of nationalisation of the foreign oil companies present on its territory filter out. . The real surprise comes from Syria, which continues to emit stronger and stronger signs of opening up to investors. Starting with the inauguration in great pomp of the first Stock Exchange in Damascus, in March 2009. Intent on definitively turning the page on the administered economy, Syria adopted its first anti‐trust law in 2008, which reinforces the interests of private operators. Turkey continues to align its legislation on European community law and to liberalise and privatise vital sectors: . In the energy sector and petrochemicals, production and distribution are in the process of liberalisation: in addition to the privatisation of Petkim, the petrochemical giant, several national producers of electricity and gas distribution networks have passed under foreign control, like Polat Enerji 50% acquired by the French EDF; . Several large State monopolies have been sold to the private sector, such as the tobacco and alcohol monopoly. . After several years of prohibition, foreign investors have finally been authorised to purchase land; . In the audiovisual sector, Parliament has authorised foreigners to hold up to 50% of the capital in Turkish private media operations, against only 25% previously.

Foreign direct investments in the Med region in 2008

To make the windfall last, need for public authority support

To benefit from this economic situation, which is favourable to them, the Med countries would have every interest in adopting an offensive attitude. The Invest in Med programme will play its role in backing up regional actions which may be able to be taken to:

. Exploit several sectors for which there exist strong industrial complementarities between the southern shore and the northern shore (from organic agriculture to aeronautics) and develop strategies of selective attraction;

. Incite financial institutions and investors to adopt cautious more flexible rules, so as to favour the development of businesses in their country, as well as foreign operators who wish to invest in it;

. From this day forward, prospect the European businesses who are looking for buffer growth areas and incite them to invest in the South;

. Invest massively in professional training to accompany the sectors which are today suffering and develop local competence to face up to the boom in the sectors of the future, which represent the reservoir of jobs for the years to come.

1. Synopsis: investment, 1st victim of the crisis After a record year in 2007, FDI plunges in 2008

Despite the first signs of the international financial crisis, visible since June 2007, the world flows of direct foreign investment in 2007 reached 1.833 billion American dollars (last complete statistical series), an historical record. The flows aimed at developed economies of course remained largely dominant, but the FDI captured by the developing world had passed the symbolic bar of 500 billion dollars (an increase of 21% compared with 2006). Figure 4. FDI inflows measured by UNCTAD for Med regions and Med share of world FDI (in million USD, UNCTAD‐WIR)

Machreck Turkey + Israel Maghreb Med share of world FDI 50 000 5% 45 000 40 000 4% 35 000 32 027 30 000 3% 25 000 20 000 17 164 2% 15 000

10 000 5 860 1% 5 000 0 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

The Med2 region took full advantage of the global increase in foreign investment observed between 2002 and 2006: in 2006, the Med region at last received a share of world FDI which corresponded to its demographic importance (4%).

From 2007 however, despite the stability of the incoming flows to Egypt and a progression of the FDI aimed at the Maghreb and Turkey, the Med share of world FDI fell below the bar of 4%: the flows of incoming FDI to the Machrek dipped, whereas those in the direction of Israel receded by one third.

2 Med 10 (9 MPCs + Turkey), without Libya Foreign direct investment in the Med region in 2008

Net decline in 2008

In 2008, the crisis profoundly undermined the very founding principles of investment, by plunging businesses into uncertainty:

. UNCTAD, which records the macro‐economic flows registered in the external accounts of the countries, thus estimates the overall drop of FDI in 2008 to be 21% (1.400 billion dollars), and forecasts an even more heavily marked decline in 2009. The flows aimed at developed countries are likely to have declined by 33%! . According to partial national data produced by UNCTAD, the Med3 region should suffer only a small decline in FDI well below the global downward trend (‐9% only), thanks to the good resistance of North Africa and particularly Egypt (10.9 billion dollars in 2008 against 11.6 in 2007). Besides Egypt, the other 2 heavyweights of the regional economy, Turkey and Israel, have been more heavily affected (‐26% in Turkey).

Figure 5. 2001‐08 FDI inflows for each Med countries (million USD) UNCTAD‐WIR for 2001‐2007, estimates for 20084 Region/country 2001 2002 2003 2004 2005 2006 2007 2008 Algeria 1 196 1 065 634 882 1 081 1 795 1 665 7 651 Egypt 510 647 237 2 157 5 376 10 043 11 578 10 900 Israel 3 562 1 651 3 901 2 002 4 881 14 729 9 998 4 708 Jordan 180 122 443 816 1 774 3 219 1 835 2 400 Lebanon 1 451 1 336 2 977 1 993 2 791 2 739 2 845 2 200 Morocco 2 808 481 2 314 895 1 653 2 450 2 577 2 400 Palestine 19 9 18 49 47 19 21 275 Syria 110 115 180 275 500 600 885 1 563 Tunisia 7242 2278 1283 1540 7281 3312 1 618 1 740 Turkey 3 352 1 133 1 751 2 785 10 031 19 989 22 029 16 400 Med 10 20 430 8 837 13 738 13 394 35 415 58 895 55 051 50 315 Libya ‐113 145 143 357 1 038 2 013 2 541 4 501

3 Med 10 (9 MPCs + Turkey), without Libya 4 The 2001‐2007 figures are from data actualised retrospectively, in 2008, by UNCTAD. The figures for 2008 are estimations published at the beginning of 2009 by UNCTAD CNUCED for Egypt, Jordan, Lebanon, Morocco and Turkey, and ANIMA estimations for Israel, Palestine, Syria and Libya (ANIMA‐MIPO annualised flows). The 2008 data for Algeria and Tunisia are estimations provided at the beginning of 2009 by the authorities of these countries (ANDI for Algeria and the Ministry of the Economy for Tunisia).

Foreign direct investments in the Med region in 2008

Country by country, the situation is highly contrasted (see Figure 5): UNCTAD, for example, announces increased flows of FDI into Jordan (+31%), while those recorded by Lebanon are likely to have dropped (‐23%)5!

The ANIMA6 network investment barometer produced using micro‐ economic data (see box: concerning methodology), confirms these trends. The number of projects identified by ANIMA‐MIPO suffers a slight dip in 2008 (–6%), whereas the amounts announced show a sharp drop (Figure 6): . The accumulated gross amounts of projects announced in 2008 declined by 38%, which augurs badly for FDI in the following years; . The annualised flow for 2008 shows a drop of 37%, falling well below the bar of the 40 billion euros, and after the bursting of a sort of speculative bubble, corresponding to the historical curve of the UNCTAD flows. Figure 6. UNCTAD and ANIMA‐MIPO FDI inflows and number of projects for Med 10 (without Libya)

FDI flow, UNCTAD‐ €m FDI planned MIPO, €m FDI/year flow, MIPO, €m Nb. of projects

1000 130 000 131 353 120 000 900

110 000 755 770 800 100 000 722 657 700 90 000 92 674 80 000 600

70 000 68 165 500 61 771 57 421 60 000 56 725 400 50 000 325 38 631 40 000 250 300 47 496 35 547 30 000 40 232 200 14 428 34 386 20 000 11 160 28 466 12 737 100 10 000 9 786 12 145 10 768 0 0 2003 2004 2005 2006 2007 2008

5 MEED, Gulf suffers significant fall in foreign direct investment, Published: 15 February 2009, Will Hadfield 6ANIMA‐MIPO Observatory, created at the beginning of 2003 to complement the European observatory of AFII

Foreign direct investment in the Med region in 2008

In 2007, ANIMA did not see, in the slight consolidation which was measurable at that point, any real turnaround in the trend. The deep causes of the growing infatuation for the Mediterranean observed since 2004 did not in fact seem likely to disappear: petrodollars, commodity boom, real estate, building materials and tourism, rise in sub‐contracting for the European markets, the take‐off of Turkey, awareness of the potential of the Med markets and the renewed interest given to the Euromed space in general.

In 2008, it has to be pointed out that this environment has changed radically: collapse in the price of energy, more limited access to credit (international financing of investment projects and commercial trade), drop in tourist patronage, bursting of the real estate bubble in the Gulf States, prospect of a recession on the developed markets, etc. The reasons for hoping that the considerable flows of FDI in the region would be maintained are hardly in short supply (see the Positioning article in the introduction of this report). Figure 7. Talking of methodology Even if data produced by the Mediterranean Investment Project Observatory (MIPO) of the ANIMA network on the one hand, and by the UNCTAD on the other hand, aim at measuring the same object –foreign direct investment–, their respective methodologies deeply differ: whereas the UNCTAD considers the capital inflows originated in foreign economies in the balance of payment of each country, the MIPO data are based on the compilation of FDI projects announcements detected by ANIMA’s economic intelligence team and its partners.

These FDI projects are registered in the MIPO database whenever their promoters communicate on their launching or validation, even though the projects are likely to be implemented over several years. The ANIMA‐MIPO observatory therefore provides anticipation data, which also differ from UNCTAD data insofar as it does not take into account the source of the invested capital (reinvested earnings, local or foreign banking source, etc.).Only the foreign share in the total project budget is however considered.

The multiplication since 2005 of large‐scale projects totalling billions of dollars forced ANIMA to produce, apart from the ‘total gross budget announced’ data, new statistical series of ‘annualised’ data. By introducing a new factor into the MIPO database (number of years necessary to complete the project according to its promoters), ANIMA became capable of providing good estimates of the amounts effectively invested during the considered year.

The interest of having those 2 types of FDI data, gross and annualised, lies in the possibility to put forward one or the other of the 2 main indications provided by

Foreign direct investments in the Med region in 2008

ANIMA‐MIPO, this advanced indicator of FDI trends: barometer of investment intentions (gross declared amounts of the announced projects), and forecast tool for real FDI flows measured on a given year.

For more details, see the methodological appendix at the end of this report. Regional dynamics: Turkey takes the lead, Machrek and Maghreb slip

According to the ANIMA‐MIPO investment barometer, the Maghreb (196 FDI projects, or 25% of the region in 2008) and the Machrek (282 projects or 36% of the region) are in sharp decline in 2008. Only the group ‘‘Other Med countries’ is progressing; Turkey and Israel carving out the lion’s share, as in previous years, with more than 60% of the FDI amounts between them (and 304 FDI projects in 2008, 197 of which for Turkey alone). According to ANIMA‐ MIPO, Turkey is the only Med country to score points.

The intra‐Med investments projects identified only reach 842 million euros in 2008, in free fall compared with 2007 (5.8 billion euros) and especially 2006 (8.2 billion euros). Figure 8. Evolution of FDI inflows by sub‐region of destination (annualised flows, in million euros, ANIMA‐MIPO 2003‐2008) Destination 2003 2004 2005 2006 2007 2008 Total Machrek 1 861 4 658 11 615 28 558 27 285 7 280 81 256 Maghreb 6 013 7 251 7 381 11 821 15 830 8 018 56 315 Other Med 1 937 871 20 474 28 608 18 261 24 693 94 844 Total 9 810 12 780 39 471 68 987 61 376 39 991 232 415

Maghreb: the hidden costs of the lack of economic integration

In their concomitant drop, the Maghreb countries came out a little less badly than the Machrek in 2008 and attracted 8 billion euros in 2008, against 7.3 billion for the Machrek. The Maghreb attracted numerous projects, mainly European, in energy (53 projects, representing 2.7 billion euros), Building, Public Works ‐ Tourism (67 projects worth 2.5 billion euros) and Banking‐Insurance (23 projects for 1.2 billion euros). The smoothed amounts of these FDI announced in 2008 are in sharp decline (‐48.7% compared with 2007).

Foreign direct investment in the Med region in 2008

Figure 9. The cost of the non‐Maghreb (…) Whereas borders are opening everywhere and regional trade is developing, North Africa is an exception. A situation denounced by the Secretary General of the UMA (Arab Maghreb Union) himself in January 2008: estimating inter‐Maghreb commercial trade at 3.36 % of the total trade of the area, Habib Ben Yahia invited members to compare these figures with the 21 % of Asean, the 19 % of Mercosur and the 10.7 % of the CEDEAO. For its part, the World Bank estimated in 2006 that full economic integration of the sub‐region would provide an important rise in the GDP of each of the countries, of 24 %, 27 % and 34 %, respectively for Tunisia, Morocco and Algeria, between 2005 and 2015. On the contrary, the missed occasions for union are very costly. The experts and the institutions denounce ‘the cost of the non‐Maghreb’. As concerns the Moroccan Minister of the Economy and Finance, Salaheddine Mezouar, who in December last, based on a study completed by his department of Studies and Financial Forecasts (DEPF) in October 2008, estimated the lost ground at 2.1 billion dollars per annum (980 million excluding hydrocarbons) in terms of commercial trade. Even more pessimistic, Habib Ben Yahia estimates the blockage of the integration process costs 2% of the annual growth rate of each country (…). From ʹMaghreb: les milliards perdus de la désunion‘ by Faïza Ghozali, Jeune Afrique, 17/02/2009 Considered as a whole, the Maghreb stands out for the reinforcement of its port infrastructures (new container terminals managed by Maersk and PSA at Tangiers‐Med, DP World which obtained the management of the ports of Algiers and Jijel, the development of the deep water port of Enfidha). Morocco’s share dropped sharply in 2008, with only 95 FDI projects detected by the MIPO observatory, against 149 in 2007. The Kingdom remains attractive in tourism, banking and energy. In Algeria, it is difficult to say which of the crisis or the new regulations affecting foreign direct investment (dating, it is true from the 2nd part of the year) is to blame for the decline in European FDI in 2008 (‐ 50% compared with 2007, as much in amounts announced as number of projects). The investors from the Gulf States nevertheless continue to move their pawns forward in the Bay of Algiers, notably with the Emirates International Investment Company and its real estate project ‘Dounya Parc’. Tunisia fares better, with 2.3 billion dollars of FDI in 2008 (+57%) according to FIPA, and 100 FDI projects detected by ANIMA‐MIPO. Industry‐wise, the order books of the Tunisian sub‐contractors have been well filled in 2008 (11 projects for aeronautics and automobiles).

Foreign direct investments in the Med region in 2008

Figure 10. Main FDI emitting regions towards Maghreb since 2003 (in % of annualised declared amounts, ANIMA‐MIPO 2003‐08) Asia‐Oceania MED‐10 3% 11%

EU‐27 + EFTA USA/Canada 46% 11%

Gulf & other MENA 29%

Machrek: Egypt marks time, Lebanon picks itself up

The cold shower which fell on the stock exchanges and the economies of the Gulf States, led by Dubai, was felt in Cairo, Amman and Damascus. The Machrek region only attracted 7.3 billion euros of FDI announced in 2008 (18.2% of total smoothed flows), against 27 billion in 2007 (44.4%) and 28.5 billion in 2006 (41%). Figure 11. Main FDI emitting regions towards Machrek since 2003 (in % of annualised declared amounts, ANIMA‐MIPO 2003‐08)

Asia‐Oceania 7% UE‐27 + EFTA MED‐10 26% 6% USA/Canada 6%

Gulf & other MENA 55%

According to ANIMA‐MIPO, Egypt, privileged hunting ground of a number of promoters from the Gulf States (Emaar, Qatari Diar, Damac), only attracted 4.5 billion euros of foreign Direct Investment in 2008, after having

Foreign direct investment in the Med region in 2008 passed the bar of 22 billion euros in 2007. Twenty two FDI projects went to Energy (above all natural gas, with for example the Italian Edison at Aboukir), and 13 to Financial Services (a good number of acquisitions by the Kuwaitis). Jordan resisted as well as it could with 37 projects (against 53 projects detected in 2007), especially in Construction and Infrastructure (extension of the port of Aqaba for 5 billion dollars, high rise office blocks in the centre of Amman, a great deal of logistics). Syria managed to attract 38 FDI projects by continuing to liberalise its economy following the model of its Lebanese neighbour (opening of a stock exchange at Damascus, in‐depth reform of the business environment). In the face of the exhaustion of its oil reserves, Syria is doing all it can to become an important tourist destination in the Near East (6 FDI projects detected in tourism in 2008). The effectiveness of the Lebanese banking system has revived the confidence of foreign investors, who contribute to a large extent to the renewal of Beirut (the Phoenicia Village and Al Saifi Crown projects, and also Plus Towers, a twin tower project). Israel, Turkey: invest in the future With 3.2 billion euros, Israel continues to capitalise on its capacities of innovation to attract new foreign investments: software and internet (28 projects), medicines (6 projects), as well as biotechnologies (348 million euros of FDI). The consequences of the global crisis for many industries may cast doubts on several FDI projects attracted by Turkey in 2008 (195 projects detected in 2008, that is 25% of the total for the Med region), in particular in the automobile sector. But the country is preparing for the future by opening vast areas of its economy to private initiative and foreign investment, in particular in the production and distribution energy. The stakes for Ankara will be to maintain the productivity of the industrial tool to remain competitive on the international markets and go through the crisis in a position of strength.

Foreign direct investments in the Med region in 2008

Figure 12. Individual FDI data for Med 13 according to ANIMA‐MIPO Flow Flow Flow Average FDI / Destination Pop. 2008 2006 2007 2008 3 years capita / yr Israel 13 850 4 035 3 253 7 046 6 426 679 1 096 € Malta 296 46 305 216 401 880 536 € Cyprus 152 32 1 081 421 788 457 534 € Libya 374 4 574 3 059 2 669 6 036 914 442 € Lebanon 4 425 279 270 1 658 3 921 278 423 € Jordan 3 235 2 765 1 209 2 403 6 053 193 397 € Tunisia 3 887 3 329 1 490 2 902 10 276 158 282 € Turkey 14 310 14 148 20 055 16 171 71 158 647 227 € Egypt 15 935 22 204 4 551 14 230 80 264 543 177 € Syria 4 674 2 029 1 062 2 588 19 314 747 134 € Algeria 2 280 5 214 1 989 3 161 33 333 216 95 € Morocco 5 280 2 714 1 480 3 158 33 757 175 94 € Palestinian. Auth. 289 8 187 161 3 965 443 41 € Total Med‐10 68 165 56 725 35 547 53 479 275 698 330 194 € Total Med‐13 68 987 61 376 39 991 56 785 275 698 330 206 € Origin of the FDI flows: Europe takes the lead again

The investors from the Gulf States, paralysed by the drying up of credit, are beginning to run out of steam (the annualised amounts of the projects issued by the countries of the MENA7 group totalled 8.5 billion euros in 2008, against 22 billion euros in 2007). A new economic map is being drawn, where Europe is taking up the leading role: chased or overtaken by the Gulf States in recent years, the Old World took its place once again in 2008 as the leading region for issuing FDI to the Med countries (41%).

Azerbaijan became the main issuer of FDI in Turkey in 2008 as a result of the hyperactivity of the public enterprise Socar, which, during the year 2008 alone, with its partners purchased 51% of the former Turkish public petro‐ chemical giant Petkim for 2 billion dollars, launched a 5 million dollar investment programme for this company and announced the project to create a refinery at Aliaga (north of Izmir) in partnership with another local petrochemical company, Turcas. Socar has also acquired 50% of the capital of the Turkish construction group Tekfen Holding.

7 Excluding Med countries

Foreign direct investment in the Med region in 2008

Figure 13. Main FDI emitters in the Med region in 2008 (annualised inflow 2008 for Med 13 in million euros, relative weight in 2008 and 2003‐2008 total, and progression between 2007 and 2008, ANIMA‐MIPO) Origin Projects 08 Flow 2008 % total 08 Δ 07‐08 % total 03‐08 1. Azerbaijan 4 5 114 12.7% NC 1.8% 2. UAE 66 4 769 11.9% ‐66.1% 9.9% 3. UK 55 4 638 11.5% ‐15.8% 5.1% 4. USA 113 4 414 11.0% 1.9% 15.5% 5. France 112 2 733 6.8% ‐72.8% 7.9% 6. Nederland 28 1 837 4.6% ‐34.9% 2.5% 7. India 23 1 801 4.5% 125.6% 1.4% 8. Germany 40 1 512 3.8% 37.7% 2.2% 9. Austria 7 1 159 2.8% 143.5% 1.1% 10. Kuwait 34 1 135 2.8% ‐60.3% 4.8% 11. Greece 13 1 124 2.8% ‐38.5% 2.3% 12. Spain 25 1 075 2.6% ‐24.1% 2.7% 13. Qatar 10 992 2.4% ‐26.9% 1.8% 14. Russia 8 953 2.3% 316.6% 1.3% 15. Italy 30 783 1.9% ‐39.6% 2.9%

Investments from the Gulf States: the swansong?

As in 2007, the United Arab Emirates are to be found among the main investors in the Med region. The Emirates announced in 2008 projects the cumulative gross amounts of which totalled 16.8 billion euros; a considerable amount, once smoothed, taking account of the duration of the completion of these projects, comes down to 4.7 billion (annualised amount, i.e. probably invested from 2008).

Three long‐term real estate projects (Porta Moda at Tunis, Aqaba in Jordan and Dounya Parc in Algiers) alone represent two thirds of this 17 billion. The promoters of these projects (Abu Dhabi Investment Authority (ADIA) and Gulf Finance House in Tunis, Al Maabar at Aqaba and EIIC in Algiers) forecast the end of the work in 10, 7 and 5 years respectively, but the crisis which affecting Dubai severely and the rarity of customers for this type of luxury real estate product should at best slow down their completion and at worst compromise it.

Given the uncertainty which weighs heavily on a number of these megaprojects, the classification of the main issuer countries of FDI is based upon the ‘annualised amount’ data produced by ANIMA‐MIPO.

Foreign direct investments in the Med region in 2008

As far as the Gulf States are concerned, in number of projects, the Kuwaitis follow the Emirates with 34 projects, mainly in Egypt and Jordan. Only 22 Saudi investment projects have been detected in 2008 against 43 projects in 2007, mainly in Egypt and in Algeria. As in previous years, the Gulf State investors concentrate their attention on the real estate sector (4.2 billion euros) and are especially present in the Machrek (they are at the origin of 50% of FDI flows intended for this region in 2008).

Euromed integration continues

Overtaken in 2006 by investors from the Gulf States, European businesses have once again been in the dominant position since 2007: in 2008 they are at the origin of 16.3 billion euros of the FDI announced in the Med region (down however by 37% compared with 2007) and have created 32,158 new jobs (above all in the automobile and aeronautics industries, many in textiles also). Figure 14. Relative contributions of the main FDI emitting regions into the Med region (Med 13, in % of annualised declared amounts, ANIMA‐MIPO 2003‐2008)

100% Asia‐Oceania 90% 80% MEDA‐10 70% 60% USA/Canada 50% 40% Gulf & other 30% MENA 20% 10% EU‐27 + AELE 0% 2003 2004 2005 2006 2007 2008

Eight of the countries to be found in the Top 15 are members of the European Union (36.8% of the flows of the Top 15 with 14.8 billion euros), with the United Kingdom in the lead (4.6 billion euros in total, 3.8 billion of which to Turkey) and France, which remains very present in the Maghreb (2.7 billion euros). With 1.8 billion euros, Dutch investors come in third

Foreign direct investment in the Med region in 2008 position of the European honours list (massive presence in commercial real estate in Turkey).

By cumulating the amounts of the projects announced for the period 2003‐ 2008, France calls the tune (with 24 billion euros), ahead of the United Kingdom (18 billion euros), Italy (7.2 billion euros), Spain (6.8 billion euros), the Netherlands (6.1 billion) and Germany (5.2 billion).

North America (United States, Canada) represent 5 billion euros of investment projects in 2008 (12.5% of the total), mainly in the energy sector (1.2 billion euros above all in Libya, Tunisia, Egypt). The American operators are especially present in Israel (52 projects centred on the new technologies) and in Turkey (26 projects).

With 31 billion euros, the Asia‐Oceania group continues to progress, pushed along by India which totals 1.8 billion euros in 2008 (hydrocarbons in Egypt, automobile construction in Turkey).

Figure 15. FDI flows by main regions of origin and destination (annualised declared amounts in billion euros, ANIMA‐MIPO 2003‐08)

Foreign direct investments in the Med region in 2008

Profile of foreign investors in the Med region

Types of business: preponderance of multinationals

The SMEs are at the origin of hardly 15% of the FDI projects detected by MIPO over the period 2003‐2008. European SMEs together represent more than 60% of the projects from this total. The SME projects are only worth 7.5% of the total of jobs created by all types of investors and 5% of the amounts.

On the contrary, the multinationals issue nearly 60% of the gross amounts of FDI and create 57% of the direct employment for only 41.5% of the number of projects recorded over 2003‐2008. European multinationals are behind around 50% of the projects; the rest roughly equally shared between multinationals from North America (USA‐Canada) and MENA (mainly from the Gulf States).

Investors from Europe, the Gulf States and North America: sectoral competition and complementarity

Investments from the Gulf States present a very unbalanced sectoral profile: with 52% of the amounts over 2003‐08 (and 26% of the projects) going to the Construction and Transport sector, 19% to the Tourist sector and 10% to Telecoms. European projects are better spread projects: Energy, which represents the main destination of European FDI, is worth it is true 31% of the amounts and 11% of the number of projects. But among the following 5 sectors in amounts, not one exceeds 10‐15% (Financial Services 15%, Telecoms 11%, Cement‐Glass‐Paper 10%, Building, Public Works and Tourism 9% each).

The particularity of American and Canadian FDI in the Mediterranean concerns in the first instance the size of the industrial projects (excluding hydrocarbons): 40% of the amounts announced, against 20% for Europe and hardly 7% for investors from MENA. Energy only represents 23% of the amounts announced over 2003‐2008, against 20% for the Electronic Components industry (Intel in Israel), and 14% for the Software and Computing Services.

Foreign direct investment in the Med region in 2008

Methods of installation: grassroots creations and acquisitions of existing assets run 50/50

Among the different methods of installation possible, foreign investors show their preference in 2008 for grassroots creations (46% of the amounts announced for 27% of the number of projects). The acquisitions or strategic prises de participations in existing assets represent for their part 30% of the projects and 26% of the amounts. The progression in the amounts devoted to brownfield projects encouraging (+100% over a year, to reach 8.8 billion euros in 2008), even if it is due in good part to the renewal of the operating concession for hydrocarbons linked to ambitious investment programmes. Beyond hydrocarbons and the development programmes for the telecoms network by the large world players present in the Mediterranean, the extensions of industrial sites remain too few in number (hardly 60 projects/annum). Creation of subsidiaries/branches together has reached the bar of 25% of the projects identified in 2008, for only 7% of the amounts. Sectors: BTP and energy still in the lead, but more modest projects

On the face of it, few things have changed in 2008: as in 2007, Building, Public Works‐Infrastructures and Hydrocarbons dominate the landscape of foreign investment in the region. However, Building, Public Works and Energy are among the sectors which suffer most from the crisis, along with Financial Services and Building materials (glass, cement). Telecoms, due to the non‐attribution of new licences or major privatisations, are awaiting the new wave of FDI. Among the sectors which are on the increase are to be Business Services, Software, Aeronautics, Chemicals and Retail Distribution.

The average budget per FDI announced, in these 2 sectors which had attracted a good number of megaprojects in 2006‐07, declined however considerably, to reach 176 million euros in the BTP in 2008 (‐40% compared with 2007), and 149 million euros in the energy sector (that is an annual drop of almost 50%). The average budget per project, all sectors considered, mechanically follows the same path, to settle at 88 million euros in 2008 (against 129 million euros in 2007).

The number of foreign projects announced in Construction and Transport is in decline, premise of a coming to earth underway, after a number of years of madness (more than 100 projects a year for 3 years), whereas the cumulative budgets have been divided by 2 in one year (22.6 billion euros

Foreign direct investments in the Med region in 2008 gross in 2008). The Materials Industries (glass, cement, minerals, wood, paper) are suffering in return from the new cautiousness of the leaders of the sector who from 2008 have preferred to cut down their new investment programmes, even suspend certain projects announced in the euphoria of the boom of 2007. Even if all the investments announced to date in Cement do not reach fruition, the local demand should soon find an equivalent offer, even a surplus. Speculation over building materials should end once the shortage is over.

Despite the extreme volatility of energy prices and the moderation in world demand as a result of the economic slowdown, the number and the amounts of foreign projects announced in Energy remained high in 2008. Whether the fruit of a certain effect of hysteria or the perspicacity of operators who gamble on a rapid rebound in the prices, the upkeep of foreign investment is vital to increase the reserves and the upstream and downstream capacities of the Med countries who are well blessed with hydrocarbons. Watch this space: during the international call for tenders organised at the end of 2008 by Algeria, only 4 exploration licences out of 16 found takers.

In the same way, the future of many of the large projects announced in 2007‐ 2008 in the Heavy Industries (metallurgy, chemicals‐plastics‐fertilisers) would today appear uncertain. The prospects for export (automobile, Building, Public Works, speciality chemicals) or for the local markets which are still expanding (large infrastructure projects, local agriculture) lack clarity, and added to the difficulties of financing projects heavy in capital, they should occasion postponements or cancellations.

Metallurgy nevertheless attracted fifteen or so projects in 2008 (against an average of 5 between 2003‐ 2006). It remains to be desired that the financial stranglehold of the international economy does not also counter the Mediterranean chemical boom (around 30 projects per annum since 2005, projects worth 7.6 billion euros in 2008, above all intended for Turkey). The fertiliser sector, whose large actors are in the process of concentration, remains attractive: natural gas has become very cheap (used for the production of nitrogen), increasing margins as a result.

Foreign direct investment in the Med region in 2008

Figure 16. Number of projects and gross declared FDI amounts, by sector (ANIMA‐ MIPO 2008, in million euros)

Amount 2008 Projects 2008

PW, PPPs, logistics 128

Energy 115

Chemistry 22

Distribution 25

Financial Services 81

Telecom 19

Tourism, catering 39

Glass, cement, minerals, wood, paper 42

Agro‐business 24

Metallurgy 15

Consulting & services to companies 38

Automotive 36

Other 11

Software services 55

Electr. Hardware 31

Drugs 16

Biotech 4

Electronic components 16

Textile 14

White goods & consumer electr. 9

Mechanics & machinery 12

Aeronautical, naval & railway equip. 22

Furnishing & houseware 4

Declared amounts, M€ 05 000 10 000 15 000 20 000 25 000

Foreign direct investments in the Med region in 2008

The global crisis has just hit manufacturing industries, with strong local spin‐offs, with all its might, typically the case of the automobile industry. The automobile sector has, however, never been as attractive as in 2008, and not only in Turkey (thirty or so projects per annum since 2003, amounts close to 800 million euros over 4 consecutive years). The installation of assembly plants and sub‐contractors in the South (Renault at Tangiers‐Med, for example) should nevertheless continue. In a global environment of pressure on costs, other industries (aeronautics, ship‐building, railway equipment), subjected to the same constraints of price competitiveness and proximity to the order givers or the new markets, are also heading south.

The electronic component industries, general public electronics, electrical & electronic equipment and mechanical machinery and equipment do not seem to manage to attract significant foreign investment (apart from Turkey and Israel), despite the obvious vocation of the Mediterranean as a manufacturing base for growing local markets and the coverage of the European markets at a reduced cost.

The textile‐clothing sector continues to attract an average of some fifteen projects. In 2008, the agro‐food industries attracted 1.7 billion euros, an average performance given the potential of the Mediterranean markets; performance due mainly to the acquisition of profitable targets in Turkey.

The good news is to be found on the services side. Tourism, of course continues its decline (few new projects announced in 2008), which appears reasonable given the stock of megaprojects announced in previous years. Of course, financial services and telecoms are still in pole position, and continue with a more silent revolution after the amazing projects of recent years. Retail distribution pursues its expansion in the region, despite some mis‐hits.

However, the real novelty is to be found in business services.

Computer services have thus been attracting around 50 projects per annum for 4 years, in Israel but not only: the young computer engineers from the Med countries are beginning to be appreciated for their real worth. Counselling & and other business services, from engineering and legal counselling to facility management, not forgetting call centres and recruitment all profit from growing demand. Competition for exports will become tougher for call centres or the externalisation of certain support functions. The dynamics of the sector rely, however, to a large extent on local factors,

Foreign direct investment in the Med region in 2008 linked to the spread of modern business management techniques, source of an unquenchable demand. Target investments with strong local spin-offs

It is to be feared that the majority of FDI in energy, or in heavy industry, using equipment and a workforce which is to a large extent imported, and exporting products which often have been little transformed, provides little local added‐value (beyond the annuity paid by the operator). Idem for certain forms of real estate (secondary residences for the diasporas). On the contrary, light industry (general public electronics, automobile, agro‐foods, etc.) or certain service activities (logistics, business services in particular), well integrated in the other sectors (but too little represented in FDI), may fairly largely demultiply its effects in the economy. Figure 17. Direct job creation potential per each million euros invested (ANIMA‐ MIPO 2003‐08) Sector Av.job Total nb Total Amounts9 Jobs / creation/ of projects jobs (est)8 (mln €) mln € project 2003‐08 Electr. consumer goods 665 40 26 600 531 50 Automotive 942 178 167 676 4 049 41 Textile 471 117 55 092 1 464 38 Consulting/other services 235 204 48 034 1 522 32 Electr. & electron equipt. 208 173 35 979 3 829 9 Agrofood 388 170 65 895 7 673 9 Tourism, catering 1 316 281 369 862 48 626 8 Cement, minerals, paper 599 202 121 047 19 578 6 Retail 472 103 48 629 8 184 6 PW, transport, PPP 1 320 489 645 480 113 860 6 Metallurgy 438 63 27 563 6 066 5 Software services 161 223 35 985 7 986 5 Other & non specified 208 47 9 753 2 170 4 Financial services 272 408 111 032 33 409 3

8 The estimations proposed for the total direct job creations have been obtained by multiplying the average number of direct jobs created per project (according to the promoters’ announcements) by the total number of FDI projects recorded by the MIPO observatory over the period 2003‐2008, according to the sector. 9 These are amounts announced by the promoters of the project, aggregated by sector over the period 2003‐2008.

Foreign direct investments in the Med region in 2008

Sector Av.job Total nb Total Amounts9 Jobs / creation/ of projects jobs (est)8 (mln €) mln € project 2003‐08 Drugs 75 90 6 786 2 177 3 Aeronautical, naval, train 189 63 11 883 4 280 3 equipment Electronic components 339 77 26 106 10 790 2 Machines & mechanics 116 53 6 166 3 759 2 Biotechnologies 53 14 747 494 2 Energy 227 425 96 456 68 211 1 Chemistry, plasturgy, 145 129 18 705 14 512 1 fertilisers Telecom 255 114 29 070 34 725 1 All sectors 547 3 681 2 012 972 397 966 5 Honours list for the largest projects

It is possible to consult the detailed base of the projects detected by the ANIMA‐MIP observatory on www.anima.coop. To provide a glimpse, the table below sets out the projects announced with a value greater than one billion euros, which are neither necessarily the most interesting nor the most significant10. Figure 18. The 15 projects with declared budgets above 1 billion euros announced in 2008 1. Tunisia. Abu Dhabi Investment Authority + Gulf Finance House (UAE). ADIH to launch in Tunis its Porta Moda real estate project land plots provided by Gulf Finance House (€4 600 m). 2. Turkey. SOCAR (Azerbaijan). The company to invest USD 5 billion to enhance Petkimʹs production capacity, a Turkish petrochemical company in which it holds a 51% stake (€3 417 m). 3. Jordan. Al Maabar (UAE). The consortium to relocate Aqabaʹs port facilities to the southern part of the city and develop a tourism megaproject for USD 5 billion over 7 years (€3 288.7 m).

10 For these gigantic projects, the ANIMA‐MIPO observatory has taken into account both the gross amount announced and the duration planned to complete the project, which enables it to have available, alonside the cumulative gross amounts, ‘smoothed” data over the number of years for the implementation of the project (often 3 to 10 years for real estate projects).

Foreign direct investment in the Med region in 2008

4. Algeria. Emirates International Investment Company (UAE). The investment company to invest USD 5 bn over 5 years to develop Dounya Parc, a mixed‐use project in the Grands Vents district of Algiers (€3 288.7 m). 5. Libya. Occidental Petroleum (USA). The group to sign a full 30‐year agreement with Libyaʹs NOC and invest USD5 bn over next 5 years in tripling production of Sirte basin fields (€3 288.7 m). 6. Tunisia. Terna ‐ Rete Elettrica Nazionale (Italy). The firm engaged in electricity transport and STEG to create a JV for managing the construction of a power plant in El Haouria (€2 000 m). 7. Turkey. Indian Oil Corporation (India). The group to set up a JV for the creation of new Ceyhan refinery, in which ENI, Kaz MunayGaz, local Calik and IOC will each have 26% (€1 826.32 m). 8. Libya. Repsol‐YPF (Spain). Agreement with Libyaʹs NOC for the extension until 2032 of Repsol operated blocks NC115 and NC186 in Murzuq basin, in which Respol holds 40 and 32% (€1 710.1 m). 9. Turkey. SOCAR (Azerbaijan). The Socar‐Turcas‐Injaz JV eventually wins control over state‐run chemicals maker Petkim for USD 2 bn (€1 341.8 m). 10. Egypt. Emaar Properties (UAE). The UAEʹs property developer to create a luxurious 150‐room resort and 50 private villas in Marassi (€1 217 m). 11. Turkey. Tesco / Kipa (UK). Kipa, the Turkish retail chain bought by UK‐based giant Tesco in 2003 is to create 100 new stores by 2013 (€1 167 m). 12. Turkey. British American Tobacco (UK). British American Tobacco to win the auction for Turkish cigarette maker Tekel thanks to a USD 1.72 billion bid (€1 131.3 m). 13. Turkey. BC Partners / Moonlight (UK). London‐based buyout firm BC Partners to buy from Koc Holding a 51% stake of Migros Türk for TRY 1.98 billion (€1 066m). 14. Turkey. BC Partners / Moonlight (UK). The investment funds gathered in Moonlight, after the buyout in February of a 51% in Turkish supermarket chain MIGROS Turk, to up their stake to 97.9% (€1 023 m). 15. Cyprus. Bouygues + Carnival‐Costa Cruises + Amsterdam Harbour (Other country). The Zenon Consortium won the DBFO contract for the Larnaca Seafront redevelopment, whose 1st phase consists in creating a cruise port and marina (€1 000 m).

2. Sectoral analysis of FDI in the Med region

Sectoral panorama 200811

The year 2008 presents fake similarities to the year 2007, were it not for the climate of uncertainty weighing on the majority of sectors.

The construction and energy sectors, which once again account for the largest part of foreign direct investment in the Med region in 2008, are among the sectors the most exposed, along with the financial services, the telecoms and the building materials (glass, cement).

Telecoms, as a result of the non‐attribution of new licences or the postponement of major privatisations, are waiting for the next wave of FDI.

Among those sectors on the upswing, are to be found business services, software, aeronautics as well as chemicals, which has been the subject of consequential projects, but concentrated on Turkey (more than 60% of the amounts for 5 projects out of 22).

Turkey also attracts the essential part of the investments in retail (90% of the amounts and 17 projects out of 25 in 2008). Figure 19. Distribution of FDI by sector (ANIMA‐MIPO 2008, nb of projects and declared amounts, million €) Projects Amounts Variation % Sectors 2008 2008 07‐08 2008 1 PW, PPPs, logistics 128 22 611 ‐47.0% 32.9% 2 Energy 115 17 153 ‐25.3% 24.9% 3 Chemistry 22 7 588 216.2% 11.0% 4 Distribution 25 3 894 77.2% 5.7%

11 Methodological preliminary: so as to better measure the sectoral dynamics of FDI in the Mediterranean, the analyses to follow will concentrate on the cumulative amounts of gross FDI amounts announced by the promoters of projects during the year considered, and not on the annualised flows of FDI (amount announced during year n divided by the number of years planned to complete the project).

Foreign investments in the Med region in 2008

Projects Amounts Variation % Sectors 2008 2008 07‐08 2008 5 Financial Services 81 3 562 ‐65.7% 5.2% 6 Telecom 19 1 981 ‐46.7% 2.9% 7 Tourism, catering 39 1 977 ‐8.6% 2.9% 8 Cement, minerals, wood, paper 42 1 935 ‐80.8% 2.8% 9 Agro‐business 24 1 687 47.5% 2.5% 10 Metallurgy 15 1 399 ‐65.7% 2.0% 11 Consulting & services to companies 38 1 062 436.7% 1.5% 12 Automotive 36 664 ‐30.6% 1.0% 13 Other 11 630 ‐42.7% 0.9% 14 Software services 55 535 ‐30.3% 0.8% 15 Electr. Hardware 31 481 ‐37.0% 0.7% 16 Drugs 16 373 ‐32.4% 0.5% 17 Biotech 4 349 402.4% 0.5% 18 Electronic components 16 330 ‐30.4% 0.5% 19 Textile 14 220 13.4% 0.3% 20 White goods & consumer electr. 9 178 71.9% 0.3% 21 Mechanics & machinery 12 90 ‐74.6% 0.1% 22 Aeronautical, naval & railway equip. 22 39 102.3% 0.1% 23 Furnishing & houseware 4 24 nc 0.0% Total 2008 778 68 763 ‐36% 100%

A pronounced imbalance in the sectoral distribution of projects The concentration of FDI on a few sectors is accentuating year after year: the first 5 sectors represent 80% of the total amounts announced in 2008 for only 54% of the number of projects (respectively 76% and 53% in 2007). Figure 20. Strong concentration of FDI inflows on some sectors (MIPO 2008) Group of Amount 2008 Nb. of aggregated % of total 2008 % of total 2008 sectors (€ mln) projects Top 5 54 808 80% 418 54% Top 12 65 513 95% 616 79%

Top 5 (in order): Construction‐Transport‐Delegated Services, Energy, Chemicals‐Plastics‐ Fertilisers, Distribution Financial Services Top 12: Idem + Telecom, Tourism, Glass‐cement‐minerals‐wood‐paper, Agro‐Food, Metallurgy, Engineering & Business Services, Automotive

Foreign direct investments in the Med region in 2008

Sectoral distribution of the stock of FDI 2003-2008

The stock of FDI projects detected by ANIMA over the period 2003‐2008 is very largely dominated by the sectors of construction‐transport‐PPP, energy and tourism. Figure 21. Announced FDI amounts by sector (ANIMA‐MIPO, 2003‐08, €m) Construction‐ transport 17% Others Energy 26% 15%

Cement, Tourism minerals 8% 8% Financial Telecom services 9% 14% Jobs creation under the sectoral microscope

The ‘jobs created per operation’ data is not available for all FDI projects detected by MIPO12: it should therefore be taken with precaution. Total direct employment creation in 2008 recorded by MIPO continues its decline compared with the peak of the year 2006 (76,143 jobs announced in 2008 against 100,000 in 2006, and 86,000 in 2007)13.

. The aggregation of the employment data over the period 2003‐2008 allows to build a more significant data base, from which emerge the sectors which should hold the attention of governments at the moment they decide upon a selective FDI targeting strategy. In the figure below are to be found, in the grey‐white squares, some key sectors in a period of world economic turbulence.

12 Data provided for 25% of the projects in 2008, and only 18% of the cases out of the period 2003‐08. By taking into account the projects creating few jobs (subsidiary‐ representation bureau, participation, privatisation), the estimated rate rises to 50%. The household furnishings & fittings and biotechnologies sectors do not appear due to the lack of a significant sample in 2008. 13 For a classification of the sectors creating the most jobs in 2008, refer to Annex 2.

Foreign investments in the Med region in 2008

Figure 22. Job creation potential by sectors, ANIMA‐MIPO 2003‐08 (total nb of projects and average number of jobs created 14 by project)

Nb projects Average job creation

PW, PPPs, logistics 1 320

Tourism, catering 1 316

Car manufacturers or suppliers 942

White goods & consumer electr. 665

Glass, cement, minerals, paper 599

Distribution 472

Textile 471

Metallurgy 438

Agro‐business 388

Electronic components 339

Financial Services 272

Telecom 255

Consulting & services to companies 235

Energy 227

Electr. Hardware 208

Other or not specified 208

Aeronautical, naval & railway equip. 189

Software services 161

Chemistry, plasturgy, fertilizers 145

Mechanics & machinery 116

Drugs 75

Biotechnologies 53

0 100 200 300 400 500

Nb of projects 2003‐08

14 Average calculated solely on the basis of projects comprising the direct employment data as announced by the promoters.

Foreign direct investments in the Med region in 2008

Outside the well trodden paths (tourism, real estate), and contrary to sectors which are highly capital‐intensive but poor in local linkages (energy, for example), these are sectors which present both:

. a verified power of attraction in the Med region ( existing stock of FDI projects);

. and a large potential to create jobs compared with the capital invested (above all manufacturing activities or services). Focus: 5 key sectors in the face of the crisis

The 5 sectors which will be analysed in the following pages have been chosen for they present a resistance or rebound potential in spite of the international economic crisis. These are activities which are rather rich in jobs (see figure 22, Job creation potential by sector), and which find in the Mediterranean host conditions which are favourable to their expansion, whether they target local demand or are export‐oriented.

Transport and logistics

Dealt with within the composite sector ‘Construction, Public Works, Transport, Delegated Services’ of the ANIMA‐MIPO observatory, the component Transport‐ Logistics Infrastructures & Services is undergoing a complete revolution. Even if it still only represents a modest part of the FDI projects aimed at the sector (dominated by real estate: high end residential, seaside resorts, American‐style shopping centres, office blocks), with 35 projects for nearly 6 billion euros in 2008 (against 50 projects in 2007), it nevertheless represents the most strategic element. Strategic, above all, because the transport and logistics activities are indispensible to the development of the remainder of the economy.

The Mediterranean is a logistics hub not to be overlooked, whose natural vocation is finally able to express itself thanks to the new tools which the massive investments, public as well as private, in infrastructures, are in the process of providing it. One step ahead or behind the progress of the infrastructures, transport service providers (transport of persons, logisticians), are arriving in number, following their usual customers (automobile, retail distribution, etc.), or to make up for a lack of local offers in markets where there still remains a lot to do.

Foreign investments in the Med region in 2008

Of course, the global economic slowdown is depressing the world transport market; the decline in international trade provoking the collapse of prices (especially in international maritime transport, see box on CMA‐CGM). The Mediterranean, which witnesses the passage of 30% of world maritime traffic, will not be spared: the frequentation recorded by the Suez Canal in January 2009 was down 22% year‐on‐year, that is 1,313 ships against 1,690 one year earlier.

The WTO reminds us that international trade is one of the main victims of ‘the drying up of commercial financeʹ which backs ‘90 % of tradeʹ. This ‘unprecedented crisis’ should, according to the WTO continue into 201015. The World Bank for its part, forecasts a decline of 2.1% in world trade in 2009 (2.8 % according to the IMF). The drop in volumes exacerbates the competition between transport operators on the most mature markets, pushing some of them to throw in the towel, as for example, Deutsche Post‐ DHL in North America.

In the Med region on the contrary, there remain places to be filled: transport and logistics operators from Europe (14 projects in 2008) and also from the Gulf (13 projects, 9 of which for the UAE, mainly in the Machrek, but also in Algeria), are moving in.

In 2008, all the Med countries attracted large FDI projects. The opening up of air transport to private initiative in Syria for instance enabled the Kuwaiti Al Aqeelah to launch Pearl of Syria (Loloa), a private airline company created as a joint venture with the Syrians Sham Holding and Syrian Air. Generally speaking, in terms of infrastructures, the port projects dominate (transhipment or land servicing ports). The 2 main projects are those of Dubai Ports World, which took a 90% stake in the company managing the port of Sokhna in Egypt, and forecasts investing one billion euros over 3 years to develop it, while its compatriot Al Maabar will carry off the USD 5 billion BOT contract concerning the extension of the port of Aqaba in Jordan. In Morocco, the development of terminals 3 and 4 of the port of Tangiers‐ Med for nearly 7 billion dirhams between now and 2012 has been attributed to consortia led respectively by PSA Singapore Terminals and the Dane A. P.

15 Les Echos, Le commerce international résiste mal au marasme économique, 26/02/09, interview of Pascal Lamy, Director of the WTO.

Foreign direct investments in the Med region in 2008

Moller‐Maersk. Those companies however recently expressed concerns regarding feasibility of the projects in times of crisis.

Following the example of the European revival plans, which among other things are counting on large infrastructure projects, particularly transport, the South should maintain its course despite the foreseeable degradation in public accounts. Of course, the traffic forecasts on which the large projects for the creation or the extension of port infrastructures in the South are based should be revised downwards. But the delay incurred was such (for example in the case of the upgrading of the Algerian ports of Djendjen and Algiers by DP World) that the work can be justified as a minimum to cope with present requirements and a fortiori to prepare for the future. The large rail projects (freight and passengers), airports (already well advanced) and road, even if slowed down, should in themselves create the conditions for the economic development of tomorrow.

On the services side, the logistic service providers will find in the South almost virgin markets, and local partners who have everything to gain by contributing to the connection of their countries to the vital arteries of regional and global trade. The expansion strategies will firstly be national (see, for example, the Swiss Kuehne & Nagel which is creating a 2000m2 depot in a suburb of Algiers to distribute Legrand products in Algeria or Aramex’ project in Cairo), while waiting for regional economic integration to progress (SNCF‐Geodis who is banking on Tanger Med, or the Kuwaiti Agility in Aqaba’s special economic zone). Numerous factors, notably political, but also industrial, make the Med countries in fact a group of partitioned markets, and prevent the large logistics operators from deploying their integrated systems on a regional scale. Figure 23. Med maritime transport in the eye of the storm: the case of CMA‐CGM CMA‐CGM, the 3rd shipping company in the world for container transport, based in Marseille, is adapting to the new world situation by banking especially on the Mediterranean. ‘Our ships remain 90 % to 95 % full between Asia and Europe’ declared its MD Jacques Saadé, at the end of 2008. The decline in traffic in the Suez Gulf only results in a slight drop for CMA‐CGM; 60 of the group’s ships henceforth using the canal every month, against 65 previously. Between 2008 and 2011, the world container ship fleet will have increased by 1.586 ships, but CMA‐CGM says that it has ‘prepared for the situation by creating new lines to secure the surplus volumes, from Asia destined for Europe, the Mediterranean, Northern and Western Africa’. At the end of 2008, the group

Foreign investments in the Med region in 2008 even launched a new line, North Europe‐Mediterranean‐Oceania (NEMO) linking Oceania to northern Europe by Suez and the CMA‐CGM hub at Damietta.

After obtaining a new concession at the start of 2009 for the operation and extension of the port of Lattakia, in Syria, the CMA‐CGM group henceforth manages five terminals around the Mediterranean basin. Its regional investment programme is ambitious, in the region of 200 million euros, and will concern as much transhipment ports (servicing North Africa and the Adriatic from Malta, Morocco, Portugal and West Africa from Tanger and the Levant from the Egyptian port of Damietta), as the ports servicing land‐based targets (Southern Europe from Marseille‐Fos and Iraq and the Levant from Lattakia). The port of Tangiers‐Med, at the crossroads of the continents, has, according to Jacques Saadé ‘a great future servicing the west coast of Africa, America and other destinations’.

The group is counting finally on the diversification of its offer to face up to the crisis: the refrigerated container transport activity will be reinforced, so as to offer a door‐to‐ door service, cruising will be tested on a small scale, while the transport of low cost Asian automobiles is being studied: ‘Yes, the transport of new cars interests us, for China and India are starting to export these products and we would like to participate in this new and promising market. If we win contracts, we shall then charter specialist ships ‐’car‐carriers’ ‐ then we shall have our own ships constructed’, declared Jacques Saadé.

Software services, engineering & other business services

These 2 sectors of activity are driven on by favourable winds despite the crisis. The projects intended for the Engineering and Business Services segment, which between 2004 and 2006 represented several tens of millions of euros of foreign direct investment, exceeded the bar of one billion euros in 2008, after having reached more than 200 million euros in 2007. These are considerable amounts for activities which are very employment‐intensive (often qualified), and relatively light in capital. Software services have attracted around 50 projects per annum for the past 4 years, in Israel but not alone, providing jobs for young, well‐ trained and inexpensive software engineers from the Med countries. The demand for this type of services will continue to increase in the Med region. Of course, the export competition will become stiffer, for call centres or the externalisation of certain support functions.

The dynamics of the Engineering & Business Services sector is, however, based in part on local factors, an inexhaustible source of demand: the leading project of 2008, for example, concerned the acquisition by the Mitsubishi conglomerate of 45% of the capital of Intercity, a Turkish leasing

Foreign direct investments in the Med region in 2008 and fleet management company, in which are to be invested USD 3 billion over 4 years. The Maghreb continues to attract the biggest share of the projects (20 out of total of 38), with a high level of attractiveness also for Egypt and Turkey. The Europeans are behind 60% of the projects (including 16 French investment projects). Also to be noted in 2008, the investments of:

. the Israeli, Gilon Investments which has purchased the Turkish company Ereteam, a specialist in business intelligence,

. and the Moroccan site Rekrute.com, specialist in the on‐line recruitment of executives, which is to set up in the Elgazala Nursery in Ariana with a view to offer its services in Tunisia.

Beyond the arrival of big players in public relations, communication, legal counselling, audit, certification, which continues (Balms & Cruz in Tangiers, WPP‐ Memac‐Ogilvy and Ernst & Young in Algiers, Roland Berger Strategy Consultants in Casablanca, Publicis‐Leo Burnett in Amman, etc.), it is the projects in engineering and human resources which have multiplied in 2008: 8 HR projects (Convergys and Antal International in Egypt, BPI Group, Bayt.com and Core Management in Morocco, and the Americal KCS Private Equity fund, which has in Israel bought 51% of the Danel medical personnel placement agency), plus a dozen or so engineering services or consultancy projects, some of which are in strategic niches for the region, in particular energy efficiency (location in Tunisia of the French company StrategEco Solar‐Eneovia in partnership with the local BSB) and facility management (the Australian Globe Williams International in Jordan, in a JV with Darat Jordan Holdings).

Concerning the supply of offshore services, it is the growing presence of emerging operators which is striking: alongside the French champion Teleperformance which continues to reinforce its presence in Tunisia, we see the Indian Genpact, specialist in the externalisation of support functions, open in Morocco a 1,000 position French‐speaking centre to develop its presence in Europe, while the Argentine CubeCorp is creating a BPO platform in Amman, hand in hand with the Accelerator Technology Holdings fund.

Regarding Software services, Tunisia stands out this year, in addition to the regional champion, Israel. Israel (as has recently done Turkey, but on a lesser scale) is attracting especially American projects for the acquisition of

Foreign investments in the Med region in 2008 software editors, while Egypt, Tunisia and Morocco are making a speciality of European computer service projects (France in the lead).

Out of the 26 projects captured by Israel in 2008, 19 are acquisitions, the largest among them being those of Fraud Sciences (on‐line payment security) by Ebay‐Paypal and Diligent Technologies (editor of software for the restoration of critical data) by IBM. R&D is the other strong point of Israel, which was demonstrated in 2008 by the installation of laboratories and development centres by SAP, EMC‐VMware, Wind River Systems and Yahoo! for example. Figure 24. FDI boom in software and IT services in Tunisia over 2008 . Segula Technologies (France). The engineering and consulting group to acquire the Tunisian assets of software services company Mapsys, which will become IGM / Mapsys Tunisie. . Tessi (France). The software publisher and integrator to create an affiliate specialised in development and maintenance as well as in data copying and processing. . SITA / AISA (Switzerland). The provider of IT solutions to airlines & airports teams up with Tunisair & Medsoft to create the AISA JV to carry out the IT outsourcing of Tunisair. . Sodifrance (France). The software services provider to set up a branch in Tunisia. . IGE+XAO (France). The firm specialising in computer aided design (CAD) to create a new local subsidiary. . Owliance (France). The BPO services provider to develop new activities in information systems maintenance, validation, and development for French insurance broker SPB. . Génitech (France). Génitech clones its Toulouse IT branch (Génigraph) in Tunisia. . Billcom Consulting (United Arab Emirates). The UAE‐based expert in billing software systems to set up a subsidiary in Tunis. . Owliance (France). The BPO services provider to build a 900‐positions offshore customer service centre in Chotrana industrial zone near Tunis. . eXo Platform SAS (France). The French collaborative software editor to open a subsidiary in Tunisia to develop its business in Africa. . Micros / Fidelio (USA). Fidelio, a provider of business management software for the hospitality industry, to set up a subsidiary for development and maintenance. . Aedian (France). The information technology consultancy and services company to create Aexia, a subsidiary, in JV with the local Oxia.

Foreign direct investments in the Med region in 2008

According to the American firm IDC, the world computing sector, which will be worth 1.44 trillion dollars in 2009, is already in semi‐stagnation. ‘The hardware market will be more heavily impacted by the decline in equipment expenses and will show a drop of 3.6 % this year’, says John Gantz, Director of Research at IDC. On the other hand, although they have been revised downwards, the sales of software products and software services should progress respectively by 3.3 % and 3.4 % in 200916.

Mechanical industries

The automobile, aeronautical‐naval & rail‐materials and machines & mechanical equipment sectors are strategic for the Med economies. These are labour‐intensive activities, relatively well integrated in the local economic fabric (raw materials, parts, services), and which at times involve real technology transfers. The aeronautics and automobile industries, it is true, are set to hit a few air pockets: world air transportation will already have lost more than 8 billion dollars in 2008 according to the International Air Transport Association (Iata)17, threatening the order books of the large airplane manufacturers, whereas the European automobile market, main export client for the Mediterranean automobile sector, is not likely to pick up again before 2010, at best (according to the estimations of the large constructors, it is likely to decline by around 20 to 25% in 2009, against 15% for the world market).

However, the causes of the increasing use of externalisation to sub‐ contractors who are themselves tending to develop part of their production offshore, have not disappeared in spite of the crisis: the euro remains strong, the pressure on production costs just as the imperative to right‐size the industrial production capacities will accentuate.

Political and social pressures weighing heavily on the large order‐givers in their home markets may slow this movement but not prevent it18: the success

16 Les Echos, Croissance proche de zéro en 2009 pour les dépenses informatiques, 27/02/09 17 Les Echos, Le transport aérien a perdu plus de 8 milliards de dollars en 2008, 03/03/09 18 See, for example, the support granted by the French Strategic Investment Fund to the aeronautics sub‐contractor Daher, new owner of the Socata (ex‐subsidiary of EADS installed notably in Morocco), and which has undertaken, as compensation, to invest in France (project of a plant in Nantes linked to the local Airbus cluster). Cf

Foreign investments in the Med region in 2008 of the low cost models (Renault’s Logan and Sandero for example) in Europe as in the markets of the South, proves that demand arbitrates in favour of the offshore plants in the painful selection which all automobile constructors are forced to make in the face of overcapacity (estimated at 9.5 million vehicles/annum by the firm CSM Worldwide in Europe19).

Considered as a whole, these three sectors (automobile constructors and equipment makers, aeronautical, naval, and rail equipment, machines and mechanical equipment) represented 70 projects in 2008 (against 54 in 2007, that is to say 7% of the total of all sectors combined), cumulative amounts of 800 million euros of FDI, and 25% of the direct jobs identified by MIPO in 2008.

Automotive

Turkey, the only real integrated automobile complex in the region, has continued to attract the larger part of the foreign projects in the sector in 2008 (18 out of 36), even if the national segment entered into stagnation during the 2nd semester 2008, and is preparing for a severe recession in 2009.

The Maghreb totals, however, 13 projects, against 5 for Egypt. The European industrials (with Germany in the lead) dominate, but we can see their challengers from the emerging world continue their installation in the Mediterranean, so as to capture local market share and move closer to European customers (Tata Motors and Mahindra & Mahindra in Turkey, the Brazilian bus manufacturer Marcopolo and the AvtoVaz‐Lada group in Egypt). The multiplication of Chinese assembly projects in Algeria should, however, come to a halt with the freezing of all assembly projects imposed recently by the Algerian government.

Despite the withdrawal of Nissan from the project, the giant Renault plant at Tangiers‐Med, in Morocco, will certainly see the light of day, but with delays, according to the declarations of the French constructor. Presenting the results of the group, on 12 February 2009, in Paris, Carlos Ghosn, head of Renault, declared: ‘We are pushing off the capacities of Tangiers, for the markets are currently bad but we are not renouncing this project. Tangiers is a plant

Daher est conforté par le Fonds stratégique dʹinvestissement, by Aliette de Broqua, econostrum.fr, Wednesday 04 March 2009 19 Europe enlarged to Russia and Turkey.

Foreign direct investments in the Med region in 2008 planned essentially around the Logan range with motorcars intended for the emerging countries and we remain optimistic in the fact that these countries will take off again once the crisis is over.’ The upholding of local and regional demand (including the African markets) will be decisive for the automobile projects in the South.

Aeronautical, naval, rail equipment

The sector, despite still modest amounts, is beginning to make a place for itself in the Mediterranean industrial landscape: it attracted 22 FDI projects in 2008, against a dozen on average the previous years. The rail sector attracted one project, in 2008, that of General Electric, which has formed a partnership with TULOMSAS, the sole Turkish constructor of locomotives, to produce GE models for regional export at Eskisehir. Naval construction is also starting to emerge.

It is, however, aeronautics which since 2003 has attracted the majority of the projects. A few projects announced in 2008:

. In Turkey, the Airbus group is collaborating with Turkish Airspace Industries on the A350 programme; the engine manufacturer Pratt & Whitney is opening a maintenance centre, while Stork‐Fokker Elmo is opening a cabling plant in the Tax free zone of Izmir.

. The Moroccan and Tunisian clusters continue to attract European sub‐ contractors. In Tunisia, the Italian light aircraft manufacturer Storm Aircraft‐Avionav is installing a 60 position production and assembly site at Mateur, in the north of the country.

. In Israel, Gulfstream Aerospace, subsidiary of the American General Dynamics which manufactures Gulfstream jets, is increasing its production capacity of Galaxy, its Israel JV with IAI, which produces the G200 and G150 at Tel Aviv.

Despite the crisis, the aeronautics sectors has some sunny days ahead of it in the Med region: Airbus announced, at the beginning of 2009, the creation through its subsidiary Aerolia of a cluster close to Tunis, which will group together around a plant for the assembly of Airbus elements, all the necessary suppliers and sub‐contractors.

The European airplane constructor should maintain the number of airplane deliveries constant in 2009, at the same time planning to reduce the

Foreign investments in the Med region in 2008 production rhythm during the year, as a provision against a marked increase in the number of postponements or order cancellations. ‘2010 will be a crucial year for us’, admits Louis Gallois, MD of Airbus. ‘The crisis will probably not finish at the end of 2009 and the aeronautics industry is often slower to react.’20 Figure 25. Rapid growth of the shipbuilding sector (ANIMA‐MIPO) . Turkey. Fipa (Italy). The yacht manufacturer teams up with local Tacar Yachting to set up a new dock‐yard in Antalya free zone, where the Maiora models will be produced (€18 m).

. Turkey. Carlyle (USA). The private equity firm to acquire a 50% stake in Turkish shipyard TVK, specialised in chemical tankers.

. Turkey. Abraaj Capital (United Arab Emirates). The private equity firm to acquire a 50% stake in Numarine, a Gebze‐based luxury‐yacht manufacturer.

. Malta. Tognum / MTU Friedrichshafen (Germany). Tognumʹs diesel engines subsidiary MTU Friedrichshafen to join Maltaʹs MARSEC‐XL cluster R&D activities on yachts automation and propulsion.

. Malta. Sunseeker International (UK). The famous luxury boat brand to join Marsec‐XL ‐ the Marine Systems and Software Engineering Cluster, and participate to its R&D activities.

. Malta. Rodriguez / Camper & Nicholsons International (France). The luxury yachting services provider to relocate its global headquarters to Malta, inaugurating new offices at the Vittoriosa yacht marina.

. Tunisia. Zodiac / Zodiac Marine & Pools (France). The group to relocate in Tunisia part of its production of inflatable boats and pools.

. Morocco. Groupe Simon / Team Industry (Switzerland). The Swiss naval architecture group to invest in larger facilities, still in Kenitra, for Team Industry, a yacht producer which will create 200 jobs.

20 Les Echos, EADS sʹattend à deux années difficiles, 11/03/09

Foreign direct investments in the Med region in 2008

Textile

The Mediterranean textile and clothing domain is today in midstream: its price competitiveness is too weak to compete with the Asian producers in the ready to wear clothing on the developed world markets, and even its local outlets would seem to be threatened.

Bad news has followed bad news since the beginning of the year 2008: according to the estimations of the CEDITH, European textile and clothing imports are likely to have dropped by 4.5 % in 2008 and should still decline by 7 % in 2009. Among the suppliers to Europe who scored points in 2008 are to be found China, Vietnam and also Egypt (respectively + 4.9 %, + 3.5 %, and +7 %). The other Mediterranean countries show a significant drop: Morocco has seen its sales to Europe slip by 3.8 %21, whereas those of Turkey have taken a dive of 11 %.

In Tunisia, where according to official figures, textile and clothing represented 22% of the country’s exports, and where 95% of the production of the sector is exported, mainly to Europe, the exports of clothing products have slipped by 28.6% in volume and 7.3% in dinars22.

The region can, however, count upon serious assets when its large clients cross a zone of turbulence.

Reactivity is not only a requirement of the fast fashion chains, which permanently renew their collections: it is also a prerequisite of the European retail distributors and department stores. Figure 26. The European retail distribution buyers are back in the Mediterranean ‘I don’t know what my turnover figure for the year will be, comments Jean‐Daniel Gatignol, Textiles Director of Carrefour. In this situation, I shall not order all my series in Asia. I will commit for around 60% and for the remainder manufacture in short runs in the Mediterranean, as and when required. Decathlon and H & M are already doing that successfully’.

The Galeries Lafayettes group, which had 95% of its products made up in Asia, is also looking to balance its procurements to the benefit of the Mediterranean. ‘We are currently seeking plants in these countries which are capable of making sophisticated fashion

21 ‐10 % for Moroccan textile exports as a whole, according to the Moroccan Association of Texile and Clothing Industries (Amith). 22 Figures from the Tunisian Textile Technical Centre (CETTEX)

Foreign investments in the Med region in 2008 products, with high added‐value, but in short runs, explains Michel Roulleau [deputy Director of the Galeries]. Pushed by the likes of Zara or H & M, we are coming back closer to suppliers. We need to be more reactive.’

The rise of the value of the dollar against the euro should also help.

From Le Figaro, Approvisionnement: les pays méditerranéens regagnent du terrain sur la Chine, by Aliette de Broqua, 07/01/2009

Other than the segments of the clothing industry which are already showing relative signs of success, such as jeans or fast fashion in general (see the massive investments made by the Italian Benetton in Tunisia), the Med textile sector overall should make the crossover to new products, by following the channel open by the European textile industry in the direction of fibres or textiles with high added‐value: industrial textiles, technical textiles, medical textiles, etc.

Of the 14 projects detected by MIPO in 2008, for amounts greater than 200 million euros (the average of the previous years), it is interesting to note that:

. The industrial companies from the emerging world are starting to perceive the Med countries as a hub for production aimed at Europe: the largest project was thus provided by an Indian company, Birla Cellulose, a subsidiary of Grasim Industries, which is investing 130 million euros in Alexandria to create a fibranne viscose plant aimed at Europe, while a Sino‐Egyptian co‐enterprise (The Egyptian‐Chinese Enterprise for Unwoven Cloth) has inaugurated a plant for unwoven fabrics in the Suez special economic area (north of the city).

. Turkish manufacturers continue relocating part of their production south of the Mediterranean: the Egyptian‐Turkish Company for Ready‐ made Garments, for example, in 2008 inaugurated a ready‐to‐wear factory dedicated to export in the Kafr El Dawar industrial estate near Alexandria.

Diversification and upstream development (weaving‐spinning) are underway:

. In Tunisia, Lectra, a French specialist in software and machinery for textiles has started to develop locally in the fashion business, automobiles, industrial fabrics, aeronautics and water sports.

Foreign direct investments in the Med region in 2008

. Still in Tunisia, the Italian bedding fabric manufacturer Martinelli Ginetto has created MagiMed, a spinning and weaving plant in the El Mghira industrial estate, Governorship of Ben Arous.

. Finally, in Turkey, Röder, a German manufacturer of stands and prefabricated buildings is creating a production centre for tents in the town of Düzce, to the east of Istanbul.

Electronics industry

The Med countries may count on the dynamic consumption of household electrical goods and general public electronics (TV, hi‐fi, etc.), and large margins of progression given the still average rates of equipment and the growth of the middle classes. However, this demand to date remains too often satisfied by imports (except perhaps in Turkey, ‘workshop’ of Europe in this sector). But, according to data from the ANIMA‐MIPO observatory, one million euros invested in the assembly of electronic equipment would provide, on average, the creation of 50 permanent jobs, an absolute record all sectors considered. In 2008, the electronics industry in the Med region (components and sub‐assemblies + finished products) attracted 24 FDI projects worth 500 million euros, but could be bettered (except for Israel, a world leader in the sector).

Micro‐component production activities still remain out of reach, with a few exceptions, (Intel and the whole of the Israeli high tech industry, Fuba Printed Circuits in Tunisia, etc.), in particular in a global context of over‐ capacity (and a price war between Asian and European/American producers). The activities for the assembly of sub‐assemblies or finished products, rich in labour, should on the contrary move closer to the Med markets which are growing strongly. The Mediterranean in particular has a role to play in short productions for rapid delivery23. Even if it means

23 See, on the other hand, as regards the long runs, the case of the Franc‐Italian semi‐ conductor manufacturer STMicroelectronics which announced during the summer of 2007 its project to downsize in Malta, and to close the assembly and test site of Ain Sebaa between Casablancaand Rabat, Morocco (where the group employs 6,000 people), as well as 2 sites in the United States, in the context of a vast restructuring operation of its production tool. The transfer of certain activities from the Aïn Sebaâ plant to that of Bouskoura, both situated at Casablanca should be completed in 2009.

Foreign investments in the Med region in 2008 associating with local entrepreneurs, who may moreover facilitate access to local finance and make the projects more ‘‘acceptable’ for the host economy (tension over import bills), the large players in the sector (important brands from the developed world as challengers to the emerging economies) have a great deal to gain

Some illustrations:

. In Morocco, the American group Tessera Technologies has taken 10% of Nemotek Technology, financed by the Moroccan CDG, which will produce under licence in Ifrane integrated circuits and other components used in the manufacture of miniaturised cameras intended for mobile telephones, medical imagery, scanners and even the automobile industry. ‘Shellcase’ technology for the design and manufacture of miniaturised cameras has been developed by an Israeli company taken over by Tessara, the finance is local, and the outlets worldwide! . In Tunisia, the French Prodelec, manufacturer of silk‐printing screens and machines for the electronics industry is creating in Tunis a North African production and distribution subsidiary, while the Italian Indesit, in alliance with the Tunisian Poulina Group Holding, whose subsidiary FRIGAN is to produce and commercialise the ARDO range of products, and the Moroccan Kadmiri is creating a JV with the Tunisian businessman El Arem for the production of air‐conditioning units. . In Egypt, Intel is associating with the Egyptian Boraq for Electronics and Industries with a view to assemble its mother boards, intended for the regional market, locally. . In Turkey, Metalfrio Solutions, the largest Brazilian manufacturer of household appliances has acquired 71% of the capital of Senocak Holding, which owns the Klimasan refrigerator brand.

http://www.econostrum.info/La‐crise‐dans‐la‐microelectronique‐aborde‐les‐sites‐de‐ production‐de‐Mediterranee_a763.html?preaction=nl&id=10552326&idnl=46042&

Foreign direct investments in the Med region in 2008

Figure 27. Asian general public electronics manufacturers are starting to produce in the Mediterranean: Hisense in Egypt and Foxconn Technology in Turkey The Chinese manufacturer of household appliances and general public electronics Hisense inaugurated at the end of 2008 in Egypt its 5th production site outside China.

After South Africa, France, Hungary, the group had set its sights on Algeria in 2007, where, thanks to a partnership with the Algerian company Condor‐Antar Trade, a subsidiary of the Benhamadi group based in Bordj Bou Arréridj, the production of refrigerators for the North African market started up rapidly.

In Egypt, the Chinese group chose also to associate with the Egyptian company Sun Group TV. The 2 partners have started by investing 15 million dollars so as to install production chains capable of producing 100,000 LCD television receivers per annum. The total investment, once all the phases have been completed, will be 60 million dollars.

Why set up in Egypt what will in time be the largest television receiver plant in North Africa and the Middle East? Firstly because the local market is alone capable of justifying such an investment: after having opened a representation office in Egypt at the end of 2006, the group rapidly took over as leader on the local market of Chinese television receivers. The crisis has for the moment little affected the growth of the export turnover of the Hisense group which many of the large brands would envy.

According to the admission of Lan LIN, Vice‐Chairman of Hisense: ‘locating in Egypt is based upon much more than interesting production costs, especially labour costs. It corresponds to the Hisense’s localisation strategy, [which aims particularly] at improving the perception of the brand among local consumers. ‘‘ 24

In Turkey, it is Foxconn, a major sub‐contractor of the electronics multinationals, and subsidiary of the Taiwanese Hon Hai Precision Industry, which started work at the beginning of 2009 on a plant for office computers. Installed in the region of Çorlu, this site will provide direct employment for 2,000 with a total investment of 60 million dollars. The production start‐up is planned in 18 months.

Why Turkey, when local industry is suffering from a dip in its European sales? Hewlett‐Packard has a lot to do with it. Long time partner of Foxconn, the American group has undertaken to give orders to this Turkish plant to satisfy an insatiable local and regional demand. HP aims to deliver nearly 200,000 machines a month to Turkey, the Near and Middle East, as well as certain European markets.25

24 Hisense PR : Hisenseʹs Fifth Overseas Production Base Put Into Production, 2008‐11‐ 04, http://www.hisense.com.cn/en/news/atct_1_1/200811/t20081114_4452.html 25 SABAH, US giant chooses Turkey for Investment http://www.hurriyet.com.tr/english/domestic/11071256.asp

3. Country profiles-2008

Morocco: facing up to the European slowdown

The good agricultural campaign enabled the Kingdom’s economic growth to leap to 6.2% in 2008 according to the IMF (2.7% in 2007). The reduction in the energy bill arrived in good time for the Moroccan economy, whose exports are starting to slip, starting with the textiles/clothing industry. As a result of the drop in demand, 50,000 jobs are likely to be destroyed in this sector in 2008 according to the authorities (France and Spain alone absorb 70% of Moroccan textiles exports).

After nearly 5 years of good times, only 95 FDI projects were detected for Morocco in 2008, down by 36% compared with 2007. This collapse is felt at the level of the amounts invested. According to the ANIMA‐MIPO observatory, 1.5 billion euros of FDI were injected into the Moroccan economy in 2008, against 2.7 billion in 2007 (for total gross announced FDI amounts of 2.13 billion in 2008 and 5 billion in 2007).

By capturing 932 million euros of gross announced FDI, the financial services recorded a good performance in 2008. Several French groups have invested in the Moroccan banking sector in 2008:

. The Crédit Agricole group has increased its stake from around 53% to 77% of the capital of Crédit du Maroc, while its subsidiary Sofinco has risen to 49% of Wafasalaf (consumer credit);

. Crédit industriel et commercial, a subsidiary of the French Bank, Crédit Mutuel, has increased its participation in the Banque Marocaine du Commerce Extérieur (BMCE);

. The Caisse des Dépôts et Consignations (CDC) has created a carbon fund, in partnership with Moroccan CDG and the European Investment Bank (BEI).

The Kuwaiti CMKD, has increased the capital of its Moroccan investment fund, Al Ajial Investment Fund Holding to 6.7 billion dirhams.

The tourism sector, crucial for the success of the Vision 2010 plan (10 million tourists in 2010), continues to attract several projects, despite an obvious drop in the amounts invested, and a few abandonments (Belgian Thomas & Foreign investments in the Med region in 2008

Piron for instance). Eleven FDI projects were thus detected in 2008, starting with the Spanish promoter Property Logic which has launched work on the construction of the Jardin des Fleurs, a luxury project in the Mediterrania‐ Saïdia resort. In Marrakesh, the French company Alian is building a hotel in the Palmeraie (palm grove), while Inteco, real estate branch of the giant Russian gas company Gazprom, has created Kudla, a local subsidiary with a capital of 155 million dirhams, to manage 3 projects in the North. Despite the crisis, the attractiveness of the country as a tourist destination has not waned: 8 million foreign tourists visited Morocco in 2008.

As in Tunisia, the high price of the barrel of oil has pushed a number of foreign operators to come a try their luck in the Moroccan desert. Eight new oil exploration licences were thus delivered in 2008. But, it is in the domain of clean energy that investors will be the most awaited from 2009. Indeed, so, as to reduce dependence on outside agencies, the Moroccan government has decided to act (the country imports more than 90% of its energy needs). Between now and 2012, 20% of national electricity production should be provided by alternative energy sources, starting with solar energy and wind turbines.

Algeria: new challenges in sight

Against a background of a return to a certain form of economic patriotism, the year 2008 has been rather successful for the Algerian economy.

The revenues drawn from hydrocarbons, which represent 97% of export income, still contributed nearly 80 billion dollars to the State budget in 2008, for a trade surplus of 40 billion dollars. As in 2007, the country is continuing apace its policy of large undertakings, with the help of the explosion in the price of crude oil. Public investments should, however, be revised downwards in 2009, under the effect of the brutal drop in the price of oil. In this context, the oft‐delayed diversification of the economy is becoming a necessity.

According to the figures of the National Investment Development Agency (ANDI), Algeria attracted 102 FDI projects in 2008, which enabled the creation of 10,723 direct jobs. The gross announced amounts were considerable: 6.2 billion euros, according to the ANIMA‐MIPO observatory (out of which only 2 billion likely to be invested effectively in 2008).

Foreign direct investments in the Med region in 2008

Contrary to what is observed in other Med countries, far from beating a retreat, the Gulf State investors are consolidating their positions in Algeria. In 2008, 15 FDI projects representing 4.9 billion euros (gross announced amounts) arrived from the Gulf (against 13 FDI projects in 2007).

A worrying sign for the Algerian economy, FDI originating in Europe dropped by 50% compared to 2007, as much in flows as in the number of projects, not seen since 2003! Thus in 2008, ANIMA‐MIPO detected 29 European FDI projects worth 907 million euros (gross announced amounts), against 60 FDI projects worth 1.8 billion euros in 2007. This cold shower on European investments may be explained by a certain lack of clarity in the new legal conditions concerning investments for foreign groups in Algeria.

According to the ANIMA‐MIPO observatory, the flows of FDI to Algeria coming from other Med countries collapsed in 2008, dropping to a mere 169 million euros, against 2.3 billion euros in 2007. Figure 28. Algeria toughens its legislation on foreign investments After months of rumours following the declarations of President Bouteflika in the summer of 2008, which disapproved of certain terms and conditions for the sale of the Orascom Algerian cement plants to the Lafarge group, the Algerian government has taken, or is in the process of taking, measures modifying substantially the legal conditions for the reception of foreign investors. An instruction signed by the Prime Minister, Ahmed Ouyahia, on 22 December 2008 threatens many projects from businesses wishing to locate in the country to produce locally: after having revised its hydrocarbons code in this sense, Algeria will henceforth impose, for any new project, whatever the sector of activity, that the majority of the capital (51%) goes to local partners. Even if it means allowing the foreign investor to remain dominant by imposing that the local participation be shared between at least three shareholders. According to the newspaper ‘Tout sur l’Algérie’, this same instruction would finally oblige foreign investors to have recourse solely of local financing26. It is also question of reviewing the dispositions covering the repatriation of dividends. While the French newspaper ‘Les Echos’ reports that foreign direct investments will have to ‘generate more currency inputs than outputs’, without any greater details, the Oxford Business Group had specified that the new measures would also require that foreign investors re‐invest locally within 4 years of their installation at least the

26 Tout sur l’Algérie, Les milieux d’affaires évoquent le spectre d’une année blanche pour lʹinvestissement étranger en 2009, by Ali Idir, 02/02/2009

Foreign investments in the Med region in 2008 equivalent of the fiscal advantages that they may have benefited from during their installation27. At the beginning of 2009, a few weeks prior to the presidential election, a new set of measures was announced: given the inexorable rise in imports, that the government deplored, importer companies may no longer be 100 % held by foreign capital, but will be forced to offer 30% of their capital to local investors. This obligation is to apply to any new importer company created from 1st March 2009, before being extended to all the companies already in existence on 30th September. The field of application is still uncertain. Some are asking if all products are concerned. ‘[This measure] aims more especially at the automobile sector and companies the likes of Renault or PSA, who import to re‐sell states a well‐placed observer, whose comments are reported by ‘Les Echos’. As for those businesses which both produce and import ‐ like Michelin or Sanofi‐Aventis ‐, they wonder if the circular applies to them...’ (…)28

The development of the construction, transport and PPP, sector has attracted 4.18 billion euros of gross announced FDI.

Despite the crisis, the promoters from Dubai continue to unveil new real estate projects (5 in 2008). See for instance the Emirates International Investment Company which says it will maintain its real estate project ‘Parc Dounya’, a leisure park situated at Delly Ibrahim, near Algiers (5 billion dollars over 5 years).

With 210 million euros in gross announced FDI, the building materials sector declined in 2008 compared with 2007. Four significant projects have been identified, 3 of which for cement (against 8 FDI projects in 2007, representing then around 900 million euros).

Since it became the majority shareholder of the Egyptian Orascom Cement in 2007, the French Lafarge does not go unnoticed in the Algerian landscape:

. Firstly by becoming the de facto owner of two cement plants held previously by Orascom Cement (situated at M’sila and Sig);

. then by announcing in 2008 the creation a cement plant with a capacity of 2.5 million tonnes per annum, at Oum El Bouaghi, next to the town of Aïn Beida (Lafarge has reportedly suspended the project early in 2009);

27 Oxford Business Group, Reshaping Foreign Investment, Latest Briefings 28‐10‐2008 28 LʹAlgérie sʹenfonce dans la fermeture de son marché by Marie‐Christine Corbier, Les Echos, 27/02/09

Foreign direct investments in the Med region in 2008

. Finally by taking over the same year 35% of the capital of the public holding ERCC which owns the Meftah cement plant.

An old story, the privatisation of the Algerian ports, finally came to fruition in 2008. After several years of rumours, the Emirates’ DP World will mastermind the rehabilitation and extension of the container terminals at Algiers and Djendjen in a JV with competent port companies.

Oran, the capital of the West, is to host several collective service projects, with notably Agbar, the subsidiary of the Suez group and La Caixa, which will carry off a contract for the delegated management of Oran’s water network.

For its part, the Singaporean company Hyflux is to create a desalination plant at Magtaa near Oran in a 51/49 partnership with the Algerian Energy Company (for 157 million euros).

In complete conformity with its industrial vocation, the Oran‐Arzew centre has attracted several projects aimed at the heavy and chemical industries:

. The Omani group Suhail Bahwan is negotiating with Sonatrach for an ammonia and urea complex at Mers El Hadjad;

. The Spanish Fertiberia is forming El Bahia Fertilizers, a 51/49 JV with the Algerian Sonatrach for the construction of an ammonia plant at Arzew.

A powerful vector of diversification, the manufacturing industry remains the Achilles heel of the Algerian economy (only 5% of the GDP in 2008, against 30% for the hydrocarbons sector).

Certain activities might even benefit from the new restrictive measures on imports, notably in the automobile production sector, where several partnerships were under negotiation in 2008 between local SMEs and Chinese manufacturers for instance, even if those assembly projects have been freezed by the government for now.

Foreign investments in the Med region in 2008

Tunisia: priority to industry

With 100 FDI projects detected in 2008, the destination of Tunisia has moved up a rung in 2008.

Indeed, despite the degradation of the international economic situation, the Tunisian economy has held its ground. Pushed by exports, sub‐contracting and tourism, economic growth, far from running out of steam, has remained above the bar of the 5% in 2008.

Tunis thus exported 5 billion dinars’ worth of textile products in 2008, that is around 2.8 billion euros (textiles being a key sector which represents 22% of total Tunisian exports).

Other good news, tourism generated more revenue in 2008 (2.4 billion dollars, +8%). despite the crisis which has hit the middle classes in Europe, 7 million visitors stayed in the country in 2008.

According to the FIPA (Foreign Investment Promotion Agency), Tunisia received the equivalent of 2.3 billion dollars of FDI in 2008, an increase of 54% compared with 2007! In numbers of projects: the ANIMA‐MIPO observatory measures a rise of 56% compared with 2007, with 100 FDI projects detected in 2008, against 64 in 2007.

With 62 FDI projects, the Europeans remain, by far, the leading investors in Tunisia, well ahead of the Gulf State companies (15 projects). The Europeans are the most present in textiles (7 projects including 3 projects from the Italian Benetton which is creating a finishing hub at Kasserine and opening several new factories). According to the ANIMA‐MIPO observatory, the French are the leading investors in software and business services (a total of 15 projects). In insurance, it is worth noting the acquisition of 35% of the STAR by the French Groupama for 72 million euros.

It is the energy sector which received the greatest number of FDI projects in 2008, with 21 projects (representing 2.3 billion euros) against only 6 projects in 2007. An analysis by country of origin throws an interesting light on the diversity of the companies attracted by Tunisian hydrocarbons (a dozen different nationalities, 5 of which Canadian): Figure 29. Boom in FDI into energy projects in Tunisia (ANIMA‐MIPO)

Foreign direct investments in the Med region in 2008

. Terna ‐ Rete Elettrica Nazionale (Italy). The firm engaged in electricity transport to create with local STEG a JV to manage the construction of a power plant in El Haouria and the transport of its production to Italy. . Delta Hydrocarbons (Netherlands). Amsterdam‐based energy group to spend USD 125 million on Eurogas and APEXʹs Sfax Permit for a 50% participation (€82.2 m). . Petrovietnam (Viet Nam) to explore for TND 16 million a block near Gabes in partnership with state‐owned ETAP (€8.9 m). . Cooper Energy (Australia) gets with ETAP the ‘Bargou’ 5‐years offshore exploration licence, near Hammamet, which includes 200 square km of 3‐D seismic and one exploration well (€6.9 m). . Eurogas Corporation (Canada). The oil and gas exploration firm focused on Spain and Tunisia to invest USD 5 million by the end of 2008 in several drilling programs in Ras el Besh‐Sfax (€3.3 m). . Timgad Energy (Egypt) to get the ʹKondarʹ oil exploration license covering 972 km2 in the Sousse governorate. . Petroceltic (Ireland) is to be granted new 3‐years exploration permit for the Ksar Hadada site. . Pioneer Natural Resources (USA) was awarded the Cherouk concession, which includes 8 fields in the Ghadames Basin, southern Tunisia. . Libyan Petroleum / Naft Libya (Libya). The group is to buy the assets of Exxon Mobil Tunisia, i.e. a network of 380 gas stations plus 2 asphalt factories in Tunis and Sfax. . Canadian Superior Energy (Canada). The group is to become operator for the ‘7th of Novemberʹ block, spread between Tunisian and Libyan waters, with Tunisian‐Libyan JV Joint Oil.

This infatuation should, however, lessen in 2009, under the effect of the economic situation.

The sectoral spreading of FDI projects shows that the country really is undergoing rapid industrialisation. Indeed, according to the ANIMA‐MIPO observatory, the Tunisian industry received 51 FDI projects in 2008 (that is half the total).

Foreign investments in the Med region in 2008

As in 2007, the automobile and aeronautics sub‐contracting sectors have won numerous projects. These two sectors received 11 projects in 2008, with for example, the Italian light aircraft constructor Avionav which is locating a production and assembly site at Mateur, in the north of the country. The German equipment manufacturer Coroplast which is creating a site for the production of cable harnesses which will employ 2,500 people in 2010, while the Japanese manufacturer of automobile cables Yazaki has decided to set up a plant in the El Aguila industrial park.

The Libyan and German investors are the more enterprising in the tourism field. The LAICO investment fund, held by the Libyan government, has taken over two new tourist complexes: the Karthago Hammamet and the Karthago Djerba. The same Libyan fund has created the Laico Hotels Management Company with Tunisian Travel Services (TTS), a 51/49 JV based in Tunis. For its part, the German RIU Hotels & Resorts is adding two luxury hotels at Hammamet to its range.

Libya: rebirth continues

Twenty two years after the American bombardments of Benghazi, the visit of the Secretary of State, Condoleezza Rice to Tripoli in September 2008 sealed the return of Libya to the fold of the international community. The rapprochement between Washington and Tripoli took another step forward in October 2008 with the inauguration in the Libyan capital of an American commercial bureau, which should enable economic relations between the two countries to begin again.

According to ANIMA‐MIPO, Libya received €9 billion in gross announced FDI (3 billion annualised).

As in 2007, it is energy which concentrated most foreign investments in 2008 (12 FDI projects out of 27).

International investors are rushing into this market which is developing at very high speed, after a whole decade of trade embargo. In 2008, the 3 largest foreign investments in Libya were from Western businesses. It is the case of the American Occidental Petroleum which signed 30‐year agreements with the NOC and is investing USD 5 billion over 5 years to triple production of its fields in the Sirte basin.

Foreign direct investments in the Med region in 2008

The European majors are also out in search of the viable contracts. Hence the French Total, the Austrian OMV, the Spanish Repsol‐YPF and the Norwegian Statoil have obtained an extension until 2032 of the contracts to exploit blocks NC115 and NC 186 (Murzuq basin).

The energy sector alone received 2.3 billion euros of annualised FDI (7.5 gross announced FDI). But others sectors also profited from the FDI manna in 2008. To begin with that of the Building, Public Works sector, which attracted 9 projects (around 1.3 billion euros in gross amounts).

Real estate promoters see a great future in Tripoli:

. The Emirates Hydra Properties has set up a subsidiary called Hydra Libya Real Estate, as a prelude to the completion of its real estate project, ‘Tripoli Towers’;

. Qatari Diar holds 49% in a mixed real estate project costing 2 billion dollars, in partnership with the Libyan Development & Investment Company;

. The Greek Consolidated Contractors Company is building an office block and a 5‐star hotel, in partnership with Libyans (300 million euros).

Just as its Algerian neighbour, Libya, whose crude oil revenues represent 95% of its budget income, remains highly exposed to changes in trend.

While the budget surpluses of previous years remain sufficiently large to finance the large infrastructure projects (transport, education, health, energy), the growth of GDP should drop in 2009 to reach a figure rather far from the 8% counted upon by the government.

But for the IMF, the economic fundamentals are sufficiently solid (and the country is relatively disconnected from international financial circuits) to be able to see its way through the crisis serenely.

Foreign investments in the Med region in 2008

Egypt: priority to endogenous growth

Egypt, which will see its growth rate divided by 2 in 2009 (to 3.5%), is conscious, for the first time since the introduction of the reforms in 2004, of a slowdown phase. The impact of the crisis in the Gulf has direct consequences: added to the drop in investments in Egyptian real estate, the decrease in activity in the Gulf States has hit Egyptian workers, who each year transfer several billion dollars to Egypt. The country nevertheless attracted 102 projects in 2008, representing total annualised amounts of 4.5 billion euros (and gross figures worth € 7.3 bn).

Contrary to the general picture in the Med region, where European investors lead, FDI to Egypt remains , as in 2007, dominated by investors from the Gulf States, as much in numbers of projects as in amounts (37 projects, gross declared budgets worth 3.7 billion euros).

Europe follows next with 2.4 billion euros of gross announced FDI. Compared to 2007, the number of projects has dropped markedly (25 projects detected in 2008 against 43 in 2007).

If energy is excluded, while the companies from the Gulf are above all active in construction, banking and tourism, European companies are rather more present in business services and telecoms.

Energy attracted 22 FDI projects in 2008 (representing an annualised total of 1 billion euros). After a hesitant start, Indian investors are less and less spectators and have moved up a gear, starting with Gujarat State Petroleum Corporation, which has lifted 3 licences for the exploration of oil and gas.

Near to Alexandria, it was the Italian group Edison which carried off the licence to develop the Aboukir gas field (an investment of 1.4 billion dollars).

For its part, the Australian Beach Petroleum stands out through 2 operations:

. Acquisition of 20% in the North Shadwan concession for 110 million dollars, in partnership with the Egyptian EK;

. Acquisition from Santos Egypt of a 20% participation in the South East July offshore block, in the Gulf of Suez.

Foreign direct investments in the Med region in 2008

In the banking and finance sectors, it is mainly the Emirates and the Kuwaitis who are dominant:

. The investment branch of the Emirates Dubai Group bought 5.24% of the Egyptian Commercial International Bank (CIB) for 140 million euros;

. Al Ghurair Group is being transformed into a real retail bank opening 30 branches over the next 3 years, on top of the existing 5;

. The Kuwaiti Global Investment House has acquired Capital Trust, an asset manager in Cairo, and Misr International Securities, a stockbroker in Alexandria;

The pressure on credit has not frozen the large construction sites in Cairo, far from it:

. The Qatari Diar has launched the construction of its project ‘Nile Corniche’, a top of the range residential complex, on the eastern bank of the Nile (657 million euros);

. The Emirate Cayan Investment is creating a business district at Sheikh Zayed (Greater Cairo) called Capital Business Park, in partnership with the Egyptian Dorra.

To be noted, in the infrastructures, the management and expansion of the port of Sokhna (Red Sea) by DP World for USD 1.3 billion over 3 years.

The post 2009 period remains the great unknown for the Egyptian leaders. Indeed, for the first time since the new policy of infitah (economic liberalisation) launched in 2004, Egypt’s main sources of income are under pressure.

After FDI, tourism, which represents 6.5% of GDP, has been badly affected by the crisis. According to the authorities, frequentation should drop by 15% to 30% in 2009.

Symbol of the independence of the Egyptian nation, the Suez canal has in its turn been caught up by the world economic slowdown and generates fewer revenues (‐22% in January 2009, or 1,313 ships against 1,690 one year earlier).

Foreign investments in the Med region in 2008

Israel: investments in R&D to prepare for the post-crisis

According to Coface, the growth of the GDP of the State of Israel, which remained above the bar of 5% between 2004 and 2007, started to decelerate in 2008 (4.1%), and should fall by around 1.5% in 2009.

Unemployment, which has been dropping continually since 2004, is climbing (the bar of 7% should be exceeded in 2009).

Despite the storm which is grumbling over the global economy, Tel Aviv wants to remain optimistic in 2009.

The deceleration of the American economy is having a strong impact (the Israeli start‐ups are very dependent on the situation on the other side of the Atlantic), but 76 FDI projects were still attracted in 2008 (against 83 projects in 2007 and 81 in 2006), worth 3.2 billion euros in gross announced budgets.

The fundamentals of the economy and a determined industrial policy have enabled it to soften the blow. Indeed, 5% of Israeli GDP is used to finance R&D, a level unequalled even within the OECD. An effort that the government has decided to increase as part of the revival programme.

Further, according to the French economic mission in Israel, despite the financial crisis, 2008 will remain a historic year for raising risk capital to the benefit of Israeli technological start‐ups (2 billion dollars raised, two thirds coming from the exterior).

Without surprise, American businesses retain the first place on the podium in number of FDI projects (above all present in software, electronics and biotechnology), with 53 projects detected by the MIPO observatory in 2008 (a number unchanged compared with 2007).

With only 14 projects, European entrepreneurs arrive far behind and are to be seen especially in medical equipment, with for example the Swiss Nobel Biocare which has signed a partnership agreement with the Israel Optimet and has taken over the manufacturer of dental implants AlphaBioTec. The French Thales, has acquired in two stages the whole of the capital of CMT Medical Technologies, specialist in medical imagery systems, for 21 million euros.

In solar energy (in full boom in the region), the British Ecofin invested 105 million dollars to buy 40% of the Israeli solar energy company Solel.

Foreign direct investments in the Med region in 2008

According to the ANIMA‐MIPO observatory, the chemical sector recorded strong growth in 2008, with 814 million euros thanks to the investment made by the American fund Fidelity which has taken 5.2% of Israel Chemicals, producer of fertiliser and speciality chemical products.

Out of the 3.2 billion euros of gross FDI received by Israel in 2008, 850 million went to the computing and internet clusters. In the software and computer services sector, these projects concern notably:

. IBM which has purchased for 170 million dollars, Diligent Technologies, editor of software to restore critical data;

. Ebay which purchased the Israeli company, Fraud Sciences, for USD 169 million;

. Linux which bought Qumranet, developer of solutions to virtualise office applications for 70 million euros.

The telecoms operators and internet sector is marked by the acquisition of 10.66% of the Israeli Bezek by the JV formed by the Americans Apax and Saban (for 311 million euros).

Symbol of the ‘Made in Israel’ technological know‐how, biotechnologies and medicines have progressed strongly in 2008. In terms of gross announced amounts of FDI, the two sectors received a cumulative 480 million euros, against 152 million euros in 2007 (a net rise of 215%!).

The American and Israeli laboratories are increasingly numerous in grouping their R&D efforts, in the example of Endocare and the Israeli Galil Medical which merged their companies. Still in biotechs, Johnson & Johnson, a group specialising in the design and manufacture of medical equipment, took over Omrix, a company specialising in bio‐surgery, for 337 million euros.

Foreign investments in the Med region in 2008

Palestinian Authority: no giving in!

The Palestinian territories are slipping, a little more, into precariousness. According to the World Bank, the level of poverty has reached 51.8% in the Gaza Strip and 19.1% on the West Bank. The GDP per capita in 2007 fell by 40% compared with what it was in 1999. The recent war fought with Israel in the Gaza Strip reduced to nothing the industrial production of this small territory (300 factories and workshops are likely to have been destroyed), in which 1.5 million inhabitants attempt to survive, as well as they can.

The conference on foreign investment which took place in Bethlehem in the Spring of 2008 raised a slight hope (11 billion dollars of promises of investments according to the Palestinian Investment Promotion Agency PIPA), which the reality on the ground was to shatter. The restrictions on circulation, the administrative nonsenses and the preservation of the Israeli locus were more powerful than the goodwill of the numerous foreign investors.

According to the ANIMA‐MIPO observatory, 9 FDI projects were nevertheless detected in 2008, essentially located on the West Bank. In real estate, Qatari Diar is to build the new town of Rawabi on the West bank of the Jordan, with the local company Masar and the support of British fund Portland, for 152 million euros. For its part, the Saudi Al Rajhi is launching the mixed real estate project ‘Al‐Ersal Center’, in the centre of Ramallah‐El Bireh, for 146 million euros.

There are a number of investments from Jordan (where a very large Palestinian community lives):

. The investment fund PADICO is creating a poultry farm and a modern abattoir on the West Bank;

. Some Jordanian investors have created with local partners a holding called Watan, which will open construction materials plants;

. The Jordan Engineers Association will build a hospital at Qabatya, near Jenin, costing several million dinars.

Several American projects have been detected in high tech activities:

. TouchStar Software Corporation is to open a 500 position call centre in East Jerusalem for its Arab‐speaking MENA clients;

Foreign direct investments in the Med region in 2008

. Cisco Systems is devoting 10 million dollars of risk capital to the benefit of Palestinian start‐ups.

The combination of Israeli capital and Palestinian know‐how could lead to fruitful cooperation, for both parties. That is the case for the Israeli start‐up G.ho.st Inc which has developed the virtual computer G.ho.st thanks, among other things, to 35 co‐workers in Palestine (with the support of the fund Benchmark Capital).

Jordan: consolidate strengths

In an unstable geopolitical context, the Hashemite Kingdom appears as a haven of stability in the eyes of investors. Economic growth should reach 5.3% in 2009 according to the estimations of the IMF, a real exploit in these times of crisis. This resistance is especially remarkable, when contrary to its Saudi and Iraqi neighbours, the country has practically no fossil resources available, with the exception of bituminous shale (whose exploitation has excited the interest of French Total and the Brazilian Petrobras, who could share costs for the exploration of bituminous shale from the Wadi Al Maghar region).

The fight against unemployment remains the government’s number one priority. In 2008, foreign direct investments enabled the creation of 22,759 new Jordanian jobs, according to the Jordan Investment Board (JIB). According to figures revealed by the Jordanian Investment Promotion Agency, 17,900 of these new jobs were in industry. The ANIMA‐MIPO observatory relates for instance that the Qatari group, Remal Holding, plans to recruit 2,000 people for a glass factory which is to be located in the south of the country (and whose construction has been entrusted to the German DTEC).

37 FDI projects have been detected by the MIPO observatory, mainly in the construction‐transport‐PPP, business services and banking‐finance sectors. Jordanian real estate is currently undergoing a period of stabilisation, even if the infatuation of Gulf State investors has been affected by the crises:

. The Emirates’ Al Maabar won the 5 billion dollar BOT contract concerning the extension of the port of Aqaba and tourist projects;

. The Saudi promoter, Al Rajhi, is to build a 220m high‐rise office block, in the heart of the Abdali project in the centre of Amman;

Foreign investments in the Med region in 2008

. Dubai’s Manazel Real Estate is to launch Amman Gardens, a residential project in the capital, intended for the middle classes.

With 6 projects, the engineering and business services sector is diversifying:

. The French telecoms and network solutions provider TIBCO is interested in Jordan after Algeria and has created a subsidiary baptised TIBCO Jordan;

. Leo Burnett, subsidiary of the French Publicis, to open an office in Amman;

. CubeCorp, an Argentine supplier of support functions externalisation services is to create a hub in Amman, with the fund Accelerator Technology Holdings.

The facility management sector is also beginning to develop. With notably the Australian Globe Williams International which is to form with Darat Jordan Holdings (DJH) a 60/40 JV which will supply facility management services (maintenance, cleaning, security).

Foreign investment in infrastructures, logistics and telecommunications, necessary to feed growth and maintain the competitiveness of the economy (Jordanian exports towards the United States have gone from 25 million dollars in 1997 to 1.5 billion dollars in 2008) grew in 2008:

. The Kuwaiti group Agility is to create a logistics warehouse in the tax‐ free zone of the Queen Alia airport;

. The Kuwaiti group NREC, subsidiary of the Sultan Center, is to create a JV with Aqaba Development Corporation to manage an industrial activity estate;

. The 30 year BOT contract for the construction of the Amman‐Zarqa suburban train line has been reattributed to the Noor‐Ineco‐Tifsa consortium;

. The local subsidiary of the Dubai telecom operator VTEL is creating a fibre optics network in partnership with the Indian Reliance Globalcom;

. France Télécom, majority shareholder in Jordan Telecom since 2006, has opened a Technocentre in Amman, which is joining the Orange Labs network.

Foreign direct investments in the Med region in 2008

So as to put an end to its energetic dependence, Jordan wants to change to civil nuclear energy, with the help of the French Aréva. After signing an agreement protocol at the end of August 2008, the Jordanian government and the French company have created a JV which will profit from exclusivity to explore and operate uranium mines in Jordan. The objective is to install a nuclear power station between now and 2015.

Lebanon: business is picking up

In a context of international financial crisis, Lebanon, which should join the World Trade Organisation at the end 2009, is taking its revenge: the flow of foreign capital has more than doubled in 2008 (portfolio investment, FDI, tourism, transfers from the diaspora, etc) to reach 14.5 billion dollars (+ 55%).

Relatively healthy, Lebanese banks have escaped from the crisis and may count on deposits which are continuing to grow, to reach 100 billion dollars at the height of the crisis, according to the Bank of Lebanon (BDL). Little exposed to toxic products, the Lebanese banking system is playing the role of refuge: in the days following the demise of the American giant, Lehman Brothers, the deposits of the main Lebanese banking institutions thus increased by 500 million dollars. According to the ANIMA‐MIPO observatory, of the 11 FDI projects detected for Lebanon in 2008, 5 are intended for the Banking, Insurance and other Financial Services sector.

The end of political tension and the economic reforms have put Lebanon back in the driving seat. Moody’s rating agency has thus estimated that the level of the Lebanon sovereign debt was bearable, passing it from the status ʹstableʹ to ʹpositiveʹ thanks to the political appeasement and its effects on the economy. Sign that the machine is on the road again, the imports of motorcars took off in 2008 (+103%), according the Beirut Port Authority.

This return of optimism has been well perceived by foreign investors, starting with the Kuwaitis and the Emirates, at the origin of 6 projects in banking, construction‐transport and tourism. It is the case of the Emirates NBD which participated in the increase in capital of the Bank of Beirut, in which it holds a 10% stake. It is the same for the Bank of Sharjah which has heavily increased the capital of Emirates Lebanon Bank (ELBank), ex‐ Bank of the Bekaa.

Foreign investments in the Med region in 2008

In real estate, Beirut receives the largest of projects. The Kuwaiti Al Massaleh stands out with his ‘Al Saifi Crown’ project, a high‐rise residential block situated in Beirut and deliverable in 2010. The real estate sector remains above all marked by the revival of the real estate project ‘Phoenicia Village’ by the Kuwaiti Levant Holding. This 1.5 billion euro site, situated in the centre of Beirut, started up again after being suspended for 2 years following the conflict with Israel in 2006. The centre of Beirut is finally to receive another prestigious project, that of the twin towers ‘Plus Towers’, developed by the Emirates Plus Properties for the amount 135 million euros.

Finally in retail distribution, the Kuwaiti Sultan Center group has taken over from Admic, a franchisee of Monoprix and Géant, 6 supermarkets which will carry The Sultan Center (TSC) banner.

After several difficult years, the country looks forward to the future with confidence. And it is not a hazard if the New York Times places Beirut at the top of it list of 44 best towns to visit in 2009…

Syria: return to grace

The presence of the Syrian President at the Paris Summit for the launching of the Union pour la Méditerranée, at the invitation of the French President, Nicolas Sarkozy, shows the determination of Damascus to bring to an end its international isolation.

De facto, 2008 will have been the year of daring for Syria, as much on the political as on the economic level. While Damascus is on the point of sending its first ambassador to Beirut, the country has just inaugurated a first Stock Exchange.

The economic reforms proposed by the Deputy Prime Minister for economic affairs, M. Abdullah Dardari, have radically changed the business climate. According to the latest report Doing Business 2009 (World Bank), the country has voted several laws making private property and the contribution of foreign financing much safer. According to the same report, nowadays it takes no more than 17 days to create a business.

Projects worth 1.7 billion euros were announced in 2008 by foreign groups, mainly in energy (11 projects, totalling 1.2 billion euros in gross announced budgets):

Foreign direct investments in the Med region in 2008

. China National Petroleum Corp signed a project for the construction of a refinery at Deir Ezzor for 1 billion dollars, in a JV with the Syrian government;

. Petro‐Canada, the Canadian operator of the Ebla field is investing 477 million dollars in the construction by Petrofac of a gas treatment plant;

. Hayan Petroleum, a 50‐50 JV between the Croatian INA and Syrian public company is investing 291 million euros in a gas treatment plant.

Out of the 38 FDI projects detected by the MIPO observatory in 2008, the banking‐finance sector received 9. With the creation of the Damascus Stock Exchange, several brokerage companies, for the most part coming from the region, have made their appearance:

. The Emirates financial services group, Daman Securities, is associating with the Syrian Cham to create in JV a brokerage company dedicated to the new stock exchange;

. The Jordanian broker, United Financial Investments, has obtained a licence to create a brokerage subsidiary;

. The Kuwaiti Global Investment House has created GIH Syria, in which it will hold 44% of the capital, with a view to offer counselling and brokerage services.

Very much in vogue in 2006 and 2007, Islamic finance continues to attract investors in 2008, such as Bahrain’s Al Salam Bank which has formed Cham Al‐Salam, a JV with the Syrian Cham, with a view to develop a local offer of Islamic banking products.

Blessed with a remarkable historical and cultural heritage (Damascus was consecrated Arab Capital of Culture for UNESCO in 2008), Syria wants to make tourism a great priority. In 2018, the sector should employ just under 2 million Syrians (against 1.1 million today), and generate 9.6 billion dollars of revenue, according to the World Tourism Organisation.

As far as FDI in this sector is concerned, the seaside resort of Tartous attracted the two main projects in 2008:

. Carwood Investment, Junada Intʹal and Wahoud Group UK laid the first stone of the seaside resort Antaradus at Tartous, which is to be managed by the Egyptian Porto Marina (197 million euros);

Foreign investments in the Med region in 2008

. Concorde Hotel & Residence Dubai is building, with the Syrian Wahoud, the Concorde Tartous 5‐star hotel and also tourist apartments, thanks to a 45 year BOT contract.

Turkey: Europe’s workshop enters a zone of turbulence

After nearly 5 years of strong economic growth, Turkey is preparing for some difficult moments in 2009.

The international financial crisis has come and broken the vitality of the Turkish economy, whose industrial expansion – mainly export‐oriented‐ is beginning to seize up.

According to COFACE, Turkey will enter into recession in 2009, with a growth rate of ‐1.5%.

Over the years, Turkey has, however, confirmed its role as an important industrial hub, competitive and ideally placed at the gates of the European market (the EU absorbs 90% of the automobile exports produced in Turkey). But the heavy dependence on exports, foreign capital and raw materials (crude oil in particular) is cruelly felt in a period of global economic slowdown and a drying up of credit.

According to the MIPO observatory, 195 FDI projects were detected in 2008 for Turkey, a record figure since 2003 (+ 42% compared with 2007).

With 117 FDI projects, the Europeans remain the most enterprising, a trend unchanged since 2003.

The banking and finance professions attract mainly the French (5 projects, with for example BNP Paribas and Dexia) and the Netherlanders (ING, Aegon, etc.).

In automobiles, the investors are essentially German (Mahle, Continental, Benteler, Meiller, Krone, etc.) and Italians (Pirelli, Unicredit and Fiat). Austrian investors are concentrated in the energy sector (Verbund, OMV), alongside the French (EDF, GDF Suez) and the Germans (Conergy AG, RWE).

Sixteen FDI projects come from the MENA countries, mainly in the construction‐transport (with for example the Turkish subsidiary of Emaar Properties which has bought a plot of land in Istanbul from the local Toprak

Foreign direct investments in the Med region in 2008

Holding) and financial sectors (Kuveyt Türk, subsidiary of Kuwait Finance House, planned on opening 113 branches by the end of 2008).

It is the construction‐transport sector which attracted the most foreign direct investments in 2008, with 36 projects (representing 4.14 billion euros in gross announced amounts).

In 2008, commercial real estate exploded, under the impulse of several Dutch promoters. For several million euros, Corio, Redevco and Acteeum have built a dozen supermarkets in several large towns (13 in all).

The liberalisation of the energy sector which took place in 2008 has enabled the country to modernise its electric infrastructures, and in this way face up to an increasingly large domestic demand:

. Enerjisa, the JV of Sabanci and the Austrian Verbund, is investing 500 million euros in a gas‐operated electricity power station at Bandirma;

. The Czech electricity group CEZ has bought 37.4% of Akernerji, for 224 million euros;

. The Russian oil company Lukoil has purchased the Turkish distributor of petroleum products Akpet, which possesses 700 service stations, for 500 million dollars.

New oil route to the Caucasus, Turkey has attracted the favours of the Socar, the national company of Azerbaijan, which holds 25% of the Bakou‐Tbilissi‐ Ceyhan oil pipeline.

The Bakou company has put on the table 5 billion dollars to bolster the production capacity of Petkim, a 51% Turkish‐controlled petro‐chemical group.

The Turkish State put an end to more monopolies in 2008, starting by that of tobacco and alcohol: Tekel has been privatised to the benefit of the British American Tobacco (BAT), for the handsome sum of 1.72 billion dollars.

Foreign investments in the Med region in 2008

Cyprus: full steam ahead!

By attracting 18 FDI projects in 2008, Cyprus made its best score since 2003.

For Nicosia, GDP growth should be maintained at 3% in 2009, well above the average of the other 27 EU countries.

According to the ANIMA‐MIPO observatory, more than one billion euros should be injected into the Cypriot economy by foreign investors in 2008 (projects totalling 1.8 billion euros in gross announced budgets) .

The yachting sector turned over a new leaf in 2008, and prestigious real estate projects are multiplying:

. Bouygues, Carnival‐Costa Cruises and Amsterdam Harbour carried off a DBFO contract to re‐develop the Larnaca sea front, a new cruise liner port and a marina(1st phase);

. The real estate investment fund Dolphin Capital Partners has created Venus Rock Golf, a luxury residential and tourist project at Paphos;

. The British promoter Blue C Developments is launching Whiterocks, a luxury tourist and residential project in the northern part of Cyprus.

Five projects have gone to the banking sector, with notably:

. The British Point Nine, supplier of back and middle office services for the financial industry, which has opened an office in Limassol;

. The Swiss banker, EFG Group which has received authorisation from the Central Bank to create a local subsidiary;

. The Irish company IFG which has taken over Excel‐Serve Management for 25 million euros.

Foreign direct investments in the Med region in 2008

Malta: high tech propulsion

Malta received fewer FDI projects this year compared with 2007 ( 11 projects against 15 projects last year).

To compensate the expected drop in the number of foreign visitors in 2009 (a key sector which represents 25% of the national annual wealth), Malta wants to put the accent, apart from high tech industries and services, on the less volatile luxury tourism, cruises and the yachting industry. The message has been heard by foreign investors:

. Camper & Nicholsons International, a French provider of services for yachting is relocating its Head Office to Malta, in the Vittoriosa yacht marina, near Valetta;

. The diesel propulsion arm of the German Tognum as well as Sunseeker International, the famous yacht brand, are joining the MARSEC‐XL cluster to participate in its research activities on yacht engines;

Newly arrived on the island, the Gulf State investors are taking their marks in real estate and the new technologies:

. The Kuwaiti Massaleh Development Co is investing 100 million euros in a residential and commercial project on the site of Mistra Village at Xemxija;

. The Emirates’ Tecom and Sama Dubai are starting work on the construction of Phase 1 of the SmartCity Malta project, a business park dedicated to ICT.

4. Annexes Annex 1. List of detected projects in 2008 (ANIMA-MIPO)

When available, FDI amounts are included to this graph, which corresponds to the foreign share in the total gross budget of the project as announced by its promoters.

FDI Host Investor Origin Project Sector Jobs €m PRECO to establish a new chicken farm Palest. PADICO / Agro‐ Jordan and modern slaughterhouse in the West 13 ‐ Auth. PRECO business Bank Jordan The Jordan Engineers Associationʹs Palest. Engineers (JEA) Palestine Committee is to build a Jordan Other 19 20 Auth. Association JOD20 million hospital in Qabatya in (JEA) Jenin The Palestinian‐Jordanian‐Saudi PW, Palest. PADICO / holding to launch leisure, residential Jordan utilities, ‐ ‐ Auth. PRECO and commercial projects in Jerusalem logistics and a housing project in Nablus The group to launch officially the Al‐ Al Rajhi / PW, Palest. Saudi Ersal mix‐use real estate project in Land utilities, 146 ‐ Auth. Arabia Ramallah‐Al Beira, through Arduna, its Holding Co logistics 50‐50 JV with the PIF The Qatari government‐owned Diar to Qatar create Rawabi, a new USD350 million PW, Palest. Investment Qatar West Bank town with local Masar utilities, 152 1 000 Auth. Authority / Company and the support of the logistics Diar Portland Fund Jordanian investors to establish Watan, Cement, Palest. a new holding company, which will Watan Jordan glass, 66 ‐ Auth. focus on setting building materials minerals plants US‐based IT group to invest USD 10 Palest. Cisco Electr. USA mln in venture capital investments in 7 ‐ Auth. Systems hardware technological projects in Palestine The start‐up, backed by Benchmark Palest. Capital, to develop G.ho.st, a free web‐ G.ho.st Inc Israel Software ‐ 35 Auth. based virtual computer, partly thanks to 35 developers based in Palestine Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The Denver‐headquartered provider of TouchStar communications solutions to open a Palest. Software USA 500‐positions call centre in East Software 1 500 Auth. Corporation Jerusalem for Arabic‐speaking MENA customers Dutch brewer to acquire Algerian Mehri Nether‐ groupʹs beer division, Tango, and Agro‐ Algeria Heineken ‐ ‐ lands launch local production of its own business brand in 2008 Nestlé / Société Source de Taberkachent, a 51/49 Nestlé Switzer JV of Nestlé with the Zahaf brothers, to Agro‐ Algeria ‐ 30 Waters ‐land inaugurate the first mineral water business Algérie bottling facility in Maghreb The investment company to create EIIC / Agro‐ Algeria UAE Mahassiaʹs greatest dairy farm, in 132 500 Mahassil business Hamadia Zonda / Thanks to a partnership with Yancheng Yancheng Zhongwei, Zondaʹs autobus branch, Auto‐ Algeria Zhongwei China ‐ ‐ local Fandi Motors opened an assembly motive Passenger facility in Mohammadia Coach Co Chinaʹs Shaanxi Automobile Group to Shaanxi ink a USD100 mln contract with Auto‐ Algeria Automobile China 68 4 000 Algeriaʹs GM Trade to set up a vehicle motive Group assembly unit in Setif city, by 2010 The group to open 12 professional training centres in 2008, in partnership Algeria Pigier France Other ‐ ‐ with the Algerian Chamber of Commerce and Industry (CACI) Opening of the 1st private ophthalmic hospital by Cuban investors, in Djelfa, Algeria Unknown Cuba Other 13 10 and planned openings in Béchar, Ouargla and El‐Oued The Paris‐based bank inaugurates two Bank & Algeria BNP Paribas France ‐ ‐ new agencies in Oran insurance The financial consultancy to partner Hiram with Algeriaʹs financial service provider Bank & Algeria France ‐ ‐ Finance Humilis Corporate Finance in order to insurance advise French firms in Algeria Compagnie The financial services company to set Gestion et up Compagnie Financière dʹAlgérie Bank & Algeria Tunisia ‐ ‐ Finances (CFA), a subsidiary recently authorised insurance (CGF) to offer brokerage services

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The Catalan insurance group to form Fiatc Bank & Algeria Spain with local CAAT a JV dedicated to life 2 ‐ Seguros insurance and health insurance Société Creation of a joint investment holding, algéro‐ Saudi co‐sponsored by Algeria and Saudi Bank & Algeria saoudienne 21 ‐ Arabia Arabia, with a paid capital of DZD 4 insurance dʹinvestis‐ billion (50/50) sement The bank to inaugurate its first branch in the city of Mostaganem and to plan Bank & Algeria BNP Paribas France ‐ 5 further openings in Tlemcen and Sidi insurance Bel Abbès La Caixa + The subsidiary of Franceʹs Suez and PW, Algeria Suez / Spain Spainʹs La Caixa wins a contract for the utilities, ‐ ‐ AGBAR operation of Oran water supply logistics Swiss logistics group to handle the PW, Kuehne & Switzer supply of Legrand products to clients in Algeria utilities, ‐ ‐ Nagel ‐land Algeria thanks to a 2,000 sqm facility in logistics the Algiers area UAE‐based company to set up a local PW, Al Qudra subsidiary as a prelude to the creation Algeria UAE utilities, ‐ ‐ Holding of a large‐scale mixed‐used complex in logistics Sidi Fredj (near Algiers) The rail construction and maintenance PW, Bouygues / branch of French public works group to Algeria France utilities, ‐ ‐ Colas Rail create a local subsidiary with a view to logistics bidding for local tenders A consortium led by the British PW, specialist in water treatment to get a Algeria Biwater UK utilities, 39 ‐ 51% stake in the JV formed to build and logistics operate Oued Sep desalination plant Abengoaʹs Befesa Agua to build Tenes PW, Abengoa / desalination plant under a BOT Algeria Spain utilities, 98 ‐ Befesa Agua contract, through a 51‐49 JV with logistics Algerian Energy Company The company forms a 51/49 JV with PW, Singa‐ Algerian Energy Company to develop a Algeria Hyflux utilities, 158 ‐ pore BOT desalination plant in Magtaa near logistics Oran The investment company to invest USD EIIC / PW, 5 bn over 5 years to develop Dounya Algeria Bloom UAE utilities, 3 289 ‐ Parc, a mixed‐use project in the Grands Properties logistics Vents district of Algiers

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The Dubai‐based ship‐owner to Gulf Agency PW, establish in Algiers and to create GAC Algeria Company UAE utilities, ‐ 10 Algeria, a ship agency providing (GAC) logistics logistics assistance Heneiné The Lebanese company to create a PW, entreprises Leba‐ Algeria mixed‐used complex named Résidence utilities, 120 20 générales non des Pins logistics (HEG) The company creates a 50/50 JV with the Dubai PW, DjenDjen Port Authority to operate and Algeria World / DP UAE utilities, 42 50 expand the port infrastructures under a World logistics 30‐years concession The company creates a 50/50 JV with the Dubai PW, Algiers Port Authority to operate, Algeria World / DP UAE utilities, 42 70 develop and expand the main container World logistics terminal at the port of Algiers Snasco / The Jeddah‐based property developer PW, Saudi Algeria Snasco‐ to launch with Algerian EPLF a utilities, 400 150 Arabia Algérie residential project in Oran logistics Swicorp / Altea Packaging to set up CogitelA, a Saudi Algeria Altea local subsidiary in charge of a new Chemicals 10 ‐ Arabia Packaging plastic packaging factory in Constantine The France‐based company that supplies industrial and medical gases to Algeria Air Liquide France Chemicals 200 ‐ purchase Algeriaʹs Cevital and plans to invest USD 200 million by 2012 The group teams up with Algeriaʹs Petroser for the production and sale of Algeria BP UK Chemicals 5 50 lubricants, to be produced by a new plant in Oran Villa Mir / The company to form Lʹentreprise Fertiberia / forme El Bahia Fertilizers, a 51/49 JV Algeria Spain Chemicals 335 130 El Bahia with Sonatrach to set up an ammonia Fertilizers plant in Arzew and market its products Suhail El Djazairia El Omania Lil Asmida, the Bahwan 51/49 JV of the Oman‐based group and Algeria Group Oman Sonatrach, to set up an urea and Chemicals 805 200 Holding ammonia factory in Mers El Hadjad, (SBGH) Arzew The Saudi group, engaged in Cement, Pharaon / Saudi manufacturing and trading of cement, is Algeria glass, ‐ ‐ SCIBS Arabia to finance the building of a second minerals cement factory in Béni Saf

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Canadaʹs Cancor acquires a new Cement, Algeria Cancor Canada prospection licence for gold in Tan glass, ‐ ‐ Chaffao East minerals The Canadian mining company wins Cement, another gold exploration license in the Algeria Cancor Canada glass, 1 ‐ Tamanrasset region, this time for the minerals Tirek‐Amessemassa site Poulina / Carthago Ceramic, subsidiary of Cement, Algeria Carthago Tunisia Poulina, to build a new plant in Sétif‐ glass, 15 ‐ Ceramic Hammam Skhouna for TND 27 million minerals French building material giant to become a strategic partner of the Cement, Algeria Lafarge France government by taking a 35% stake in glass, 44 ‐ ERCC, which owns the Meftah cement minerals factory The group is to create a new cement Cement, plant in Oum El Bouaghi, located near Algeria Lafarge France glass, 152 45 the city of Aïn Beida (close to the border minerals with Tunisia) The Riyadh‐headquartered investment Swicorp / Saudi firm to buy a stake into Petroser, a fuel Algeria Energy ‐ ‐ Intaj Capital Arabia and related products distribution and production company Abu Dhabiʹs state investment arm to Mubadala buy a 15% interest in Royal Dutch Shell Algeria Develop‐ UAE Energy ‐ ‐ and Sonatrachʹs Reggane Djebel Hirane ment and Zerafa concessions Irish energy group to be granted new Algeria Petroceltic Ireland permit for the Isarene site in northern Energy ‐ ‐ Algeria The German company inaugurates a E.ON Germa‐ Algeria representative office in Algiers and Energy ‐ ‐ Ruhrgas ny envisages to open a new office in Libya The energy group was awarded the Algeria ENI Italy Kerzak exploration licence, in the Energy ‐ ‐ Timimoun Basin, in south west Algeria The group to acquire a 100% of First Calgary Petroleumʹs oil and gas assets, Algeria ENI Italy Energy ‐ ‐ including its USD1.3 bn programme in the Berkine basin The Canadian energy group announces Talisman millions of dollars of capital Algeria Canada Energy 7 ‐ Energy expenditure for its developments in Algeria

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The group to invest USD 50 million in Gulf exploration and production projects in 5 Algeria Keystone UK Energy 33 ‐ blocks around Bechar, in southern Petroleum Algeria Schlum‐ berger / The Houston‐based firm to partner with Sahara Well Sonatrachʹs Enafor to create Sahara Well Algeria USA Energy ‐ 20 Constru‐ Construction Services, a company ction specialising in oil well drilling Services General The producer of cable products to buy a Cable 70% stake in State‐run company Enica Electr. Algeria USA ‐ ‐ Corporation Biskra, a manufacturer of power and hardware (GCC) construction ca Phone‐ French telemarketing software specialist Algeria France Software ‐ ‐ Control to create a subsidiary in Algiers The California‐based company hires 20 Cisco Algeria USA new employees in 2008 to adress strong Software ‐ 20 Systems local growth The pharmaceutical giant to buyback Algeria Pfizer USA State‐run Saidalʹs 30% stake in Pfizer Drugs 3 ‐ Saidal Manufacturing, their local JV Icelandʹs generic drugs champion to expand on North African markets Algeria Actavis Iceland through a packaging and distribution Drugs ‐ 15 JV with Laboratoire Pharmaceutique Algerien The company teams up with a local Recyclex / partner to form Eco Recyclage, to run a Meta‐ Algeria Eco France ‐ 15 facility recycling automotive batteries in llurgy Recyclage Aïn Ouassara The Egyptian manufacturer of electric El Sewedy Meta‐ Algeria Egypt equipment to set up a USD 50 mln cable 33 250 Cables llurgy factory in the region of Aïn Defla The investment company to set up EIIC / Cablet El Djazair, a subsidiary of Meta‐ Algeria Electrocab UAE 61 250 Electrocab Emarat, which will llurgy Emarat manufacture electric cables The French provider of equipment and Consul‐ services for telecom and corporate Algeria TIBCO France ting & ‐ ‐ networks to set up ʹTibco solutions services réseauxʹ, a 2nd Algerian subsidiary The engineering group, specialised in Consul‐ G Environ‐ Algeria France environmental studies, to set a ting & ‐ 2 nemenT subsidiary in Algiers services

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Memac‐Ogilvy, part of the WPP / Consul‐ advertisement and communication Algeria Memac‐ Ireland ting & ‐ 12 giant WPP, to open an office in Algiers Ogilvy services employing 12 people Consul‐ Ernst & The audit and consulting firm to open Algeria UK ting & ‐ 25 Young its first office in Algiers, creating 25 jobs services Food&Beverage international, an Food & association of local, Spanish and Leba‐ Tourism, Algeria Beverage Lebanses businessmen to create their 1 50 non catering Int’al first Crossroads restaurant in el Biar, Algier The investment company to invest USD Tourism, Algeria EIIC UAE 200 mln in a tourism project in Moretti‐ 132 478 catering Club des Pins, due to open by 2011 Marfin Marfin Investment Groupʹs health Investment services arm Hygeia to acquire Cyprus Group Greece Other ‐ ‐ Evangelismos, which runs a modern (MIG) / maternity clinic in Paphos Hygeia The London‐based provider of middle Bank & Cyprus Point Nine UK and back office services for the financial ‐ ‐ insurance industry to open an office in Limassol The Jersey‐based Lloyds subsidiary to Lloyds / recruit significantly for its branch in Bank & Cyprus Lloyds TSB UK ‐ ‐ Limassol to address a strong demand insurance Offshore from British expats The Dublin‐based company to acquire Bank & Cyprus IFG Ireland Excel‐Serve Management for a sum of 25 ‐ insurance EUR 25 million The group acquires a 50.1% shareholding in Cyprus‐based Marfin CNP Bank & Cyprus France Popular Bankʹs insurance business, 100 ‐ Assurances insurance including Laiki Cyprialife and Laiki Insurance EFG Group / Eurobank EFG, part of the Swiss EFG Switzer financial group EFG, to get the Bank & Cyprus ‐ 20 Eurobank ‐land necessary license to set up a wholesale insurance Ergasias banking subsidiary in Cyprus The British promoter to launch Blue C PW, Whiterocks development, a luxury Cyprus Develop‐ UK utilities, ‐ ‐ tourism and residential project in ments logistics Northern Cyprus

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Dolphin The real estate fund to create Venus PW, Cyprus Capital UK Rock Golf, a luxury leisure‐integrated utilities, ‐ ‐ Partners residential development in Paphos logistics Dolphin Aristo Developers, part of the Dolphin PW, Capital / Capital Partners group, to develop Cyprus UK utilities, ‐ ‐ Aristo Agnades Village, a residential complex logistics Developers near the new Limassol Marina Granite Hacarmel / Global Environmental Solutions has a PW, Global 60% stake in the consortium which will Cyprus Israel utilities, 7 ‐ Enviro‐ invest under a BOT contract USD 11 logistics nmental mln in Famagusta desalination plant Solutions The construction group to hold directly PW, J&P ‐ Avax + Cyprus Greece and indirectly a 30% stake in the BOT utilities, 21 ‐ Athena contract for Paphosʹ new marina project logistics The construction group to hold directly PW, J&P ‐ Avax + and indirectly a 31% stake in the 53‐ Cyprus UK utilities, 53 ‐ Athena years BOT concession for Limassolʹs logistics new marina project Bouygues + The Zenon Consortium won the DBFO Carnival‐ contract for the Larnaca Seafront PW, Costa Other Cyprus redevelopment, whose 1st phase utilities, 1 000 ‐ Cruises + country consists in creating a cruise port and logistics Amsterdam marina Harbour The group to acquire a 90% interest in Cement, Northern an exploration permit in the Paphos Cyprus Canada glass, 2 ‐ Lion Gold district, and seek to acquire an minerals additional 7 permits The leading provider of equipment and Mechanics Weatherford services for hydrocarbon exploration to Cyprus USA & ‐ 70 Int’al set up a manufacturing and services machinery facility in Larnaca Free Zone The Luxembourg‐registered group Evraz Luxem‐ controlled by R.Abramovich to take Meta‐ Cyprus 592 ‐ Group burg control of Palmrose which owns steel, llurgy iron ore and coke assets in Ukraine Over‐ Swedish operator OverHorizon to win Cyprus Sweden Telecom ‐ ‐ Horizon Cyprusʹ second satellite license The group to offer 49% of MTN Cyprus South to local Amaracos, and get in return Cyprus MTN Telecom ‐ ‐ Africa 100% of Otenet (fixed telephony and ISP), plus Infotel (handset shops chain)

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Indiaʹs soft‐drink leading brand to open Agro‐ Egypt Rasna India ‐ ‐ a new plant in Egypt by October 2008 business The London‐based private equity firm Agro‐ Egypt Actis UK to inject USD 48.5 million into Egyptʹs 32 ‐ business food company Moʹmen The Saudi Arabian agrofood company Saudi to buy a majority stake in Egyptʹs dairy Agro‐ Egypt Al Marai 74 ‐ Arabia products group Beyti for EGP 600 business million Concord Int’al A subsidiary of the NY‐based fund Investments Concord International Investments to Egypt USA Furnishing ‐ ‐ / Coral acquire a 8.16% stake in Lecico, an Growth Egyptian sanitary ware manufacturer Investments The Saudi company to acquire a 5% Saudi Egypt Fitaihi stake in Egyptʹs Oriental Weavers for Furnishing 19 ‐ Arabia LE 153 million Russia‐based manufacturer of famous AvtoVaz / Lada cars to team up with local Al Amal Auto‐ Egypt Russia ‐ ‐ Lada Group for the assembly of Lada off‐road motive vehicles The Sabanciʹs subsidiary, already Sabanci / established in 10th of Ramadan city Auto‐ Egypt Turkey ‐ 20 Temsa since 2006, to open an after‐sales and motive spare parts centre in 6th of October City Brazilʹs Marcopolo to team up with Egyptian auto importer and Auto‐ Egypt Marcopolo Brazil 23 100 manufacturer Ghabbour to set up a motive 49/51 JV bus assembly plant in Suez Pirelli / The group is to increase for USD 65 mln Alexandria production capacity of radial tyres for Auto‐ Egypt Italy 43 200 Tyre trucks and buses at its Alexandria motive Company facility by 50 % General Motors Egypt, in which GM has a 31 % stake and management General Auto‐ Egypt USA responsibility, to inaugurate a new 22 300 Motors motive paint shop at its plant in 6th of October city National The private equity fund of National Bank of Bank of Kuwait to create a branch in Bank & Egypt Kuwait ‐ ‐ Kuweit / Cairo in order to develop its activities in insurance NBK Capital the country

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m National The State‐owned bank to acquire a 70% Bank of Abu Bank & Egypt UAE stake in Egyptʹs Al Salam Brokerage ‐ ‐ Dhabi insurance company (NBAD) National La banque koweitienne va créer 26 Bank of nouvelles agences de sa filiale Bank & Egypt Kuwait ‐ ‐ Kuwait / Al égyptienne Al Watany en 2 ans, insurance Watany doublant la taille de son réseau Global The Kuwait‐based asset management Bank & Egypt Investment Kuwait and investment banking company to set ‐ ‐ insurance House up an Egyptian subsidiary The Kuwait‐based company to acquire Global Capital Trust Co. in Cairo, an asset Bank & Egypt Investment Kuwait ‐ ‐ manager, and Misr International insurance House Securities a broker in Alexandria Al Ghurair Dubaiʹs largest bank by market value to Group / become a true local retail bank by Bank & Egypt UAE ‐ ‐ Mashreq‐ opening 30 branches over the next 3 to 4 insurance bank years from its current 5 branches Egypt Kuwait Tokio Marine & Nichido, a member of Other Bank & Egypt Holding + Japanʹs Millea Group, to get a 40% stake 4 ‐ country insurance Millea‐Tokio in 2 insurance companies Marine Ithmaar The Bahrain‐based Group, an Islamic bank / insurance company part of Ithmaar Bank & Egypt UAE 7 ‐ Solidarity Banking Group, to set up Solidarity insurance Group Family Takaful Egypt in Cairo Blom Bank Egypt, a member of the Leba‐ Lebanese Blom Group, to increase its Bank & Egypt Blom Bank 31 ‐ non paid‐up capital to 750 million EGP from insurance 500 million EGP through a share issue Dubai Dubai Groupʹs investment arm to buy a Group / 5.24% stake in Egyptʹs Commercial Bank & Egypt Dubai UAE 140 ‐ International Bank (CIB) for EUR 140 insurance Capital million Group The subsidiary of Franceʹs Natixis to Natixis / acquire Egypt‐based Fiani Partners and Bank & Egypt France ‐ 5 Coface to create a local subsidiary named insurance Coface Egypt The UK‐based bank expands its Bank & Egypt HSBC UK territorial coverage by opening 20 new ‐ 50 insurance branches

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The Egyptian subsidiary of the state‐ National owned bank to open eight new Bank & Egypt Bank of Abu UAE ‐ 150 branches to take the total to 30 by the insurance Dhabi end 2008 The biotech company teams up with Egyptʹs Fine Seeds International in Biotechnol Egypt Monsanto Egypt ‐ ‐ order to develop and distribute a new ogies variety of genetically modified maize The American investment bank to buy a PW, Goldman Egypt USA 5.5% stake in Egyptʹs real estate utilities, ‐ ‐ Sachs company Palm Hills Development logistics HSBC + MENA Infras‐tructure Fund (MENAIF), Dubai Int’al PW, an UAE‐based fund to acquire a Egypt Capital + UAE utilities, ‐ ‐ minority stake in Alexandria Waha logistics International Container Terminals Capital Michaniki / Michaniki Greek firm to raise the capital of its local PW, Egypt Real Egypt Greece subsidiary to EUR 20 mln and plan new utilities, 13 ‐ Estate and projects in Cairo and northern Egypt logistics Tourism Enterprises The Dubai‐based port operator to buy a Dubai PW, 90% stake in Sokhna Port for USD670 Egypt World / DP UAE utilities, 441 ‐ mln, and invest a further USD 1.3 bn World logistics over 3 years in its expansion The property developer, already present PW, Habiba Real in Sharm El Sheikh since 2006, Egypt UAE utilities, ‐ 13 Estate inaugurates its regional office in Cairo, logistics employing 13 people The Dubai‐based logistician to PW, Aramex Egypt UAE inaugurate a new logistics center in utilities, ‐ 20 PJSC Cairo logistics The company to create a business PW, Cayan district named Capital Business Park Egypt UAE utilities, 320 475 Investment (Greater Cairo) in partnership with logistics Egypt‐based Dorra Qatar The property firm to launch its Cairo‐ PW, Investment based Nile Corniche project, a luxurious Egypt Qatar utilities, 658 1 000 Authority residential complex situated on the east logistics (QIA) / Diar bank of the Nile The American manufacturer of adhesives to acquire Egymelt, a Cairo‐ Egypt H.B. Fuller USA Chemicals 3 ‐ based producer of hot melt and specialty water‐based adhesives

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Saudi conglomerate to pay 51.7 mln Saudi riyals (USD13.8 mln) to raise its stake in Egypt Savola Chemicals 9 ‐ Arabia Egyptian plastics manufacturer New Marina Plast to 95% up from 70% The Greek company to invest USD 100 mln for a 5% share of a new phosphate Egypt Indagro Greece Chemicals 66 ‐ fertilisers complex to be build in Aswan and due to start production in 2011 The US company to invest USD 100 mln Agrifos for a 5% share of a new phosphate Egypt USA Chemicals 66 ‐ Fertilizer fertilisers complex to be build in Aswan and due to start production in 2011 Agrium to take a 26% stake in MISR Oil Agrium / Processing Co (MOPCO), a fertiliser Egypt Canada Chemicals 184 ‐ EAgrium producer which will in return buy EAgriumʹs planned developments The chemicals maker to benefit from the total privatisation of Alexandria Bel‐ Egypt Solvay Sodium Carbonate Company (ASCC), Chemicals 100 20 gium whose production capacity will be increased Cement, Klondike The mining group to start exploration of Egypt Canada glass, ‐ ‐ Star Mineral its Oweinat exclusive gold concession minerals The company, created by Swicorp and Swicorp / Cement, Saudi Tuninvest, with the aim of making Egypt Altea glass, ‐ ‐ Arabia several acquisitions in the packaging Packaging minerals sector, to purchase Egyptʹs Porta The firm, created by Swicorp and Swicorp / Cement, Saudi Tuninvest, with the aim of making Egypt Altea glass, ‐ ‐ Arabia several acquisitions in the packaging Packaging minerals sector, to purchase Egyptʹs Rotopack Al Thani The UAE‐based group to invest USD 4 Cement, Group / Egypt UAE million in gold and mineral exploration glass, 3 ‐ Thani Dubai in the Eastern desert minerals Mining Dubai Dubai Group to acquire a 49% stake in Holding / Cement, Egyptʹs Sphinx Glass Company, which Egypt Dubai UAE glass, 130 ‐ is setting up a greenfield float glass Capital minerals manufacturing facility Group The group to acquire 50% of the 50/50 Titan Cement, JV created in 1999 with Lafarge in Egypt Cement Greece glass, 330 ‐ Egypt, which counts on 2 cement plants Group minerals in Alexandria and Beni Suef

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Saudi The group to establish CPC Holding for Cement, BinLadin Saudi Investment‐Egypt, its 2nd Egyptian Egypt glass, 82 2 500 Group Arabia subsidiary, to set up a complex of 7 minerals (SBG) / CPC construction material factories US electronics giant to team up with Elec‐tronic Egyptʹs Boraq for Electronics and Egypt Intel USA compo‐ ‐ ‐ Industries which will assemble locally nents Intel motherboards for regional markets United Planters’ The Indian plantersʹ association to open Association Distri‐ Egypt India India Tea Centre, a promotion and ‐ ‐ of South bution distribution platform in Cairo India (UPASI) Germanyʹs Metro AG to invest EUR 150 Germa‐ Distri‐ Egypt Metro AG mln over 3‐5 years to open up to 10 200 ‐ ny bution supermarkets under the ʹMakroʹ brand Hisense Electronic Egypt China Hisense expands footprints to Egypt ‐ ‐ Group ware Scotland‐based energy company to Melrose double its Egyptian production through Egypt UK Energy ‐ ‐ Resources the drilling of 15 additional wells by the end of 2008 Petrogas, a subsidiary of the Omani MB MB Holding Holding, bought from the Australian Egypt Oman Energy ‐ ‐ / Petrogas Oil Search a 30% share in an oil block located in the Gulf of Suez The company to earn a 40 % interest in Circle Oil / the Gemsa block, operated by UKʹs Egypt Circle Oil Ireland Energy ‐ ‐ Premier Oil (10%) and Greeceʹs Vegas Egypt Oil and Gas (50%) The Australian company to purchase Beach Austra‐ Santos Egyptʹs 20% stake in the South Egypt Petroleum Energy ‐ ‐ lia East July offshore concession in the Gulf Limited of Suez The American construction consulting firm to form with 2 State‐owned Egypt Hill Int’al USA Energy ‐ ‐ companies a JV dedicated to oil and gas projects in MEA markets Arabian Oil, the local subsidiary of the AOC Japanese group, to invest in production Egypt Holdings / Japan Energy ‐ ‐ expansion at the offshore Northwest Arabian Oil October block in the Gulf of Suez

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The London‐based engineering company to open an office in Cairo and Egypt ODE UK Energy ‐ ‐ to create ODE North Africa LLC in Cairo The group to invest USD 12 mln with Anwar El Egyptʹs Ganoub Al Wadi Petroleum Egypt Akad Sons Syria Energy 9 ‐ (Ganope) in exploration on the North Corporation East Esh El Malaha concession The company to acquire an additional TransGlobe 25% stake in its 9 West Gharib Egypt Canada Energy 14 ‐ Energy concessions and become the exclusive operator Gujarat State Petroleum The 3 India‐based oil companies to be Corp awarded as a consortium 2 exploration Egypt (GSPC) + India Energy 35 ‐ permits for blocks 3 South Quseir and 4 Hindustan South Sinai Petroleum Corp + Oil India The Dutch oil and gas company to Nether‐ Egypt Shell invest USD 45 million on exploring Energy 36 ‐ lands north of Damietta Gujarat State Petroleum The two oil companies to be awarded as Corp Egypt India a consortium an exploration permit for Energy 45 ‐ (GSPC) + block 5 Gulf of Suez Adani Welspun Exploration BG‐Edison / Burullus, a JV of BG and Edison with Burullus Other Egypt local EGPC, to rely on Saipem for the Energy 66 ‐ Gas country subsea development of the Sequoia field Company The Australia‐based oil company to Beach Austra‐ acquire a 20% stake in the North Egypt Petroleum Energy 72 ‐ lia Shadwan concession for USD 110 Limited million, in partnership with Egyptʹs EK Egyptian Drilling, equally owned by Maersk / Den‐ Maersk and Egyptʹs EGPC, to invest Egypt Egyptian Energy 72 ‐ mark USD 220 mln in a new offshore jack‐ up Drilling Co rig built by Sembcorp Marine

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Australian energy firm Oil Search has Kuwait sold stakes in three fields in Egypt to Egypt Energy Kuwait Energy 105 ‐ Kuwait Energy Company for Company USD200mln The UAE‐based gas producer to invest Egypt Dana Gas UAE USD 170 million in 15 exploration wells Energy 112 ‐ and four development wells in 2008 Gujarat State The India‐based group to be awarded 2 Egypt Petroleum India oil and gas exploration licences for Energy 371 ‐ Corporation blocks North Hapʹy and South Diyar (GSPC) The 3 European companies to invest BP + RWE + together USD 800 million to drill Egypt UK Energy 714 ‐ Shell deepwater wells on 2 blocks off Alexandria The oil company to invest USD 3.5 Groundstar million in drillings for the West Esh El Egypt Canada Energy 2 5 Resources Mallaha block, in which it has a 20% interest The Italy‐based energy company was Egypt Edison Italy granted a license to develop the Energy 1 10 Abuquir natural‐gas field Creation of a 200‐position factory Czech producing biofuel from rice straw in the Egypt Unknown Repu‐ Energy ‐ 200 governorate of Sharquya, in partnership blic with Czech ACCM, an IT subsidiary created by M.A. M.A. Kharafi Group, eventually teams Electr. Egypt Kharafi Kuwait up with Daewoo Electronics Corp to 1 20 hardware Group manufacture laptop computers under license A consortium led by VCBank, and including EuroMena Fund and Franceʹs Egypt VCBank Bahraïn Proparco to buy 79% of software Software ‐ ‐ company ITWorx, and fund its regional development The provider of integrated IT solutions IDS Egypt India for the hospitality industry to open a Software ‐ ‐ Softwares new regional office in Egypt The software testing specialist to create Germa‐ in partnership with State agency ITIDA Egypt SQS Group Software ‐ 500 ny a 500‐position service centre for German‐speaking customers

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The US‐based group to create a global centre providing business expertise and Egypt IBM USA Software ‐ 1 000 software development services, employing 1 000 staffs at last The technology company to form with local oil companies ENPPI and GASCO, Mechanics Egypt Invensys UK Invensys Process System Egypt, a JV & ‐ ‐ industrial automation engineering machinery centre The Dubaï‐based private equity group Abraaj Egypt UAE to acquire a 76.9 % stake in Egyptian Drugs ‐ ‐ Capital medical laboratories Al Borg Laboratory The company to inaugurate its third production unit in Sadate City aiming at Egypt Marico India Drugs ‐ ‐ providing MENA markets with cosmetics The Danish asset management company Den‐ Egypt BankInvest to acquire a 10% stake in Minapharm Drugs 9 ‐ mark Pharmaceuticals for USD12.6 million Hikma The Amman‐based pharmaceutical Egypt Pharma‐ Jordan company to acquire Egyptʹs Alkan Drugs 44 ‐ ceuticals Pharma, renamed as Hikma Pharma The healthcare giant to acquire the GlaxoSmith mature off‐patent drugs business of Egypt UK Drugs 138 ‐ Kline Bristol‐Myers Squibb in Egypt, including a manufacturing plant in Giza Kuwait Pipe The Kuwait‐based pipeline specialist to Industries buy 25% stake in International Pipe Meta‐ Egypt and Oil Kuwait 13 ‐ Industry Company, dominated by llurgy Services Egypt Kuwait Holding (KPIOS) The giant steelmaker to obtain a license Arcelor‐ Meta‐ Egypt India for the construction and operation of a 42 ‐ Mittal llurgy greenfield steel plant The US‐based group specialising in Consul‐ human resources and customer Egypt Convergys USA ting & ‐ ‐ relationship management to open an services office in Smart Village Cairo The group to form a 50/50 JV with Consul‐ Egyptʹs Talaat Moustafa Group, in Egypt Hill Int’al USA ting & ‐ ‐ order to provide construction project services management services

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The London‐based company specialising in recruiting high profile Consul‐ Egypt Antal Int’al UK managers to open its first Egyptian ting & ‐ ‐ agency in Giza (20 km southwest of services Cairo) The company to form with local Echem Consul‐ Maire Egypt Italy and Petrojet a JV providing engineering ting & ‐ 10 Tecnimont and industrial management services services Saudi The Jeddah‐headquartered company to Consul‐ BinLadin Saudi Egypt set up an architectural and engineering ting & ‐ 200 Group Arabia design company in Cairo named ʹFocusʹ services (SBG) / CPC Etisalat to acquire from Telecom Egypt Egypt Etisalat UAE a 27.3% stake in Nile Online and 16.5% Telecom ‐ ‐ in EgyNet, 2 internet service providers The Egyptian subsidiary of UKʹs Vodafone / Vodafone to acquire a majority stake in Egypt Vodafone UK Sarmady Communications, a Cairo‐ Telecom ‐ ‐ Egypt based group providing digital media services The subsidiary of UAE‐based State‐run ADIC / investment fund to acquire OrasInvest, ADIC Egypt UAE a firm specialising in Telecom 137 ‐ MENA telecommunications, logistics and Partners construction France France Telecomʹs JV with Orascom to Egypt Telecom / France invest a total EGP 7.3 billion over 2007‐ Telecom 638 ‐ Mobilnil 2008 in expanding its 3G network Vodafone / The telecom company to open in Cairo a Egypt Vodafone UK 500‐position customer service call centre Telecom ‐ 500 UK to serve its British customers Aditya Birla Grasim Industriesʹ Birla Cellulose to / Grasim invest EUR 129 mln in creating a new Egypt Industries / India Textile 129 ‐ viscose staple fibre plant in Alexandria Birla to serve European markets Cellulose The Egyptian‐ Chinese The Chinese‐Egyptian JV to inaugurate Egypt Enterprise China an unwoven cloth factory in the North Textile 10 250 for Suez Gulf exclusive zone Unwoven Cloth

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Egyptian Turkish Turkish investors to inaugurate a ready‐ Company made clothes factory committed to Egypt Turkey Textile 13 2 500 for Ready‐ exportation in the industrial zone of made Kafr El Dawar Garments The group obtains from Egyptʹs Misr Hotels Company the management of Tourism, Egypt Ritz‐Carlton USA ‐ 35 the Historic Nile Hilton Hotel, for a 20‐ catering year period UAE‐based Almahmoud obtains the Almah‐ master franchise from US coffee chain Tourism, Egypt moud UAE ‐ 50 Port City Java for Egypt and will open catering Group 20 stores by 2013 The UAEʹs property developer to create Emaar Tourism, Egypt UAE a luxurious 150‐room resort and 50 1 217 200 Properties catering private villas in Marassi Qatar The property developer to create a Investment luxurious resort complex in Sharm El Tourism, Egypt Qatar 216 300 Authority Sheikh that includes a 5 star hotel and catering (QIA) / Diar several entertainment facilities Texas The Texas‐based company to invest Pacific USD 293 mln to buy a 25,1% stake in Agro‐ Israel Group USA 193 ‐ Strauss Coffee, part of Israeli Strauss business Capital Group (TPG) Barclays / Barclays Capital to launch operations in Bank & Israel Barclays UK Israel by taking over Lehman Brothersʹ ‐ ‐ insurance Capital local operations and staff York Capital U.S. investment fund York Capital to Bank & Israel Manage‐ USA buy a minority stake in Bank Hapoalim ‐ ‐ insurance ment worth NIS 735 million The Houston‐based financial group Stanford plans to invest USD 10 million in Bank & Israel Financial USA 7 ‐ AquaAgro Fund L.P, an Israeli insurance Group technology venture capital fund The specialist in surgical cryoablation to merge with its Israeli counterpart Galil Biotechnol Israel Endocare USA ‐ ‐ Medical, in order to consolidate their ogies R&D efforts American seed producer to invest Biotechnol Israel Monsanto USA USD18 mln in Israeli biotech company 12 ‐ ogies Evogene

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The company specialising in the Johnson & conception and production of medical Biotechnol Israel USA 337 ‐ Johnson devices to acquire Omrix, a company ogies focusing on biosurgical products Alexander Nesisʹ East investment group Alexander PW, to acquire a 22% stake in Tel‐Aviv‐listed Israel Nesis / East Russia utilities, ‐ ‐ construction engineering company investment logistics Baran Group Plainfield American assets manager to take a 10% PW, Asset Israel USA stake in Mainrom Line Logistics, a utilities, 2 ‐ Manage‐ shipping and logistics company logistics ment The group is to create its own training PW, and R&D centre, to be located in the Israel Veolia France utilities, 12 50 Ruppin Academic Center, in Emek logistics Hefer The Canadian fertiliser manufacturer to Potash Corp increase its participation in Israel Israel Canada Chemicals ‐ ‐ (PCS) Chemicals, a major industrial company headquartered in Tel Aviv US investment fund Fidelity to buy a 5.2% stake in Israel Chemicals, a Israel Fidelity USA Chemicals 814 ‐ fertilisers and specialty chemicals producer The venture fund to invest, in Elec‐tronic Kreos Israel UK partnership with Silicon Valley Bank, in compo‐ 3 ‐ capital Oree, a specialist of LED applications nents Samsung/ The technology‐focused investment Elec‐tronic Samsung South firm owned by Korea‐based Samsung to Israel compo‐ 3 ‐ Ventures Korea invest several millions in micro nents Investment components China The Taiwan‐based venture capital fund Investment Elec‐tronic to invest USD 6 million in Israelʹs Israel & Develop‐ Taiwan compo‐ 4 ‐ Advasense, a company focusing on ment nents image sensors for mobile phones (CIDC) The chipmakers Intel & Numonyx to Elec‐tronic create a wastewater treatment facility Israel Intel USA compo‐ 14 ‐ on their Kiryat Gat facilities which will nents recycle water for agricultural uses Fabless chip maker Altair Pacific Semiconductor Ltd. has raised $22 Elec‐tronic Israel Technology Japan million in its third financing round led compo‐ 15 ‐ Fund by Japanese venture capital fund Pacific nents Technolo

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Susque‐ The fond to invest with other VC USD hanna Int’al 24 million in Wisair, a producer of Elec‐tronic Group (SIG) Israel USA single‐chip based Ultra Wideband compo‐ 16 ‐ + Advent (UWB) and Wireless USB (WUSB) nents Ventures + solutions alias The chipmaker to have new Elec‐tronic headquarters built in Haifa for its local Israel Intel USA compo‐ 55 ‐ subsidiary, using green building nents techniques Cadence The electronic design automation (EDA) Elec‐tronic Israel Design USA software and hardware specialist to compo‐ 207 ‐ Systems acquire Chip Estimate Corp nents IBM is opening a new R&D Lab in Elec‐tronic Israel, dedicated to the development of Israel IBM USA compo‐ ‐ 100 data storage, chip development and nents technologies in logistic circuit design The manufacturer of photovoltaic Suntech equipements to partner with local Israel Power China Energy ‐ ‐ Solarit Doral in order to create Israelʹs Holdings largest solar power station Midwest The US‐based institute partners with Research Israelʹs Rotem Industries to create a Israel USA Energy ‐ ‐ Institute renewable energy technological center (MRI) in the Rotem Industrial Park (Dimona) TomCo London‐based energy group to acquire Energy / a 50% interest in the Heletz‐Blur‐ Israel UK Energy 4 ‐ Luton‐ Kokhav Licence and a 25% interest in Kennedy Iris License from Avenue Group The London‐based firm invests USD 105 Israel Ecofin UK million to buy a 40% stake in Israeli Energy 69 ‐ solar company Solel Bright Luz II, the Israeli subsidiary of a US Source solar energy company, to inaugurate its Israel USA Energy 53 15 Energy / experimental centre in the Negevʹs Luz II Rotem Industrial Park The Texas‐based company holds a 33% Noble Israel USA stake in the gas block Tamar 1 which is Energy 37 25 Energy operated jointly with local partners The semiconductor branch of the Carl Zeiss / Germa‐ German technology group to acquire Electr. Israel Carl Zeiss ‐ ‐ ny Pixer Technology, a specialist in yield hardware SMT enhancement systems for photomasks

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Herley Industries / The group is to acquire Eyal Microwave Herley Industries, a defence company Electr. Israel USA ‐ ‐ General providing providing communication hardware Microwave technologies for military use Israel The company, which recently acquired Nobel Switzer Israelʹs leading dental implant firm Electr. Israel ‐ ‐ Biocare ‐land AlphaBioTec, to sign an exclusive hardware partnership agreement with Optimet The ex European Venture Partners to Kreos Electr. Israel UK invest in Iamba Networks, which 5 ‐ capital hardware develops chips for telecommunications Renaissance New York‐based hedge fund to become Techno‐ the largest shareholder in Alvarion, a Electr. Israel USA 18 ‐ logies wireless broadband systems provider, hardware Corporation buying 5.76 % for USD27 mln The electronic systems provider to buy in 2 steps a 100% of Yokneam‐based Electr. Israel Thales France 22 ‐ CMT Medical Technologies, a developer hardware of medical imaging systems Brazilian provider of optical network Electr. Israel Padtec Brazil products to acquire Civcom, 23 ‐ hardware optoelectronic module manufacturer General GE Healthcare to buy Israeli medical Electr. Israel Electric/ GE USA equipment company VersaMed for USD 26 ‐ hardware Healthcare 40 mln The digital video and broadband optical networking systems provider to buy Electr. Israel Harmonic USA Scopus Video Networks which 35 ‐ hardware develops digital video networking products IBM System Storage business unit to acquire Israeli start‐up XIV Information Electr. Israel IBM USA 197 ‐ Systems, specialised in storage hardware infrastructure The worldʹs largest software company to buy from Internet Gold the Israel Microsoft USA Software ‐ ‐ remaining 50.1% stake in MSN Israel online portal The French software editor to make a Israel Mandriva France Software ‐ ‐ foray in Israel through Merkado Linux

100

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m American web media conglomerate to IAC acquire tarNet Interactive, parent Israel (InterActive USA company of GirlSense.com, a website Software ‐ ‐ Corp) that lets teenagers design virtual fashions EMC / EMC acquires the software editor B‐ Israel USA Software ‐ ‐ VMware hive Networks US‐based group to acquire Eurekify, an Israel CA USA Israeli IT company specialising in access Software ‐ ‐ and identity management The Illinois‐based company to acquire SportVU, a sport‐focused start up that Israel STATS USA Software ‐ ‐ provides game analysis thanks to its motion capture technology Singapore Israel Industrial The new tech‐focused investment fund Research & Singa‐ to invest USD 2.5 million in several JVs Israel Software 2 ‐ Develop‐ pore involving Israeli and Singaporean ment companies Foundation (SIIRD) Israel‐based troubleshooting site Fixya Mayfield to raise USD6 mln in series B funding Israel USA Software 2 ‐ Fund from Californiaʹs Mayfield Fund and Israelʹs Pitango The US‐based group to acquire Israel GlobalLogic USA InterObject, a software product Software 8 ‐ engineering company Viaccess, a France Telecom subsidiary, France to acquire a 100% stake in Orca, a Israel Telecom / France Software 14 ‐ provider of IPTV middleware and Viaccess applications, for USD 21.4 mln Microsoft to buy YaData, an online advertising targeting company based in Israel Microsoft USA Software 16 ‐ Tel Aviv, for approximately USD 25 mln The US‐based giant to purchase Israeli Israel Microsoft USA start‐up Zoomix, specializing in data Software 16 ‐ quality software German business software giant to buy Germa‐ Israel SAP from local ICT group Ness its SAP sales Software 20 ‐ ny and distribution unit in Israel

101

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The Californian private equity group to Vector increase its stake in Aladdin, a specialist Israel USA Software 20 ‐ Capital in digital rights management, in view to gain control over it The US‐based giant to buy FoxyTunes, developer of a multimedia browser Israel Yahoo! USA Software 26 ‐ plug‐in for Firefox and Internet Explorer IBM to acquire FilesX, a data protection Israel IBM USA and recovery software company, for Software 46 ‐ USD 70 mln The US‐based company bought the start up Kidaro for USD 100 mln and plans to Israel Microsoft USA Software 66 ‐ develop an Israel Innovation Lab in Herzliya Pituach The worldʹs biggest seller of Linux software to buy Raʹanana‐based Israel Red Hat USA Qumranet, a developer of desktop Software 70 ‐ virtualization solutions, for USD 107 mln The specialist in online payment buys Ebay / Israel USA Israel‐based Fraud Science for 169 Software 111 ‐ Paypal million USD

IBM to acquire Diligent Technologies Israel IBM USA another data protection software Software 112 ‐ company, for USD 170 mln

Wind River The American software developer to Israel USA Software ‐ 10 Systems open a new R&D centre in Raʹanana The NY‐based art information online MutualArt.c Israel USA platform to open a R&D centre in Tel Software ‐ 20 om Aviv The EMCʹs subsidiary to open an R&D EMC / centre following the purchase of Israel‐ Israel USA Software ‐ 40 VMware based software editor B‐hive Networks a few months ago German business software giant to Germa‐ create a new R&D center which will Israel SAP Software ‐ 50 ny jointly operate with its other research center based in Raʹanana

102

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The group is to create its first Israel‐ based R&D centre in Matam Park Israel Yahoo! USA Software ‐ 75 (Haifa), which will work on web search technologies Tata / Tata Indian information technology firm to Consultancy Israel India hire 500 local developers for a new Software ‐ 500 Services software center (TCS) Deere & US manufacturer of farm equipment to Mechanics Israel Company USA acquire from Kibbutz Gvat 75.1% of & 50 ‐ (John Deere) Plastro Irrigation Systems machinery Aero‐ General Gulfstream Aerospace is investing in nautical, Dynamics / capacity increase of Galaxy, its Israeli JV Israel USA naval & ‐ ‐ Gulfstream with IAI, which produces G200 and railway Aerospace / G150 models in Tel Aviv equipment The Rockville‐based investment firm to Zitelman Israel USA invest in Flexicath, which develops Drugs ‐ ‐ Group sterile catheter intravenous systems The developer, manufacturer and marketer of specialty generic RxElite Israel USA prescription drugs, to acquire Finetech Drugs 12 ‐ Holdings Laboratories LTD of Haifa for USD 18.5 million Indiaʹs biggest drugmaker to buy an Sun extra 9.4% in Taro for USD 38 mln, still Israel Pharma‐ India Drugs 25 ‐ hoping to complete the merger ceutical announced in May 2007 Phibro The animal health and nutrition Animal products specialist to buy Tevaʹs Israeli Israel USA Drugs 31 ‐ Health / veterinary business, including a Koffolk manufacturing plant with 90 employees The medical devices company to Nobel Israel Sweden acquire Israelʹs leading dental implant Drugs 63 ‐ Biocare firm AlphaBioTec The US‐based pharmaceutical company to expand its activities by moving to Israel Medgenics USA Drugs ‐ 6 new offices in Misgav and creates 6 new jobs Israeli branch of US investment fund to Consul‐ KCS Private take a 51% stake in employment agency Israel USA ting & 17 ‐ Equity Danel, specialised in nursing staff, for services NIS 88 million

103

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Hewlett The group to establish an International Consul‐ Israel Packard USA Technology District, i.e. a unit in charge ting & ‐ 20 (HP) of local technological sourcing services The American international communications services provider to Israel Xfone USA Telecom 9 ‐ buy a majority stake in Tadiran Telecom for USD 13 mln Apax + Apax Saban Arkin Group to exercise its Saban / option to buy another 10.66 % of Israelʹs Israel Apax Saban USA Telecom 312 ‐ Bezeq, the leading telecom operator, Arkin after a 30% privatised in 2005 Group A group of US developers to build a Biblical holiday village including a 200‐ Tourism, Israel Unknown USA 26 10 room hotel at Neot Kedumim biblical catering landscape reserve Midas Jordan to launch a new Midas decorating center in Amman specialized Jordan Kuwait Furnishing ‐ ‐ Furniture in providing full furnishing for houses and offices The UAE‐based interiors contractor to Jordan Depa UAE increase its stake in Jordan Wood Furnishing 5 ‐ Industries up to 36.4% for USD7.6 mln National Bank of The bank to open 2 new branches on Bank & Jordan Kuwait ‐ ‐ Kuwait Aqaba Corniche Street and in Sweifieh insurance (NBK) UAE‐based provider of finance, insurance, investment and property Bank & Jordan Eqarat UAE 1 ‐ management services to set up a local insurance subsidiary Global The group to establish Universal Bank & Jordan Investment Kuwait Brokerage, a brokerage subsidiary to 14 ‐ insurance House focus on the Amman Stock Exchange Qatar The Qatarʹs bank to increase its stake in Bank & Jordan National Qatar Jordanʹs Housing Bank for Trade and 26 ‐ insurance Bank (QNB) Finance (HBTF) to 32.4% Dubai JD Capital and Dubai Islamic Bank to Holding + acquire a 52% stake in Industrial Bank & Jordan UAE 70 ‐ Dubai Development Bank and re‐brand it as insurance Islamic Bank Jordan Dubai Islamic Bank (JDIB) Dubai The Emirati company to create a PW, Jordan World / UAE subsidiary based in Amman to utilities, ‐ ‐ Limitless supervise future operations logistics

104

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Agility / The Public The logistics services provider to set up PW, Jordan Ware‐ Kuwait a warehouse in the Queen Alia utilities, ‐ ‐ housing Co International Airport Free Zone logistics (PWC) National The commercial and industrial real PW, Real Estate estate promoter to set up a JV with Jordan Kuwait utilities, ‐ ‐ Company Aqaba Development Corporation and logistics (NREC) manage an industrial zone Intaj Capital, a Swicorp fund, to PW, Swicorp / Saudi purchase a strategic stake in Jordan Jordan utilities, ‐ ‐ Intaj Capital Arabia Aviation (JATE), an aviation leasing logistics company Global First Jordan Investment, whose major Investment PW, shareholder is Kuwaitʹs Global Jordan House / Kuwait utilities, 16 ‐ Investment House, to acquire Adaa, a First Jordan logistics local real estate firm Investment Kuwait The Islamic financial group to acquire a Finance PW, 28% stake in Deera Investment and Real Jordan House Kuwait utilities, 22 ‐ Estate Development Co (Deera), a real (KFH) / logistics estate promoter KFH‐Jordan Jordan‐Kuwait Noor Financial Investment Co, the local investment PW, Jordan NIG / Noor Kuwait arm of NIG to launch a residential utilities, 34 ‐ project south of Amman for middle and logistics higher income residents Dubai The Dubai Holding affiliate to Holding / PW, recapitalise its real estate subsidiary Jordan Jordan UAE utilities, 58 ‐ Aqarqo and name it Jordan Dubai Dubai logistics Properties Capital Kuwaitʹs GIH to acquire a 20% stake in Global PW, Jordan‐based Arab East Investment, Jordan Investment Kuwait utilities, 117 ‐ engaged in real estate operation and House logistics investment activities The Amman Zarqa Light Railway PW, project will be eventually carried out by Jordan Ineco‐Tifsa Spain utilities, 124 ‐ Ineco‐Tifsa and Kuwaitʹs Noor through logistics a 30 years BOT contract The promoter, part of the Dubai World Dubai PW, group, launched construction of its Jordan World / UAE utilities, 197 ‐ Sanaya Amman project, 2 residential Limitless logistics towers in the Abdoun area of Amman

105

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The property developer is to build a Al Rajhi / PW, Saudi 220m‐high commercial tower in Jordan Tameer utilities, 197 ‐ Arabia Ammanʹs CBD, as part of the Abdali Holding logistics project he real estate promoter to launch PW, Manazel Jordan UAE Amman Gardens, a residential project utilities, 286 ‐ Real Estate targeting middle income families logistics The consortium to relocate Aqabaʹs port PW, facilities to the southern part of the city Jordan Al Maabar UAE utilities, 3 289 ‐ and develop a tourism megaproject for logistics USD 5 billion over 7 years Areva was granted exclusive Cement, exploration rights on local uranium Jordan Areva France glass, ‐ ‐ resources, and is to build a mine and an minerals extraction plant operational by 2012 Arabian Cement Co / The group to participate to the capital Ready Mix Cement, Saudi increase of Qatranah Cement Co, its Jordan Concrete & glass, 7 ‐ Arabia 80%‐owned subsidiary in charge of the Constru‐ minerals cement plant project in Qatranah ction Supplies A Qatari investor teams up with local Cement, Remal partners to set up a USD 170mln glass Jordan Qatar glass, 53 2 000 Holding factory in the Maan governorate, minerals constructed by German DTEC The telecom equipment distributor to open an office in Amman to provide Distri‐ Jordan Source IT UAE ‐ ‐ support to corporate customers in bution Jordan, Syria and Iraq The group to open its first after‐sale services centre in Jordan, to provide Electronic Jordan Haier China ‐ ‐ technical support to its Middle Eastern ware customers Brazilʹs Petrobras and French Total are Petrobras + to conduct a joint exploration Jordan Brazil Energy ‐ ‐ Total programme of oil shale reserves in the Wadi Al Maghar area The manufacturer of IP‐based network Cisco Electr. Jordan USA equipments to expand its Arab‐ ‐ 23 Systems hardware speaking Technical Assistance Center Argentina‐based provider of BPO Consul‐ Argen‐ services to set up a greenfield facility in Jordan CubeCorp ting & ‐ ‐ tina Amman with the investment fund services Accelerator Technology Holdings

106

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m US public relation and advertisement Consul‐ Publicis / giant, part of French Publicis group, to Jordan France ting & ‐ ‐ Leo Burnett set up Leo Burnett Jordan and open full‐ services fledged office in Amman The company to form a 60/40 JV with Globe Consul‐ Austra‐ local Darat Jordan Holdings (DJH) to Jordan Williams ting & ‐ ‐ lia provide facility management services, Int’al (GWI) services mainly in Jordan The provider of services for telecom and Consul‐ corporate networks to create a Jordan TIBCO France ting & ‐ ‐ subsidiary in Amman, named TIBCO services Jordanie National The Amman Zarqa Light Railway Consul‐ Industries project will be eventually carried out by Jordan Kuwait ting & 124 ‐ Group / Ineco‐Tifsa and Kuwaitʹs Noor through services Noor a 30 years BOT contract The Shenzhen‐based company is to Consul‐ Jordan Huawei China inaugurate its very first professional ting & ‐ 10 competence center in Jordan services France The dominant shareholder of Jordan Telecom / Telecom since 2006 to open a Jordan France Telecom ‐ ‐ Jordan Technocentre in Amman, which will be Telecom integrated to the Orange Labs network VTEL The local subsidiary of Dubai‐based Holdings / telecom operator VTEL to set up a Jordan UAE Telecom 99 ‐ VTEL national optical fibre network over 3 Jordan years with Indian Reliance Globalcom UAE‐based Almahmoud, the Middle Almah‐ Eastern franchisee of the US coffee Tourism, Jordan moud UAE ‐ 20 chain Port City Java, to open 2 stores in catering Group Amman Banque Misr The Lebanese subsidiary of Egyptʹs / Banque Banque Misr to renovate entirely its Bank & Lebanon Egypt ‐ ‐ Misr Liban Furn el Chebback branch (Beyrouth), insurance (BML) and plan to strengthen its local network The London‐based fund to acquire part Capital of Chedid Capital Holding, an Bank & Lebanon Trust Group UK 4 ‐ insurance and re‐insurance group, in insurance / EuroMena order to finance its regional expansion The EAU‐based bank to participate to Emirates Bank & Lebanon UAE the major capital increase of Bank of 13 ‐ NBD insurance Beirut, in which it holds a 10% stake

107

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Bank of Sharjah / Bank of Sharjah to inject liquidity into Bank & Lebanon Emirates UAE Emirates Lebanon Bank (ELBank), ex‐ 99 ‐ insurance Lebanon Banque de la Bekaa Bank The Islamic bank to receive initial Al‐Belad agreement of the Central Bank of Bank & Lebanon Iraq ‐ 20 Islamic bank Lebanon to open a branch of the bank in insurance Beirut The Kuwaiti promoter to launch the ʹAl PW, Lebanon Al Massaleh Kuwait Saifi Crownʹ project, a residential tower utilities, ‐ ‐ located in Beirut and available in 2010 logistics The IFC to buy a significant stake and participate in the capital increase of PW, World bank Lebanon USA Butec, a major construction and utilities, 10 ‐ / IFC engineering company active logistics international The Dubai‐based promoter to launch PW, Plus Lebanon UAE Plus Tower 1 and 2, a luxury residential utilities, 132 ‐ Properties project in Beirut city centre logistics Kuwaiti retail group to acquire from The Sultan Admic, the Lebanese Monoprix and Distri‐ Lebanon Center Kuwait 71 ‐ Geant franchisee, 69 supermarkets re‐ bution (TSC) branded as The Sultan Center (TSC) The real estate developer to build Kuwait Real Kempinski Residences Alabadiyah Tourism, Lebanon Estate Kuwait ‐ ‐ Hills, branded serviced apartments catering Company managed by Kempinski Hotels Al‐Taher / The real estate branch of Al‐Taher Optimum group to launch Le Luxe de Tourism, Lebanon Develop‐ Oman 15 280 lʹAuthentique, the 1st phase of KROUM, catering ments / a luxury mountain project in Ehden Europtima Slama / Etablissement Slama Frères to create Etablis‐ Nejma Edible Oil, a 60‐40 JV with a local Agro‐ Libya Tunisia 3 ‐ sement partner, which will package and business Slama Frères manufacture vegetal edible oil products Jordan‐based Arab Bank to buy 19 % of Bank & Libya Arab Bank Jordan Libyaʹs Wahda Bank for EUR210 mln, 210 ‐ insurance with the right to raise its stake to 51 % Entreprise des travaux et dʹétudes de PW, ETEP / projets to establish ETEP Libya, a 65/35 Libya Tunisia utilities, ‐ ‐ ETEP Libye JV, to compete for many construction logistics contracts of Libyan marinas

108

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Italy‐based construction group to form PW, a 60‐40 JV with the Libyan government Libya Impregilo Italy utilities, ‐ ‐ to execute a EUR 523 mln contract to logistics build universities in Misurata The promoter to create a subsidiary PW, Hydra named Hydra Libya Real Estate, as a Libya UAE utilities, ‐ ‐ Properties prelude to the creation of its ʹTripoli logistics Towersʹ project Qatar Qatarʹs state‐owned real estate PW, Investment investment group to form the Libyan‐ Libya Qatar utilities, 3 ‐ Authority Qatari Real Estate and Tourism firm logistics (QIA) / Diar with the Libyan government Creation in Tripoli of a joint investment PW, Sultanate of holding with the Libyan government Libya Oman utilities, 164 ‐ Oman targeting real estate, industrial and logistics tourism projects Abu Dhabi Creation with Libyaʹs Economic and Fund for PW, Social Development Fund of Libyan Libya Develop‐ UAE utilities, 196 ‐ Emirates holding company (LEHC), an ment logistics investment holding (ADFD) A JV of the Athens‐based construction PW, group with local Economic Social & Libya CCC Greece utilities, 300 ‐ Development Fund to build an office logistics block and a 5‐star hotel in Tripoli The Qatari property developer to Qatar launch with the Libyan Development & PW, Investment Libya Qatar Investment Company a mixed‐use utilities, 658 ‐ Authority development in which it will have a logistics (QIA) / Diar 49% stake The manufacturer of modular buildings Red Sea PW, Saudi to create a new subsidiary in Libya as a Libya Housing utilities, 12 200 Arabia prelude to the construction of a giant Services logistics factory by June 2009 Capital Managemen Two private equity funds to acquire a Caiman Libya t House + majority interest in Etelaf Oil Services, a Energy ‐ ‐ Islands Tuareg Libyan based oil service company Capital The energy group to set up of a 45/55 JV Galp Portu‐ dominated by the Libya Africa Libya Energy ‐ ‐ Energia gal Investment Portfolio (LAP), targeting local oil and gas exploration projects

109

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The State‐owned energy company to establish with local BA‐Group a 55/45 Libya Egypt Gas Egypt Energy ‐ ‐ JV operating in natural gas distribution and trading Brazilʹs state‐owned oil giant Petrobras Libya Petrobras Brazil to invest USD 21 million in offshore Energy 14 ‐ exploration (Area 18) The energy groups to launch an Libya Oil India India ambitious 3‐year drilling programme at Energy 30 ‐ its oil & gas fields in Libya The group to buy a 20% interest in 5 onshore blocks in Syrte and 1 block in Libya GDF Suez France Energy 104 ‐ Murzuk, operated by Woodside Energy (45 %), with Repsol (35%) Statoil‐ Agreement with Libyaʹs NOC for the Hydro Nor‐ extension until 2032 of Repsol operated Libya (Statoil) / Energy 394 ‐ way block NC186 in Murzuq basin, in which Saga Saga holds 20% Petroleum Agreement with Libyaʹs NOC for the extension until 2032 of Repsol operated Libya OMV Austria Energy 658 ‐ blocks NC115 and NC186 in Murzuq basin, in which OMV holds 30 and 24% Agreement with Libyaʹs NOC for the extension until 2032 of Repsol operated Libya Total France Energy 658 ‐ blocks NC115 and NC186 in Murzuq basin, in which Total holds 30 and 24% Al Ghurair / NOC and a consortium of 2 companies TransAsia affiliated to Dubaiʹs Al Ghurair Libya Gas Int’al + UAE Energy 658 ‐ establish a 50/50 JV for a USD 2 billion Star Petro upgrade of Ras Lanuf oil refinery Energy Agreement with Libyaʹs NOC for the extension until 2032 of Repsol operated Libya Repsol‐YPF Spain blocks NC115 and NC186 in Murzuq Energy 1 710 ‐ basin, in which Respol holds 40 and 32% The group to sign a full 30‐year Occidental agreement with Libyaʹs NOC and invest Libya USA Energy 3 289 ‐ Petroleum USD5 bn over next 5 years in tripling production of Sirte basin fields El Sewedy Creation of Libya Joint Company for Cables Cable Manufacturing, a Tripoli‐based Electr. Libya Egypt 11 ‐ Holding 55/45 JV with 2 local partners (high hardware Company voltage cables and electrical equipment)

110

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The specialist in engineering of telecom systems to form a 55/45 JV with state‐ Electr. Libya Sirti Italy ‐ 170 owned LPTIC to modernise and hardware manage part of the national newtork Edgo Group Edgo Groupʹs electric submersible Mechanics / Reda pump business in Libya has recently Libya Jordan & ‐ ‐ Pump Libya relocated to a new and larger facility at machinery (RPL) 9km Suani Road in Tripoli Agence Consul‐ The Paris‐headquartered news agency Libya France‐ France ting & ‐ 3 to open a permanent bureau in Tripoli Presse (AFP) services Banco Interna‐ The bank of Madeira and Azores to set Portu‐ Bank & Malta cional do foot in Malta, with plans to open 22 ‐ 350 gal insurance Funchal branches and hire 350 employees (Banif) Norwegian shipping group Wilh. Wilh. PW, Nor‐ Whilhelmsen to move its move its Malta Wilhelmsen utilities, ‐ ‐ way shipping activities to Malta to avoid (WW) logistics new Norwegian tax regime Massaleh Develop‐ Kuwait‐based developer to invest PW, Malta ment Co / Kuwait EUR100 million in a mixed‐use project utilities, 100 ‐ Al‐Massaleh in the former Mistra Village Complex logistics Real Estate Rimor‐ The Italian group to invest heavily in PW, chiatori Malta Italy the recently acquired Tug Malta, a utilities, 100 ‐ Riuniti provider of shipping‐related services logistics Group The discount supermarket chain to open 3 first Maltese outlets in Luqa, San Germa‐ Distri‐ Malta Lidl Gwann and Sta Venera, with more 15 50 ny bution openings planned in Safi, Zebbug and Zabba Mediterra‐ The energy company to start oil nean Oil & exploration in partnership with fellow Malta Gas (MOG) UK Energy 7 ‐ Leni Gas & Oil in southern Malta, Area + Leni Gas & 4, Blocks 4 to 7 Oil The computer manufacturer to transfer part or its local activities to Electr. Malta Dell USA Casanearshore where 200 jobs will be ‐ 200 hardware created, beyond those announced in 2007

111

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Aero‐ The famous luxury boat brand to join nautical, Sunseeker Marsec‐XL ‐ the Marine Systems and Malta UK naval & ‐ ‐ Int’al Software Engineering Cluster, and railway participate to its R&D activities equipment Aero‐ Tognum / Tognumʹs diesel engines subsidiary nautical, MTU Germa‐ MTU Friedrichshafen to join Maltaʹs Malta naval & ‐ ‐ Friedrichsha ny MARSEC‐XL cluster R&D activities on railway fen yachts automation and propulsion equipment Aero‐ Rodriguez / The luxury yachting services provider nautical, Camper & to relocate its global headquarters to Malta France naval & ‐ ‐ Nicholsons Malta, inaugurating new offices at the railway Int’al Vittoriosa yacht marina equipment Tecom and Sama Dubai to start Dubai construction of the 1st phase of the Malta Holding / UAE Telecom 248 5 600 USD308mln SmartCity@Malta project, a Tecom‐DIG business park focused on ICT The Auckland‐based cooperative opens New‐ Agro‐ Morocco Fonterra a new packaging unit in Casablanca for 2 ‐ Zealand business MAD 25 million The nursery company to acquire 13 ha Vivero Agro‐ Morocco Spain of land where it will produce there one 2 50 SOROA business million of ornamental plants Roger The frozen fruits company to partner Descours with local fruit producer Atagri to Agro‐ Morocco France 2 2 000 Group / build, through Delikemar, their 50/50 business Delikemar JV, a 2nd production plant in Kenitra Moroccan Riad Motors Holding to Sinotruk + assemble Chinese small trucks in Settat, Auto‐ Morocco Mudan + China ‐ ‐ buying CKD models from Sinotruk, motive Baw Mudan and Baw Renault Maroc to inaugurate the Renault Academy Maroc, a profesionnal Renault‐ Auto‐ Morocco France training centre dedicated to the 1 ‐ Nissan motive automotive sector, in Ain Sebaa, Casablanca The Portuguese automotive and Portu‐ electronics subcontractor invests EUR Auto‐ Morocco Joamar 4 400 gal 3.5 million in a production unit in motive Tangiers, creating 400 new jobs by 2009

112

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m PSA The automotive equipment supplier to Peugeot Auto‐ Morocco France create a production plant in Kenitra for 10 650 Citroen / motive EUR 10 million Faurecia Delphi / Delphi The auto parts manufacturer to expand Auto‐ Morocco Automotiv USA Delphi Automotiv Systems Maroc, a ‐ 2 300 motive Systems factory set up in Tangiers since 1999 Maroc Caja Spanish bank gets a license from Bank Bank & Morocco Mediter‐ Spain Al Maghrib and will open its first local ‐ ‐ insurance raneo branch, in Casablanca After the opening of a representative office in Casablanca in 2007, the bank is Bank & Morocco La Caixa Spain ‐ ‐ to set up a real branch, and maybe insurance another establishment in Tangier Société Générale / Fin‐Flousse.com, the debt‐recovery arm Société of Societe Generale Marocaine des Bank & Morocco Générale France ‐ ‐ Banques, to acquire Soreffi Maroc, a insurance Marocaine subsidiary of Cetelem (BNP Paribas) de Banques / Fin‐Flousse The European bank to create a carbon Luxem‐ fund, in partnership with Moroccoʹs Bank & Morocco BEI 7 ‐ burg CDG and Franceʹs Caisse des Dépôts insurance (CDC) Caisse des The French financial institution to create Dépôts et a carbon fund, in partnership with Bank & Morocco France 7 ‐ Consigna‐ Moroccoʹs CDG and the European insurance tions (CDC) Investment Bank (EIB) Crédit The CIC, subsidiary of the French bank Bank & Morocco Mutuel / France Credit Mutuel, raises to 15% its interest 209 ‐ insurance CIC in the capital of the BMCE bank The group to increase its stake in Crédit Crédit du Maroc up to to 77% from 53%, while Bank & Morocco Agricole / France 215 ‐ Sofinco is to own a total 49% of insurance Sofinco Wafasalaf (consumer credit) The consortium in which Kuwait KIA / Investment Authority has a 77% interest Bank & Morocco Kuwait 494 ‐ CMKD to increase the capital of its Moroccan insurance fund Al Ajial Investment Fund Holding

113

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The mortgage broker to set up a subsidiary in Casablanca, which will be Bank & Morocco Cafpi France ‐ 6 the first to offer such mortgage insurance brokerage services in the country The banking group to open an office in Banco Casablanca in order to follow the Bank & Morocco Spain ‐ 12 Sabadell Spanish companies on the Moroccan insurance market PW, The real estate services group to launch Morocco Constructa France utilities, ‐ ‐ asset management activities in Morocco logistics Pizzorno SEGEDEMA, subsidiary of Pizzorno PW, Environ‐ Environnement, will run and modernise Morocco France utilities, ‐ ‐ nement / the intermunicipal dump of Al‐ logistics Segedema Hoceima The company to acquire the remaining PW, TUI / Germa‐ 60% shares of Jet4You, the Moroccan Morocco utilities, ‐ ‐ Jet4you ny low‐cost airline created in 2005 with 3 logistics Moroccan partners A. P. Moller‐ The marine transportation firm to win PW, Maersk / Den‐ with local Akwa Group the BOT Morocco utilities, ‐ ‐ APM mark concession for the 3rd container logistics Terminals terminal in Tangier Med port Mixta Africa, backed by the IFC and the Saudi prince Alwaleed Bin Talal, to PW, Renta / Morocco Spain launch BabTetouan, a mixed‐used utilities, ‐ ‐ Mixta Africa project including shopping mall and logistics hotels The real estate branch of Manuel Joveʹs Inveravante PW, investment holding to launch Anfa Morocco / Avantespa‐ Spain utilities, ‐ ‐ Place Living Resort, a high‐end mixed‐ cia logistics use project in Casablanca Sharjah‐based low cost airline to Air Arabia + PW, establish Air Arabia Maroc by taking Morocco Ithmaar UAE utilities, ‐ ‐ control of its local partner Regional Air Bank logistics Lines The container terminal operator to win PSA PW, Singa‐ with the Marsa Maroc consortium and Morocco Singapore utilities, ‐ ‐ pore SNI, the BOT concession for Tangier Terminals logistics Med Terminal 4 The Japan‐based company to enter PW, Mitsui Morocco Japan Morocco by entrusting local Comarship utilities, ‐ ‐ O.S.K. Lines as its local agent logistics

114

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The supplier for the construction PW, industry to form with local Satram a JV Morocco Libaud France utilities, ‐ ‐ dedicated to the development of logistics industrial zones Construction giant Actividades de ACS / Construccion y Servicios to crease the PW, Morocco Dragados Spain paid‐in capital of its subsidiary utilities, 2 ‐ Maroc Dragados Maroc from MAD 19 mln up logistics to 35 mln Henry French promoter gets a 30% stake in PW, Hermand Moroccoʹs Best Real Estate project of Morocco France utilities, 11 ‐ Dévelop‐ building the Al Mazar shopping centre logistics pement in Marrakech The Spanish promoter Marina dʹor to PW, Morocco Marina dʹOr Spain launch the Atlas de Marrakech project, utilities, 21 ‐ which foresees the building of logistics The Spain‐based company, active in real PW, estate, to sign a social housing project of Morocco Merke Spain utilities, 26 ‐ 300 units in Sidi Abdelkrim (Safi) to be logistics built over 4 years Login Park Maroc, Spanish project of PW, Morocco DITEMA Spain export oriented industrial complex in utilities, 80 ‐ Tamadroust, in the Settat region logistics The Spanish promoter Marina dʹor to PW, launch the Perle de Tanger project, Morocco Marina dʹOr Spain utilities, 180 ‐ which includes 6 residential buildings, 2 logistics offices towers and a 5 stars hotel The real estate agency, a subsidiary of Emaar PW, Emaar Properties, to establish Morocco properties / UAE utilities, ‐ 10 Hamptons Morocco for the marketing Hamptons logistics of Emaarʹs local projects The transportation and logistics group PW, SNCF / Morocco France to inaugurate a new 7000‐m2‐platform utilities, ‐ 50 Geodis in Tnagiers Med free zone logistics The promoter to launch construction of Gulf Finance PW, 1st phase of the Marrakech realisation Morocco House Bahraïn utilities, 273 8 000 of the Porta Moda concept, a real estate (GFH) logistics project close to the airport Swicorp & The Tunisian firm, created by Swicorp Tuninvest / Switzer and Tuninvest, with the aim of making Morocco Chemicals ‐ ‐ Altea ‐land several acquisitions in the packaging Packaging sector, to purchase Moroccoʹs Optima Spanish manufacturer of roof thermal Morocco Danosa Spain insulation and acoustic materials to set Chemicals ‐ ‐ up a distribution branch

115

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Vietnam Oil PetroVietnam Fertiliser and Chemical and Gas Viet Joint Stock Company to set up with Morocco Chemicals 197 ‐ Group/ Nam local OCP a USD 600 mln JV fertiliser PVFCCo plant by 2011 Jacob Delafon Maroc, JV between Kohler / American Kohler and Moroccan El Cement, Jacob Morocco USA Alami, to double the production glass, 9 150 Delafon capacity of its Tangiers plant (bathroom minerals Maroc fittings) Tessera The group to get a 10% stake in Techno‐ Nemotek Technology, which will Elec‐tronic Morocco logies / USA manufacture Tessara products under compo‐ 8 ‐ Nemotek license in Ifrane (camera lenses for nents Technology mobile phones) The electronic equipment manufacturer Adetel / Elec‐tronic to set up a manufacturing subsidiary Morocco CMS France compo‐ ‐ 60 called CMS Electronique, in Electronique nents Mohammedia, near Casablanca Libyan The Libyan oil corporation to buy the Morocco Petroleum / Libya 360‐gas stations network of Exxon Energy ‐ ‐ Naft Libya Mobil Morocco Trans‐ TransAtlantic Petroleum and Longe Atlantic Energy to get each a 25% interest in the Morocco Petroleum + Canada Energy ‐ ‐ Ouezzane‐Tissa and Asilah exploration Longe permits held by Direct Petroleum Energy Island Oil & The British oil company to become Gas / Island operator of the 8‐years exploration Morocco Int’al UK Energy ‐ ‐ permit in the ʹTarfaya Onshoreʹ area Exploration (40%) Morocco Taqa and Theolia to sign a 50‐50 partnership agreement in Compagnie Morocco Taqa UAE Energy ‐ ‐ Eolienne du Detroit, which was bought from EDF by Theolia in 2007 The Irish energy company to expand its Circle Oil / exploration operations in the Sebou Morocco Circle Oil Ireland Energy ‐ ‐ block, in the Gharb basin, after a gas Maroc find in the well CGD‐9 The group to form with Moroccoʹs Germa‐ Majdaline Holding a JV solar module Morocco Asola Energy ‐ ‐ ny manufacturing facility in Casablanca in which Asola will have a majority stake

116

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The Irish company to acquire a 60% Morocco Circle Oil Ireland interest in the Oulad NʹZala block, Energy ‐ 5 located in Gharb basin San Leon The Dublin‐headquartered oil company Energy / San to get an‐8‐years exploration permit in Morocco Ireland Energy ‐ 5 Leon the ʹTarfaya Onshoreʹ area (30%) in Morocco partnership with other energy group The Sydney‐headquartered oil company Longreach Austra‐ to get an‐8‐years exploration permit in Morocco Oil and Gas Energy ‐ 5 lia the ʹTarfaya Onshoreʹ area (30%) in Ventures partnership with others partners Moravske Czech MND Maroc Limited, a subsidiary of Naftove Morocco Repu‐ Czech Moravské Naftové Doly gets an Energy ‐ 10 Doly / MND blic oil exploration licence in North Morocco Maroc The subsidiary of Veolia Veolia / Environnement to invest MAD 82 mln Morocco Amendis France to build up a power station with Energy 7 50 Branes Moroccoʹs ONE, to be located in the Harrarine area The office systems subsidiary of Telecom Telecom Italia to set up with local Electr. Morocco Italia / Italy ‐ ‐ distributor Data Plus a distribution hardware Olivetti platform in Bouskoura industrial zone The specialist in industry services and environment protection to create Electr. Morocco Hiolle France BMHIOL, a JV with local BM ‐ ‐ hardware Electronics, to produce photovoltaic equipment The Catalan manufacturer of small electrical material, which already has a Electr. Morocco Simon Spain 2 100 R&D centre in Casablanca, to relocate hardware and expand its Tangiers plant Omnium Général dʹElectricité (OGE) Cahors / (water é electricity meters, low tension Electr. Morocco France 4 100 OGE equipment), to relocate from Tangiers to hardware new facilities in Nouaceur The company specialising in electronic payment systems, to target the African Morocco Athic France Software ‐ ‐ market by acquiring Moroccan Sagma, an outsourcing specialist Deutsche The French division of Deutsche Telekom / T‐ Germa‐ Telekomʹs T‐Systems to team up with Morocco Software ‐ ‐ Systems ny local Archos for software development France targeting French‐speaking markets

117

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The software editor specialised in HR HR Access Morocco France management sets up a subsidiary in Software ‐ 15 Solutions Casablanca and hires 15 consultants The company engaged in the Ubisoft production, publishing and distribution Morocco Entertain‐ France of interactive video games to open a Software ‐ 150 ment professional training centre in Casablanca French specialist in the rental of aerial Mechanics Acces work platforms and telescopic handlers Morocco France & ‐ 3 Industrie to set up a local subsidiary in machinery Casablanca The manufacturer of components for Mechanics Meca‐ the automotive and aeronautical Morocco Canada & ‐ 150 chrome industries to transfer to Tangiers part of machinery its French production Aero‐ Groupe The company specialised in surface nautical, Protec / Morocco France treatments and coatings for aeronautical naval & ‐ 35 Protec materials to set up a factory in Morocco railway Industrie equipment Aero‐ The German foundation teams up with nautical, Germa‐ Morocco Steinbeis the Office national des aéroports, to naval & ‐ 50 ny create an aeronautical research centre railway equipment The training centre company, Aero‐ Boeing / subsidiary of Boeing, to create with nautical, Morocco Alteon USA Royal Air Maroc, a JV to manage the naval & ‐ 60 training pilot training centre of Casablanca ‘Casa railway Aéroʹ equipment Aero‐ The French subcontractor of Airbus to nautical, Morocco JPR‐CAP France set up Mohican Maroc, to manufacture naval & 6 100 airplanes metallic parts railway equipment Aero‐ Groupe The Swiss naval architecture group to nautical, Simon / Switzer invest in larger facilities, still in Kenitra, Morocco naval & ‐ 200 Team ‐land for Team Industry, a yacht producer railway Industry which will create 200 jobs equipment

118

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Aero‐ The French manufacturer of composite nautical, Safran / Morocco France parts for planes to double the size of its naval & ‐ 500 Aircelle Nouaceur unit near Casablanca by 2009 railway equipment The Lyon‐based manufacturer of Morocco Lépine France orthopaedic implants and prosthesis to Drugs ‐ ‐ acquire Innopro Crown Carnaud Maroc to construct a new Holdings / Meta‐ Morocco USA beverage can plant on its existing food ‐ ‐ Carnaud llurgy can manufacturing site in Casablanca Maroc Core Consul‐ The human resources consultancy to Morocco Manage‐ France ting & ‐ ‐ open a branch in Casablanca ment services The UAE‐based company specialising Consul‐ in e‐recruitment is now eyeing the Morocco Bayt.com UAE ting & ‐ ‐ Maghreb markets and creates a services subsidiary in Morocco The management and human resources BPI Group / Consul‐ consultancy to open a subsidiary in Morocco BPI Mediter‐ France ting & ‐ ‐ Casablanca, which will cover the ranee services Maghreb The Malaga‐based law firm to Consul‐ Balms & inaugurate new offices in Tangiers, Morocco Spain ting & 2 10 Cruz where it advises European investors services setting up businesses in Morocco Roland The corporate strategy consultancy to Consul‐ Berger Germa‐ open an office in Casablanca targeting Morocco ting & ‐ 12 Strategy ny locals and international customers services Consultants active in Morocco The engineering group, specialising in Consul‐ mechanics and electronics, to set up in Morocco Tohtem France ting & ‐ 30 the ʹCity of electronicsʹ of Mohammedia services near Casablanca Launch of Steria MedShore, a 50/50 JV Consul‐ between the French technological Morocco Steria France ting & ‐ 100 company and the Moroccan services businessman Othman Benjelloum The India‐grown BPO specialist to start Consul‐ operations in Morocco by setting up a Morocco Genpact India ting & 3 1 000 French speaking centre of up to 1000 services positions

119

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The provider of telecommunications services to create a local subsidiary Morocco AT&T USA Telecom ‐ ‐ ‘AT&T Global Networks Services Moroccoʹ in Casablanca The provider of VoIP services and low Telemedia cost international telecom operator to Morocco France Telecom ‐ ‐ Group create a subsidiary, ‘Telemedia Moroccoʹ Telefonica, which owns 32.2% of Meditel, will contribute to the MAD 4.2 Morocco Telefonica Spain Telecom 119 ‐ billion investments in infrastructures planned over 2 years PT, which owns 32.2% of Meditel, will Portugal Portu‐ contribute to the MAD 4.2 billion Morocco Telecom / Telecom 119 ‐ gal investments in infrastructures planned Meditel over 2 years The residential resort promoter will Nether‐ build a prestigious seaside resort Tourism, Morocco La Perla ‐ ‐ lands located on the shores of Lake Lalla catering Takerkoust, in the Atlas region Inter‐ continental Hotels & The hotel group to create in JV with the Resorts / local company Cadex a hotel in Tourism, Morocco Inter‐ UK ‐ ‐ Marrakech, the InterContinental catering Continental Marrakech Resort & Spa Hotels Group (IHG) Property Logic, a Malaga‐based promoter, to start construction work for Property Tourism, Morocco Spain Le Jardin des Fleurs, its luxury ‐ ‐ Logic catering development in the Mediterrania‐Saïdia resort Starwood Capital Louvre Hotels, subsidiary of the private Group / equity fund Starwood Capital, to create Tourism, Morocco Groupe du USA ‐ ‐ with Hotelim and H.Partners a JV catering Louvre / which it owns 15% of the capital Louvre Hotels

120

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Equestrian The Dubai‐based equine business Manage‐ solutions company to acquire 40% of Tourism, Morocco ment UAE ‐ ‐ the purchasable land at Royal Ranches catering Services Marrakech from Gulf Finance House (EMS) The Catalan group to buy a 15% stake in Husa the Husa Palmeraie Marrakech being Tourism, Morocco Spain 2 ‐ Hoteles built by Moroccoʹs tourism fund catering H.Partners Daniel Gautierʹs group to further invest in Marrakech with the construction of a Tourism, Morocco Alian France 4 ‐ hotel in the Palmeraie, following the catering acquisition of a restaurant Inteco, the real estate subsidiary of the Gazprom / Russian gas giant to set up Kudla, a Tourism, Morocco Intelco / Russia 14 ‐ local subsidiary in charge of 3 projects catering Kudla in Northern Morocco The Indian hotel chain to create with Aluminium du Maroc a 50 hectare hotel Tourism, Morocco Oberoi India 18 ‐ complex in Marrakesh which will be catering managed by Oberoi Pearl of The promoter confirms the tourism Tourism, Morocco Kuwait Real Kuwait projects in Agadir, Casablanca and 45 250 catering Estate Marrakech announced in 2006 The real estate group to an agreement to KIA / develop Sidi Abed, the 2nd station Tourism, Morocco Kuwait 31 375 CMKD planned within the framework of the catering Biladi national tourism programme The Syrian International Islamic Bank Qatar Int’al (SIIB) to expand its branch network to 8 Bank & Syria Islamic Bank Qatar ‐ ‐ by the end of 2008 in Damascus, Hama, insurance (QIIB) Aleppo and Homs The bank to form Amlak Finance‐Syria Amlak with local Cham Holding to provide Bank & Syria UAE ‐ ‐ Finance Sharia‐compliant home financing insurance solutions and services Jordanʹs Shareco to set up Shareco for Bank & Syria Shareco Jordan Investments and Financial Brokerage ‐ ‐ insurance with local partners United Jordanʹs United Financial Investments Bank & Syria Financial Jordan ‐ ‐ to open a brokerage house in Damascus insurance Investments

121

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Banque The banking JV of Lebanonʹs BEMO Bemo Saudi Leba‐ Saudi BSF to receive the license to Bank & Syria ‐ ‐ Fransi non establish Bemo Saudi Fransi Finance, a insurance (BBSF) Syrian brokerage subsidiary Global The financial services group to set up Bank & Syria Investment Kuwait GIH Syria, a 44%‐owned brokerage ‐ ‐ insurance House agency in Damascus Dubai‐based financial group to team up Daman with local Cham Holding and create a Bank & Syria UAE ‐ 10 Securities JV brokerage company to operate in the insurance new Damascus stock exchange Dubai The UAE‐based insurer, known as Islamic Aman, received a preliminary license Bank & Syria Insurance & UAE 9 50 from the regulator to open an insurance insurance Reinsurance unit in Syria Co. (Aman) The Bahrain‐based Islamic bank to form Al Salam Cham Al‐Salam with local Cham Bank & Syria Bahraïn ‐ 200 Bank Holding to provide Islamic banking insurance services The Kuwaiti company owns a 35% stake PW, Al Aqeelah / in Pearl of Syria (Loloa), a private Syria Kuwait utilities, 1 ‐ Aqeeq airline launched in JV with Syrian Sham logistics Holding and Syrian Air Dubai‐based real estate company to PW, Emaar form a 50‐50 JV with local Cham Syria UAE utilities, 33 ‐ Properties Holding to build residential and logistics commercial projects in Syria Unexim / Akkar Development, a subsidiary of PW, Akkar Leba‐ Beirut‐based Unexim Group, is Syria utilities, 137 ‐ Develop‐ non developping the USD 200 mln Sawfar logistics ment Village project Kuwait The real estate promoter to build an PW, Financial office tower south of Damascus in JV Syria Kuwait utilities, 9 100 Centre with the Kahale and Marouf Groups, logistics (Markaz) two Syrian firms Palmyra Real Estate, JV of local MAS Belhasa PW, Group and UAE‐based Belhasa, to Syria Int’al UAE utilities, 18 100 launch Jasmine Hills its 1st high‐end Company logistics project in Syria, in Kafr Kouk (Yaʹfour) The French cement producer to set up a Lafarge / Cement, USD 760 mln greenfield cement plant Syria Orascom France glass, ‐ ‐ near Damascus, through a JV with local Cement minerals partners

122

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m A.K Al‐ An Italcementi subsidiary is to get a Muhaidib & 12.5% stake in Al Badia Cement, a new Cement, Sons + Other Syria Syrian cement company majority‐ glass, ‐ ‐ Italcementi‐ country owned by Muhaidib Group of Saudi minerals Ciments Arabia Français The Lebanese branch of Virgin stores to Lagardere / open soon in Shahba Mall, a shopping Distri‐ Syria Virgin France ‐ ‐ centre under construction by Jordanʹs bution Stores SA Kurdi and local Sabbagh in Aleppo Majid Al Second Syrian opening for Carrefour Futtaim through Majid Al Futtaim, in Shahba Distri‐ Syria France ‐ ‐ (MAF) / Mall, a shopping centre under bution Carrefour construction in Aleppo Iran Power Plant Iranian engineering company to build a Projects Syria Iran 450‐megawatt power plant in northern Energy ‐ ‐ Manage‐ Syria ment Co. (Mapna) The group to obtain the renewal until 2021of the Deir Ez Zor oil license, Syria Total France Energy ‐ ‐ allowing for the further development of Jafra, Qahar and Atalla fields The group to enhance output from the Tabiyeh gas and condensate field to Syria Total France Energy ‐ ‐ increase gas deliveries to the domestic market from the Deir Ez Zor plant IPR / IPR The Mediterranean subsidiary of the Mediter‐ Dallas‐based energy group to drill new Syria ranean USA Energy ‐ ‐ wells in Block 24, under the extension Exploration contract recently signed with SPC (IPRMEL) Dove The Scotland‐based company and its Syria Energy + UK partner are to get an offshore license Energy 7 ‐ Larsen and spend USD 10 mln in exploration The energy giant to obtain a 10‐years Royal Dutch Nether‐ extension of the production licenses Syria Energy 27 ‐ Shell lands held by Al‐Furat (AFPC), its local JV with SPC, up to 2027 Gulfsands The energy group and its local partners Petroleum / have brought about early production at Syria Dijla UK Energy 35 ‐ Khurbet East field and will further Petroleum invest to boost capacity Company

123

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m INA (Industrija Hayan Petroleum Company, a 50‐50 JV nafte d.d.) / between Croatiaʹs INA and Syrian Syria Croatia Energy 146 ‐ Hayan Petroleum Company, to invest EUR 291 Petroleum mln in a gas treatment plant Company The Canadian operator on the Ebla Petro‐ project with a 100% interest to pays Syria Canada Energy 314 ‐ Canada USD 477 mln to have Petrofac build a gas treatment plant China National The Chinese energy company to build Syria Petroleum China by 2011 a USD 1 bn oil refinery in Deir Energy 658 ‐ Corp Ezzor in JV with Syrian oil ministry (CNPC) The group received approval to set up 2 methane gas treatment facilities at Syria Shimizu Japan Energy 6 30 garbage treatment sites thanks to UN ‐ Clean Development Mechanism El Sewedy Cables / El El Sewedy Electric to set up a factory in Electr. Syria Sewedy Egypt Adra Industrial City to produce counter 3 25 hardware Electrical metres for the local and export markets Equipment Syrian‐Kuwaiti JV to open five Mechanics Al Jaz Syria Kuwait industrial plants in Deir‐ez‐Zor & 7 ‐ Group Industrial City (DZIC) machinery Saudi Roots Steel, JV formed by Binladinʹs BinLadin Arabian Roots with Construction Group Saudi Meta‐ Syria Products Holding, to set up a pre‐ 18 ‐ (SBG) / CPC Arabia llurgy engineered steel structures plant in + Arabian Adra Roots Aga Khan AKDN to develop a 5‐star Boutique Develop‐ Switzer Hotel in Damascus which will involve Tourism, Syria ment ‐ ‐ ‐land the restoration of 3 houses in Old catering Network Damascus (AKDN) The civil engineering company to create Hedley the Holiday Inn Damascus Old City, a Tourism, Syria UAE ‐ ‐ Int’al Group 300‐room property due for completion catering in early 2011

124

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Aga Khan Develop‐ AKDN to develop a 5‐star Boutique Switzer Tourism, Syria ment Hotel in Aleppo which will involve the ‐ ‐ ‐land catering Network restoration of houses in the old centre (AKDN) Russiaʹs Intourist and Syrian Sinara are launching the construction of Jol Tourism, Syria Intourist Russia 10 100 Jammal four‐star hotel complex in catering Latakia The group to build and operate with Concorde local Wahoud Group the Concorde Hotel & Tourism, Syria UAE Tartous, a 5‐star hotel with also tourist 49 500 Residence catering apartments, through a 45‐years BOT Dubai contr Carwood Investment Mohammad Wahoud laid, with British + Junada partners, the foundation stone of the Tourism, Syria UK 197 2 500 Intʹal + Antaradus luxury sea resort in Tartous, catering Wahoud to be managed by Egyptʹs Porto Marina Group UK The company engaged in the wholesale Agro‐ Tunisia AZ‐France France trade of fruit and vegetables to invest in ‐ ‐ business livestock breeding in north‐east Tunisia The London‐based private equity firm Agro‐ Tunisia Actis UK to take a minority stake in Tunisian 6 ‐ business conglomerate Poulina Group Holding The company engaged in the production of cheese and other dairy Agro‐ Tunisia Bongrain France 1 50 products, to create with Hamdi business Meddeb, a 45/55 JV in Boussalem A Tunisian‐Italian JV headed by Francesco Francesco Fiordelisi to set up a freeze‐ Agro‐ Tunisia Italy ‐ 200 Fiordelisi drying plant for fruits and vegetables in business Sidi Smaïl, North of Beja The manufacturer of industrial batteries to set up EnerSys‐Assad, a 51/49 JV with Auto‐ Tunisia EnerSys USA ‐ ‐ local automotive battery maker motive Accumulateur Tunisie Assad The automotive industry supplier to Germa‐ relocate entirely in Tunisia the Auto‐ Tunisia Continental ‐ ‐ ny production of car radios from French motive plant in Rambouillet

125

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The rubber seals manufacturer to open Sealynx a factory in Kondar, to produce the seals Auto‐ Tunisia France ‐ 30 Automotive of two commercial vehicles for the motive French companies Renault & Citroën German group to set up a greenfield Germa‐ wiring systems manufacture in Kef‐Est Auto‐ Tunisia Coroplast 17 2 500 ny industrial zone, hiring 2500 people by motive 2010 The automotive supplier to set up a cable factory in El Aguila industrial Auto‐ Tunisia Yazaki Japan 26 2 500 zone (Gafsa), whose production will be motive entirely exported Germa‐ German manufacturer of car wiring Auto‐ Tunisia Draxlmaier 22 2 950 ny systems to expand its factory in Siliana motive The Japanese hospital group to build Tokushukai the first Tunisian private hospital for a Tunisia Medical Japan Other 38 750 sum of TND 65 million, creating 750 Corporation jobs Kuwaitʹs Burgan to take stakes in Tunis Bank & Tunisia Burgan Kuwait ‐ ‐ International Bank insurance Qatar Qatar National Bank (QNB) to take over Bank & Tunisia National Qatar the Qatar governmentʹs 50 % stake in ‐ ‐ insurance Bank (QNB) Tunisian‐Qatari Bank The company to acquire a 20% stake in Bank & Tunisia Kipco Kuwait Hannibal Lease, a leasing company ‐ ‐ insurance owned by Tunisiaʹs Djilani Group M.A. Kharafi The subsidiary of Kuwaitʹs Kharafi to Group / Al acquire a 10% stake in Hannibal Lease, Bank & Tunisia Kuwait ‐ ‐ Mal a leasing company owned by Tunisiaʹs insurance Investment Djilani Group Company Attijariwafa The former Banque du Sud, now Bank + Moro‐ dominated by the tandem formed by Bank & Tunisia 8 ‐ Santander / cco Santander and Attijariwafa Bank, to insurance Attijari Bank spend TND 25 mln in new headquarters The French insurance company to Bank & Tunisia Groupama France acquire a 35% stake in Tunisiaʹs STAR 72 ‐ insurance for EUR 72 million The building company focused on PW, Tunisia Tecnis Italy major transport infrastructure projects utilities, ‐ ‐ to expand in Tunisia logistics PW, Bermu‐ The maritime transportation group to Tunisia BW Group utilities, ‐ ‐ das create a subsidiary in Tunisia logistics

126

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The company specialising in waste Pizzorno management to contract with the City of PW, Tunisia Environ‐ France Tunis in order to manage and utilities, ‐ ‐ nement rejuvenate the Djebel Chékir garbage logistics dump Société The promoter controlled Saudi immobilière PW, Saudi investors to launch the construction of a Tunisia tuniso‐ utilities, 56 ‐ Arabia large shopping centre within the Tunis saoudienne logistics City Centre project (SITS) Abu Dhabi Investment Authority (ADIA) / ADIH to launch in Tunis its Porta Moda PW, Abu Dhabi Tunisia UAE real estate project land plots provided utilities, 4 600 ‐ Investment by Gulf Finance House logistics House (ADIH) + Gulf Finance House The subsidiary of Germanyʹs Linde AG Linde AG / Germa‐ that specialises in gas for industrial and Tunisia Chemicals ‐ ‐ Linde Gas ny domestic use to acquire a 40% stake in Tunisie Gaz Industriel Portuguese cement maker to double Cement, Portu‐ Tunisia Cimpor production at Société Les Ciments de glass, ‐ ‐ gal Jbel Oust (CJO), its local subsidiary minerals The group to buy from BINA Holding a Gulf Cement, significant stake in Carthage Cement, a Tunisia Investment Kuwait glass, ‐ ‐ Greenfield cement plant under House minerals construction (ready mix and brick plant) The private equity firm to acquire 49% ECP ‐ EMP Cement, of Société dʹarticles dʹhygiène (SAH), a Tunisia Africa Fund USA glass, 33 ‐ producer of Lilas‐branded hygiene II minerals products Catalan group to buy from Spanish Cement, Cementos Tunisia Spain Prasa the Tunisian cement producer glass, 86 ‐ Molins Sotacib minerals The group to launch another capacity Cement, Semapa / Portu‐ expansion programme at Société des Tunisia glass, 84 30 Secil gal ciments de Gabès (SCG), the local minerals cement company acquired in 2000 The producer of extruded tiles for floors Cement, & coatings to create with Carthago Tunisia Laria SPA Italy glass, 6 100 Ceramic a 50/50 JV, Laria International, minerals which will be located in Hencha

127

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The World Bank agency dedicated to Elec‐tronic World Bank the private sector to buy 19% of Fuba Tunisia USA compo‐ ‐ ‐ / IFC Printed Circuits Tunisia and support its nents expansion The specialist in screen texture Prodelec / Elec‐tronic equipment for the electronic industry to Tunisia Prodelec France compo‐ ‐ 6 set up in Tunis a North African North Africa nents production and distribution subsidiary The electronic company to open a Elec‐tronic Germa‐ Tunisia Zollner factory in Béja which will produce compo‐ ‐ 20 ny inductive components nents The electronic subcontractor to relocate Lacroix SA / Elec‐tronic its existing Zriba factory to a larger site, Tunisia Lacroix France compo‐ 7 150 and double its local manpower up to Electronique nents 300 The private equity firm to acquire 13.9% Int’al of Automobile Reseau Tunisien et Distri‐ Tunisia Investment Bahraïn 132 ‐ Services (ARTES), exclusive distributor bution Bank (IIB) of Nissan, Renault and Dacia The embedded software branch of the LG South Korean group to set up a branch office Electronic Tunisia ‐ ‐ Electronics Korea in Tunis Regional R&D Centre ware dedicated to mobile telephony Creation of a JV between Tunisian Moro‐ businessman El Arem and Moroccan Electronic Tunisia Kadmiri ‐ ‐ cco group Kadmiri for the production of air ware conditioners The white goods manufacturer to team Indesit / up with Poulina, whose subsidiary Electronic Tunisia Antonio Italy ‐ 1 000 FRIGAN will carry out production and ware Merloni sale of its Merloniʹs ARDO products Australian oil company gets a 5‐years Cooper Austra‐ Exploration Licence in Bargou, which Tunisia Energy ‐ ‐ Energy lia includes 200 square km of 3‐D seismic and one exploration well Canadian energy company to bid DualEx successfully for the Bouhajla Tunisia Energy Canada Energy ‐ ‐ Exploration Block in Eastern onshore Int’al Tunisia Irish energy group to be granted new 3‐ Tunisia Petroceltic Ireland years exploration permit for the Ksar Energy ‐ ‐ Hadada site

128

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The group to launch drilling Candax programme at the Ezzaouia 17 and 18 Tunisia Canada Energy ‐ ‐ Energy fields, while its exploration permit for the Chaal block was renewed for 2 years The oil & gas exploration company was Pioneer awarded the Cherouk concession, Tunisia Natural USA Energy ‐ ‐ which includes 8 fields in the Ghadames Resources Basin, southern Tunisia The group to become operator for the Canadian ‘7th of Novemberʹ block, spread Tunisia Superior Canada Energy ‐ ‐ between Tunisian and Libyan waters, Energy with Tunisian‐Libyan JV Joint Oil The oil & gas exploration company to sign a farm‐in agreement with Tethys Tunisia Circle Oil Ireland Energy ‐ ‐ Oil and Mining and get a 70% working interest in the offshore Mahdia permit The group is to buy the assets of Exxon Libyan Mobil Tunisia, i.e. a network of 380 gas Tunisia Petroleum / Libya Energy ‐ ‐ stations plus 2 asphalt factories in Tunis Naft Libya and Sfax The company engaged in wind power Tunisia Eurowind Sweden Energy ‐ ‐ generation to open a branch in Tunisia The Egyptian energy group to get the Timgad Tunisia Egypt ʹKondarʹ oil exploration license covering Energy 1 ‐ Energy 972 km2 in the Sousse governorate Tunisia grants an oil and gas Royal Dutch Nether‐ exploration permit to Shell Tunisia, in Tunisia Shell / Shell Energy 2 ‐ lands partnership with ETAP, in the southern Tunisia region of Gabes Cairn The oil and gas exploration company Energy / was awarded the offshore oil Tunisia UK Energy 2 ‐ Reap exploration licence ‘Nabeulʹ, in Tunisia association with Tunisian ETAP The JV between French Soprodis and Other Australian Oil Search will work ETAP Tunisia Primoil Energy 3 ‐ country on a concession in the Kef region, investing USD 5 million in exploration The oil and gas exploration firm focused Eurogas on Spain and Tunisia to invest USD 5 Tunisia Canada Energy 3 ‐ Corporation mln by the end of 2008 in several drilling programs in Ras el Besh‐Sfax Cooper Austra‐ exploration permit in costal Hammamet Tunisia Energy 6 ‐ Energy lia region

129

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The Canadian energy group announces Talisman millions of dollars of capital Tunisia Canada Energy 7 ‐ Energy expenditure for its developments in Tunisie Vietnam Oil and Gas Petrovietnam and Vietsovpetro will Corp (Petro‐ Viet explore for TND 16 mln a block near Tunisia Energy 9 ‐ vietnam) / Nam Gabes in partnership with state‐owned Vietsov‐ ETAP petro The oil and gas company to invest Al Thani Tunisia UAE millions of dinars in drillings on its 3 Energy 16 ‐ Corporation blocks in El Jem and in Tozeur Amsterdam‐based energy group to Delta Nether‐ spend USD 125 mln on Eurogas and Tunisia Hydro‐ Energy 82 ‐ lands APEXʹs Sfax Permit for a 50% carbons participation The firm engaged in electricity transport Terna ‐ Rete and STEG to create a JV for managing Tunisia Elettrica Italy Energy 2 000 ‐ the construction of a power plant in El Nazionale Haouria The UK‐based company to acquire a GB prospecting licence for the Nord Tunisia UK Energy 1 5 Petroleum Anaguid block located in the region of Tataouine, for USD 1 million The firm engaged in the manufacturing of electrical, electonics and Electr. Tunisia FEM‐AERO France ‐ ‐ electromechanical equipments to set up hardware a plant Toulouse‐based manufacturer of Actielec electronic equipments to set up for EUR Electr. Tunisia Techno‐ France 5 50 5 million a second production plant in hardware logies Tunisia Fidelio, a provider of business management software for the Micros / Tunisia USA hospitality industry, to set up a Software ‐ ‐ Fidelio subsidiary for development and maintenance eXo The French collaborative software Tunisia Platform France editor to open a subsidiary in Tunisia to Software ‐ ‐ SAS develop its business in Africa The UAE‐based expert in billing Billcom Tunisia UAE software systems to set up a subsidiary Software ‐ ‐ Consulting in Tunis

130

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The software services provider to set up Tunisia Sodifrance France Software ‐ ‐ a branch in Tunisia The provider of IT solutions to airlines Switzer & airports teams up with Tunisair & Tunisia SITA / AISA Software ‐ ‐ ‐land Medsoft to create the AISA JV to carry out the IT outsourcing of Tunisair engineering and consulting group to Segula acquire the Tunisian assets of software Tunisia Techno‐ France Software ‐ ‐ services company Mapsys, which will logies become IGM / Mapsys Tunisie The information technology consultancy and services company to Tunisia Aedian France Software ‐ 10 create Aexia, a subsidiary, in JV with the local Oxia Génitech clones its Toulouse IT branch Tunisia Génitech France Software ‐ 10 (Génigraph) in Tunisia The firm specialising in computer aided Tunisia IGE+XAO France design (CAD) to create a new local Software ‐ 10 subsidiary The software publisher and integrator to create an affiliate specialised in Tunisia Tessi France Software ‐ 12 development and maintenance as well as in data copying and processing The BPO services provider to develop new activities in information systems Tunisia Owliance France maintenance, validation, and Software ‐ 150 development for French insurance broker SPB The BPO services provider to build a 900‐positions offshore customer service Tunisia Owliance France Software ‐ 900 centre in Chotrana industrial zone near Tunis The machine tool manufacturer to open Mechanics Jacques Tunisia France a production facility of mechanics & ‐ ‐ Remonnay equipments in Tunis machinery Aero‐ Zodiac / The group to relocate in Tunisia part of nautical, Zodiac Tunisia France its production of inflatable boats and naval & ‐ ‐ Marine & pools railway Pools equipment Aero‐ The mechanical and hydraulic systems nautical, manufacturer (aviation industry) to set Tunisia Slicom Int’al France naval & ‐ 20 up Slicom Aero Tunisie (SAT railway Industries), with production facilities equipment

131

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Aero‐ The firm engaged in the machining of nautical, complex electronic, micromechanical, Tunisia MCSA France naval & ‐ 25 pneumatic and hydraulic assemblies to railway create a factory equipment Aero‐ The Italian light aircraft manufacturer Storm nautical, to set up a production and assembly Tunisia Aircraft / Italy naval & 2 60 plant in Mateur, whose production will Avionav railway be entirely exported equipment Aero‐ The aeronautical supplier to set up nautical, Mecahers + TMISʹwith French Sotip, a 80/20 JV Tunisia France naval & 2 300 Sotip / TMIS located in Soliman (Tunis), which will railway produce electric boxes equipment The specialist in energy efficiency to StrategEco Consul‐ make a foray in the market of eco‐ Tunisia Solar / France ting & ‐ ‐ friendly engineering in partnership Eneovia services with local BSB group The expert in contact centre Consul‐ Tele‐ management to strengthen its local Tunisia France ting & ‐ ‐ performance services after the total transfer of the services technical assistance of Neuf Cegetel The company engaged in technical Consul‐ CETIM services for mechanical industries to Tunisia France ting & ‐ ‐ France create with the local firm TIC a joint services subsidiary, CIES, located in Tunis The CRM software specialist to settle C.B.C. Consul‐ down in the business incubator of Bejaʹs Tunisia DEVELOPP France ting & ‐ ‐ ʹInstitut supérieur des études EMENT services technologiques The provider of booking and ancillary Consul‐ service for low cost airlines to set up a Tunisia Airsavings France ting & ‐ ‐ subsidiary in Tunisia, following the services expansion of the local market The company specialised in the e‐ Consul‐ Moro‐ recruitment of executives to set up a Tunisia Rekrute.com ting & ‐ 15 cco branch in Elgazala technopark, in services Ariana in order to launch in Tunisia The innovation consulting and engineering group to form with local Consul‐ Tunisia Altran France Telnet a regional JV subsidiary ting & ‐ 300 headquartered in Tunis with a branch in services Sfax

132

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The provider of software and machines solutions for textiles industries to Tunisia Lectra France Textile ‐ ‐ expand in fashion, automotive, industrial textile, and aeronautics Italian textile group to set up a first exporting unit in Gafsa employing 40 Tunisia Benetton Italy Textile ‐ 40 people and which will provide work for 4 subcontracting units Italian textile group to set up a plant in Kasserine employing 75 people and Tunisia Benetton Italy Textile ‐ 75 which serves 20 subcontracting firms with a current workforce of 2000 Italian textile group to buy the ICAB Niggeler & factory in Bir El Kassaa industrial zone Tunisia Italy Textile 12 75 Kupfer and turn it into a modern spinning factory The textile group plans to set up 3 more exporting units in the greater Gafsa Tunisia Benetton Italy Textile 1 340 region, in Metlaoui, Laguila and Mdhila, providing jobs to 340 people The bed linen fabrics manufacturer to Martinelli create Magimed, a textile mill & Tunisia Italy Textile 31 400 Ginetto weaving unit in the industrial area of El Mghira, Ben Arous governorate The safety and occupational footwear Tunisia Cofra Italy manufacturer to create a factory in Textile 11 2 000 Tabarka TUI / RIU The Spanish hotels chain, part of TUI, to Germa‐ Tourism, Tunisia Hotels & renovate thoroughly the Riu Imperial ‐ ‐ ny catering Resorts Marhaba, with a new spa The Spanish hotel brand, part of TUI, to TUI / RIU Germa‐ open by April 2009 the ClubHotel Riu Tourism, Tunisia Hotels & ‐ ‐ ny Marco Polo, a luxury hotel in catering Resorts Hammamet LAICO / LAICO The investment arm of the Libyan Hotels government to create with the Tunisian Tourism, Tunisia Libya ‐ ‐ Manage‐ Travel Services Group (TTS), the 51/49 catering ment JV Laico Hotels Management Company Company The Spanish hotels chain, part of TUI, to TUI / RIU Germa‐ open in June 2009 the Riu Palace Tourism, Tunisia Hotels & ‐ ‐ ny Hammamet Marhaba, a luxury hotel in catering Resorts Hammamet

133

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Libyan African The Libyan sovereign fund to acquire Tourism, Tunisia Investment Libya 100% of Karthago Hammamet and ‐ ‐ catering Company Karthago Djerba hotels (LAICO) The Libyan Arab African Investment Lafico / Company to acquire a 100% of SERT, Tourism, Tunisia Libya ‐ ‐ Laaico the holding owning the 5‐stars hotel catering Karthago Hammamet La Libyan Arab African Investment Lafico / Company acquiert 100% de la Tourism, Tunisia Libya ‐ ‐ Laaico COMMERT, la holding propriétaire de catering lʹhôtel 4 étoiles Karthago Djerba Tepe Akfen The catering services company of the Ventures airport operator TAV to get a Tourism, Tunisia (TAV) / BTA Turkey concession for 2 food and beverage ‐ 30 catering Catering outlets at Habib Bourguiba Airport until Services 2047 The Finnish coffee shop chain to invest Robert’s Agro‐ Turkey Finland USD 2.5 million to create a coffee ‐ ‐ Coffee business roasting facility Abu Dhabi Investment House Vision3, a MENA‐focused investment (ADIH) + fund created by 3 Gulf‐based firms to Agro‐ Turkey UAE ‐ ‐ Ithmaar ink a deal on financing projects in the business Bank + Gulf agricultural sector Finance House Morning California‐based company to buy Agro‐ Turkey Star USA Turkish Tat Konserve the 10% stake it 2 ‐ business Company holds in Harranova Besi Coca‐Cola Icecek, a JV in which Coca‐ Coca‐Cola / Cola has a 36% stake, to invest USD 40 Agro‐ Turkey Coca‐Cola USA 10 ‐ mln in expanding Dogadanʹs tea business Icecek beverages plant Central Israelʹs Central Bottling Company Bottling Group to buy Danish brewer Agro‐ Turkey Israel 53 ‐ Company Carlsbergʹs 95.6 % stake in Turkish unit business (CBC) Turk Tuborg British British American Tobacco to win the American Agro‐ Turkey UK auction for Turkish cigarette maker 1 131 ‐ Tobacco business Tekel thanks to a USD 1.72 billion bid (BAT)

134

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Korean The cigarette producer to inaugurate its Tobacco & South first Turkish factory in the province of Agro‐ Turkey 33 50 Ginseng Korea Izmir, which will ship 60% of its output business (KT&G) to Europe and Iran Coca‐Cola / Coca‐Cola Icecek, a JV in which Coca Agro‐ Turkey Coca‐Cola USA Cola has a 36% stake, has bought land ‐ 250 business Icecek to build a factory in Elazig Volvo / The group to sign a partnership Auto‐ Turkey Renault Sweden agreement with local Karsan in order to ‐ ‐ motive Trucks assemble its trucks in Turkey by 2008‐09 The car manufacturer teams up with PSA Turkish Karsan to develop and Auto‐ Turkey Peugeot France ‐ ‐ manufacture the Berlingo First and motive Citroen Partner Origin delivery vans The Italian bank groups buys 20% of Auto‐ Turkey Unicredit Italy ‐ ‐ Turkish automotive supplier Martur motive The manufacturer to form a JV Mahindra & marketing network with ILCE Otomotiv Auto‐ Turkey India ‐ ‐ Mahindra for the local distribution of its utility motive vehicles and tractors German automotive industry supplier to acquire 89.66% of Oltas SPA, its Germa‐ Auto‐ Turkey Continental exclusive tire distributor for the ‐ ‐ ny motive Continental, Uniroyal and Barum brands The automotive parts supplier to open Tomkins / facilities in Istanbul which will serve as Auto‐ Turkey UK ‐ ‐ Gates centres for gas liquids engineering and motive distribution The Stuttgart‐based automotive Germa‐ Auto‐ Turkey Mahle company to take control of Turkish firm ‐ ‐ ny motive Mopisan by buying 60% of its capital Partnership between the US‐based group and local car maker BMC, owned Auto‐ Turkey Cummins USA ‐ ‐ by Turkish Çukurova Group, for the motive production of engine parts in Izmir The German industrial company Germa‐ envisages investing EUR 5 million to Auto‐ Turkey Benteler 5 ‐ ny construct an auto spare parts factory in motive Adapazari The German group and its local partner Germa‐ Dogus Group is to create a tipper truck Auto‐ Turkey Meiller 5 ‐ ny and semi‐trailers factory in Sakarya, motive through a 51/49 JV

135

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The producer of heavy trucks to create a Germa‐ Auto‐ Turkey Krone semi‐trailers factory near Izmir, through 21 ‐ ny motive a 51/49 JV with Turkey‐based Dogus The commercial vehicles manufacturer to increase its stake up to 20% in Auto‐ Turkey Isuzu Japan 33 ‐ Anadolu Isuzu (Asuzu), its Turkish JV motive with local Anadolu Isuzu + The JV involving Japanese Isuzu and Itochu / Itochu and Turkish Anadolu Group to Auto‐ Turkey Anadolu Japan 39 ‐ produce in Gebze the new 4x4 Isuzu D‐ motive Isuzu Max (Asuzu) The group to buyback minority shareholders in Turkish tyre businesses Auto‐ Turkey Pirelli Italy 43 ‐ Turk Pirelli Enerji, and Istanbul‐based motive Celikord (aluminum products) The JV formed by Italyʹs Fiat and local Koc Holding to invest EUR 360 million Auto‐ Turkey Fiat / Tofas Italy 133 ‐ to develop new car models and extend motive production capacity The investor to set up with Ozcan Varol Wolfram Germa‐ a JV truck factory in Elazig, aiming to Auto‐ Turkey 150 55 Muller ny sell the vehicles in Iraq, Syria, Georgia motive & Azerbaijan The automotive parts supplier to open a Tomkins / plant in Izmir Free Trade Zone, which Auto‐ Turkey UK ‐ 100 Gates will manufacture lubrication oil, pumps motive and belts for vehicles Indian automotive giant to manufacture its Xenon pickup trucks in Turkey Auto‐ Turkey Tata Motors India ‐ 250 through a partnership with local Isotlar motive Group Inteltek, JV between the gambling Intracom infrastructure supplier and Turkcell, Turkey Group / Greece Other ‐ ‐ Turkish mobile phone operator, to run Intralot Iddaa, a popular sports betting game Nether‐ Euromedic International to acquire 12 Turkey Euromedic Other ‐ ‐ lands dialysis centers accross the country Alpha Russiaʹs Alpha group to buy from IAG Turkey Group / A1 Russia Capital partners a 52% stake in AFM Other 6 ‐ Velios Cinemas, a nationwide cinema circuit

136

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Marfin Hygeia, the health branch of the Greek Investment investment holding, to buy 50% plus 1 Turkey Group Greece Other 32 ‐ share of Safak Hospital Group, which (MIG) / runs 4 hospitals in Istanbul Hygeia Qatar Investment Al Wasaeel International Media Co to Authority purchase a 25% stake in popular Turkey Qatar Other 230 ‐ (QIA) / entertainment TV channel ATV and the Lusail Int’al newspaper Sabah Media Abraaj The Dubai‐based buyout firm to Capital / increase its stake up to 54% in hospital Turkey UAE Other 292 ‐ Almond operator Acibadem Saglik Hizmetleri & Holding Ticaret for USD 443.3 mln The Swiss‐based firm takes control of Zurich Switzer Turkish insurer TEB Sigorta and puts a Bank & Turkey Financial ‐ ‐ ‐land foot in an insurance market in strong insurance Services growth Unicredit / Yapi Kredi Bank, a 81.8% subsidiary of Koc Bank & Turkey Italy KFS, to open 160 branches in 2008 and ‐ ‐ Financial insurance reach a total 1000 by the end of 2009 Services Dutch insurance group to acquire 100% Nether‐ of Ankara Emeklilik Anonim Sirketi, a Bank & Turkey Aegon ‐ ‐ lands Turkish life insurance and pension insurance provider Kuwait Kuwait Turk, the 3rd Islamic bank in Finance Bank & Turkey Kuwait Turkey, plans to increase the number of ‐ ‐ House insurance its branches to 113 by the end of 2008 (KFH) The French company, partner of BNP Paribas Bank & Turkey France Turkish Economy Bank, to relocate its ‐ ‐ / TEB insurance R&D centre from France to Turkey The bank owned by State‐run Dubai Taib Bank Holding, to buy Istanbul‐based financial Bank & Turkey UAE ‐ ‐ BSC advisory firm PDF, through its local insurance subsidiary TAIB YatirimBank The Israeli group to take control of Turk Nippon Sigorta, in the hope that it can Bank & Turkey Harel Israel 2 ‐ revive the Turkish insurance group insurance after 4 years of inactivity

137

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Kuwait KFH to increase the capital of Kuwait Finance Turk by 22%, which is currently Bank & Turkey Kuwait 32 ‐ House TRY260m (USD220m), to reach TRY insurance (KFH) 317.2m Israelʹs largest bank to inject a further Bank USD65 mln into BankPozitif, increasing Bank & Turkey Israel 43 ‐ Hapoalim its stake in the Turkish bank up from insurance 57.55% to 65% The Dutch bank to acquire Turkish ING / Oyak Nether‐ Bank & Turkey voluntary pension fund Oyak Emeklilik 110 ‐ Bank lands insurance for 110 million euros The Paris‐based insurer to buy a 99% stake in Guven Sigorta and its life‐ Bank & Turkey Groupama France 189 ‐ insurance branch Guven Hayat for TRY insurance 350 million The French company to acquire the remaining 50% stake in the Turkish Bank & Turkey Axa France 345 ‐ insurance group Axa Oyak Holding, insurance funded in 1999 as a 50/50 JV with Oyak Le premier assureur européen rachète à Germa‐ son partenaire turc ses parts dans Koc Bank & Turkey Allianz 373 ‐ ny Allianz Sigorta et Koc Allianz Hayat & insurance Emeklilik National National Bank of Greece to buy Bank of remaining 9.7% stake in Finansbank Bank & Turkey Greece 459 ‐ Greece from FIBA Holding, reaching a total insurance (Ethniki) shareholding of 86.5% Cardif, the BNP Paribas Assuranceʹs life BNP Paribas Bank & Turkey France insurance company, to open an office in ‐ 20 / Cardif insurance Sisli, a suburb area of Istanbul The French & Belgian bank to increase Bank & Turkey Dexia France the capital of its subsidiary DenizBank 215 160 insurance and open 80 new branches in 2008 The new owner of Oyak bank to invest Nether‐ heavily in the expansion of its network, Bank & Turkey ING ‐ 2 500 lands planning to open 150 new branches by insurance 2012 Construction with Turkish groups Trump PW, Dogan, Tasyapi and Yesil Insaat of the Turkey Organi‐ USA utilities, ‐ ‐ Trump Towers, a mixed‐use project in zation logistics Istanbulʹs Sisli district

138

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Unicorn Investment The Islamic investment bank to set up Bank / Turquoise Coast Investment Company, PW, Turkey Turquoise Bahraïn a real estate investment company utilities, ‐ ‐ Coast targeting projects in the Bodrum logistics Investment Peninsula Company City Centre The group to open 2 representative Holdings PW, Luxem‐ offices in Bodrum and Istanbul and Turkey (CCH) / utilities, ‐ ‐ burg create with a local partner the Monarch Monarch logistics Court brand, for future projects Court HAL Trust / The group to acquire GY Elyaf and set HAL PW, Nether‐ up in Yalova (Marmara sea) a storage Turkey Holding utilities, ‐ ‐ lands terminal for liquid bulk chemical, oil N.V. / logistics and vegetable oil products Vopak The regional branch of global logistics PW, CEVA giant CEVA Group to ink a multi‐year Turkey USA utilities, ‐ ‐ Logistics distribution contract with Numil, a local logistics subsidiary of Franceʹs Danone Construction of a new port in Izmir PW, Turkey Costa Italy (western Turkey) with the cooperation utilities, ‐ ‐ of Italyʹs Costa logistics Manara The Saudi‐backed investment group to PW, Saudi Turkey Investments acquire a 21% stake in ACT Airlines, an utilities, ‐ ‐ Arabia Ltd. Istanbul‐based cargo carrier logistics Dutch Acteeum and Austrian Atrium PW, Acteeum + Nether‐ are jointly building the Ancora Samsun Turkey utilities, ‐ ‐ AERE lands shopping centre, scheduled to be logistics inaugurated in 2009 Dutch Acteeum and Austrian Atrium PW, Acteeum + Nether‐ are jointly building the Ancora Adana Turkey utilities, ‐ ‐ AERE lands shopping centre, scheduled to be logistics inaugurated in 2010 Dutch and Austrian promoters are PW, Acteeum + Nether‐ Turkey jointly building the Ancora Tokat utilities, ‐ ‐ AERE lands shopping centre, due to open by 2010 logistics The promoter to develop by 2010 the PW, Acteeum + Nether‐ Ancora Sanliurfa shopping centre, with Turkey utilities, ‐ ‐ AERE lands Atrium European Real Estate (AERE, logistics ex‐ Meinl European Land)

139

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The promoter to develop by 2010 the Ancora Kahramanmaras shopping PW, Acteeum + Nether‐ Turkey centre, with Atrium European Real utilities, ‐ ‐ AERE lands Estate (AERE, ex‐ Meinl European logistics Land) The industrial conglomerate to acquire PW, Fuji Heavy Turkey Japan a 10% stake in Baytur, a Turkey‐based utilities, 4 ‐ Industries company specialising in construction logistics Camper & The Turkish‐British consortium to be PW, Turkey Nicholsons UK awarded a 25‐year contract to manage utilities, 5 ‐ + IC Yatirim and develop the Cesme Marina logistics Sharjah‐based port operator to form a PW, Turkey Gulftainer UAE 50/50 JV with Turkish logistics company utilities, 10 ‐ Demas logistics City Centre The property investment company to Holdings PW, Luxem‐ build the Monarch Court Hebil, a 36‐ Turkey (CCH) / utilities, 22 ‐ burg apartments residential complex in the Monarch logistics Bodrum area Court City Centre The property investment company to Holdings PW, Luxem‐ build the Monarch Court Yalikavak, a Turkey (CCH) / utilities, 22 ‐ burg 97‐apartments residential complex in Monarch logistics the Bodrum area, due for June 2009 Court City Centre The property investment company to Holdings PW, Luxem‐ build the Monarch Court Bodrum, 12 Turkey (CCH) / utilities, 22 ‐ burg villas and 18 apartments in Bodrum, Monarch logistics due for June 2009 Court The real estate investor to open new PW, Nether‐ Turkey Corio 100%‐owned‘365ʹ shopping centre in utilities, 27 ‐ lands Ankara logistics Icelandʹs property investment fund PW, Investum / LAREF to partner with Turkeyʹs AB Turkey Iceland utilities, 41 ‐ LAREF Invest for the White Side Apartments logistics project in Cekmekoy, Istanbul Malaysia A consortium of Malaysia Airports Airports,Temak, and GMR PW, Malay‐ Turkey Holdings Infrastructure will build an utilities, 50 ‐ sia Berhad international terminal at Istanbul Sabiha logistics (MAHB) Gokcen airport for EUR250 mln

140

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m A consortium of GMR Infrastructure, Temak, and Malaysia Airports, will PW, GMR Infra‐ Turkey India build an international terminal at utilities, 100 ‐ structure Istanbul Sabiha Gokcen airport for logistics EUR250 ml Taurus Taurus of Galata Gayrimenkul Yatirim, PW, Investment JV by two US real estate investment Turkey USA utilities, 100 ‐ + Apollo companies, to acquire several properties logistics Real Estate in Istanbul The Islamic bank to set up Bosphorus Ithmaar Modaraba, an investment vehicle PW, Turkey Bank / Bahraïn targeting real estate developments in utilities, 197 ‐ Shamil Bank Istanbul and secondary homes on the logistics coast The Dutch real estate company to build PW, Nether‐ the Gordion shopping centre located in Turkey Redevco utilities, 200 ‐ lands Ankaraʹs Çayyolu district, scheduled to logistics be open in 2009 The Dutch real estate company to build PW, Nether‐ a new shopping centre in Erzurum Turkey Redevco utilities, 200 ‐ lands (Eastern Anatolia), scheduled to start logistics operations in 2009 The Dutch real estate company to build PW, Nether‐ a new shopping centre in Edirne Turkey Redevco utilities, 200 ‐ lands (Western Turkey), scheduled to open in logistics 2010 The Turkish subsidiary of Dubai‐based PW, Emaar Emaar Properties to acquire from local Turkey UAE utilities, 273 ‐ Properties Toprak Holding several hectares of land logistics in Istanbul NY‐based investor to team up with local PW, Apollo Real Multi Turkmall to create a shopping Turkey USA utilities, 300 ‐ Estate mall on the land bought from Carrefour logistics in Merter The Azeri State‐owned oil company to PW, Azer‐ Turkey SOCAR buy 50% of Tekfen Holding, a Turkish utilities, 355 ‐ baidjan company specialising in construction logistics Dutch and Austrian promoters are PW, Acteeum + Nether‐ Turkey jointly building the Ancora Istanbul utilities, 360 ‐ AERE lands shopping centre, due to open by 2011 logistics The Jersey‐based fund manager to PW, Cordea build, through the ‘Turkish Property Turkey UK utilities, 400 ‐ Savills Ventures Fundʹ, shopping centres and logistics residential buildings

141

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The Germany‐based logistician to PW, Germa‐ Turkey DHL establish in Istanbul its headquarters for utilities, 683 ‐ ny the MENA region logistics The Dutch company partners with Corio + PW, Nether‐ Acteeum to create a new EUR 50 million Turkey Acteeum utilities, 50 50 lands shopping centre in the city of Tarsus, Group logistics scheduled to open in 2011 The Netherlands‐based group invests PW, Nether‐ EUR 116 million to establish a new Turkey Corio utilities, 116 50 lands shopping centre in Iskenderun, logistics scheduled to open in 2010 The Dutch real estate firm to build up two shopping centres in the city of PW, Nether‐ Turkey Redevco Manisa (western Turkey), to be utilities, 400 1 000 lands successively inaugurated in 2009 and logistics 2010 Tessenderlo Tessenderlo Kerley to acquire the Chemie / Bel‐ productive assets, brands and Turkey Chemicals ‐ ‐ Tessenderlo gium distribution channels of Agrochem, a Kerley manufacturer of plant nutrient solutions The US‐based giant specialising in chemical products to open a 5000m2 Turkey Huntsman USA Chemicals 8 ‐ textile factory in the Tuzlaʹs industrial zone, near Istanbul The acrylic polymer additives major to Rohm and build a 40,000tpa acrylic impact Turkey USA Chemicals 27 ‐ Haas modifiers and processing aids plant at Gebze with its Turkish partner Polisan SOCAR / The Socar‐Turcas‐Injaz JV eventually Azer‐ Turkey Socar‐ wins control over tate‐run chemicals Chemicals 1 342 ‐ baidjan Turcas‐Injaz maker Petkim for USD 2 bn The company to invest USD 5 billion to SOCAR / Azer‐ enhance Petkimʹs production capacity, a Turkey Socar‐ Chemicals 3 417 ‐ baidjan Turkish petrochemical company in Turcas‐Injaz which it holds a 51% stake Junior Vancouver mineral exploration Cement, Aldridge Turkey Canada company to acquire a 100% stake in glass, ‐ ‐ Minerals mineral licences for uranium deposits minerals Emed The gold and copper exploration Cement, Mining / company, affiliated to Emed Mining, to Turkey Cyprus glass, ‐ ‐ KEFI launch drilling program at Derinin Tepe minerals Minerals gold concession, in the Balikesir area

142

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The exploration and development Cement, group focused on the search for mineral Turkey Stratex Int’al UK glass, ‐ ‐ resources to acquire another gold minerals licence in Oksut Spanish building material manufacturer Cement, Nefinsa / Turkey Spain to buy an existing distribution platform glass, ‐ ‐ Uralita in order to make a foray in Turkey minerals The Turkey‐focused gold explorer to Cement, European create a 51/49 JV with Ariana, aiming at Turkey Canada glass, ‐ ‐ Goldfields exploring gold deposits around Ardala, minerals in NE Turkey Canadian mining group to begin Cement, Eldorado Turkey Canada construction of Efemcukuru gold mine, glass, ‐ ‐ Gold its second in Turkey minerals Nuinsco Resources to buy the Cement, Nuinsco remaining 50% stake in Berta copper‐ Turkey Canada glass, ‐ ‐ Resources gold property in north‐eastern Turkey minerals from its JV partner Xstrata Copper MM Packaging, a branch of the Mayr‐ Austrian paper and carton Cement, Melnhof Turkey Austria manufacturer, to acquire a 60 % stake in glass, ‐ ‐ Group / MM the Izmir‐based folding carton producer minerals Packaging Superpack New‐York based firm to acquire a 17.5% Cement, Morgan Turkey USA stake in Ege Seramik, a Turkey‐based glass, ‐ ‐ Stanley ceramic manufacturer minerals The gold exploration and development Cement, Ariana company to acquire from Odyssey Turkey UK glass, 1 ‐ Resources Resources a 100% of the Tavsan gold minerals project The international paper and packaging Cement, Mondi / Tire company to invest in the production Turkey UK glass, 8 ‐ Kutsan capacities of the Izmit manufacturing minerals plant Titan The building materials producer to Cement acquire a 50% stake in Adocim, which Cement, Company / Turkey Greece has a modern cement plant in Tokat, glass, 91 ‐ Titan and a grinding plant in Tekirdag minerals Cement (Marmara) Group Russiaʹs Sibirskiy Cement to buy for Cement, Sibirskiy EUR 600 mln the Turkish assets of Turkey Russia glass, 600 ‐ Cement Ciments Francais, an Italcementi minerals subsidiary

143

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The mining group to create with Merty Cement, Xtract Energy a 20/80 exploration and Turkey UK glass, 3 15 Energy production JV company initially minerals focused on Turkey Anatolia The mining group to invest up to USD Cement, Minerals 200 mln in the exploitation of the 100%‐ Turkey Canada glass, 132 100 Develop‐ owned Copler Gold Project in the minerals ment Province of Erzincan The largest U.S. consumer electronics chain to set up a Turkish subsidiary and Distri‐ Turkey Best Buy Co USA ‐ ‐ open its first store in Istanbul during the bution spring 2009 The American telecommunications distributors to form a 50/50 JV with a Distri‐ Turkey Brightstar USA ‐ ‐ Doganʹs subsidiary to supply its bution countrywide chain of Smile shops The UK‐based owner of French Kesa distribution chain Darty to open 4 new Distri‐ Turkey Electricals / UK ‐ ‐ stores in several Turkish cities, bution Darty including capital city Ankara The company takes control of IT distributor Akoraʹs operations, through Distri‐ Turkey Avnet USA ‐ ‐ a 50,01 / 49,99 JV deal sealed with the bution Turkish parent company Sanko Ho The London‐based investment fund to RP Capital Distri‐ Turkey UK acquire a 49% stake in Bimeks, an ‐ ‐ Group bution electronic consumer goods distributor The Turkish subsidiary of the UK‐based giant food bought for USD 14 million Distri‐ Turkey Tesco UK 9 ‐ several hectares of land in Istanbul to bution expand its activities The Swedish company to open its fourth Turkey‐based store in Bursa, Distri‐ Turkey IKEA Sweden 61 ‐ after having settled in Izmir, Ankara bution and Istanbul in 2005 The Dutch company partners with Corio + Nether‐ Acteeum to create its 9th Turkish Distri‐ Turkey 110 ‐ Acteeum lands shopping centre, in the city of Malatya, bution scheduled to open in 2010 The investment funds gathered in Moonlight, after the buyout in February BC Partners Distri‐ Turkey UK of a 51% in Turkish supermarket chain 1 023 ‐ / Moonlight bution MIGROS Turk, to up their stake to 97.9%

144

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m London‐based buyout firm BC Partners BC Partners Distri‐ Turkey UK to buy from Koc Holding a 51% stake of 1 066 ‐ / Moonlight bution Migros Türk for TRY 1.98 billion Kipa, the Turkish retail chain bought by Distri‐ Turkey Tesco / Kipa UK UK‐based giant Tesco in 2003 is to 1 167 ‐ bution create 100 new stores by 2013 Carrefour / CarrefourSA, a 60/40 JV with local Distri‐ Turkey Carrefour France Sabanci group, to inaugurate its 20th ‐ 100 bution SA Turkish hypermarket, in Istanbul The group specialising in construction Leroy and DIY (do it yourself) lays the Distri‐ Turkey France ‐ 200 Merlin foundations of its first Turkish store in bution Bursa, in partnership with a local Germanyʹs Metro AG to inaugurate a Germa‐ Distri‐ Turkey Metro AG new store in Ankara, creating 300 new 20 300 ny bution direct jobs locally Germanyʹs Metro AG to inaugurate a Germa‐ Distri‐ Turkey Metro AG new store in Konya, creating 300 new 20 300 ny bution direct jobs locally Migros Turk supermarkets, now BC Partners dominated by British investors, to / Moonlight Distri‐ Turkey UK continue their expansion by opening 8 ‐ 500 / Migros bution Migros, 8 Tansas, 65 Sok stores and 1 Turk Ramstore Carrefour SA, a JV with local Sabanci Carrefour / group, to further expand Carrefour Distri‐ Turkey France ‐ 1 000 Carrefoursa Expres (ex‐Gima), a supermarket chain, bution as well as hard discount shops Brazilʹs white goods largest Metalfrio manufacturer to buy a 71% stake in Electronic Turkey Brazil 33 ‐ Solutions Senocak Holding, owner of refrigerator ware maker Klimasan Italian white goods manufacturer to invest extra EUR 40‐50 mln in capacity Electronic Turkey Indesit Italy 40 ‐ expansion in order to manufacture new ware ‘Hotpoint‐Aristonʹ brand The German Giant to increase its Germa‐ production capacity despite global crisis Electronic Turkey Siemens 100 ‐ ny by creating a new factory in the ware industrial city of Gebze The white goods manufacturer to Franke / Switzer expand production capacity in Manisa, Electronic Turkey Faber 5 100 ‐land which will weigh 50% of the groupʹs ware Turkey world production of cooker hoods

145

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m British energy group to buy a 20% JKX Oil & interest in 2 exploration licenses in Turkey UK Energy ‐ ‐ Gas south‐eastern Turkey, in Zagros Foldbelt petroleum province The German electricity and gas Germa‐ company to become the 6th partner of Turkey RWE Energy ‐ ‐ ny the Nabucco gas pipeline project, with a 16.67% stake Germa‐ The German electricity producer Turkey RWE Energy ‐ ‐ ny founded RWE Holding in Istanbul The energy company to start Verbund / construction, through Enerjisa, of a Turkey Austria Energy ‐ ‐ EnerjiSA hydropower station in Kavasak Bendi, in the Adana region Canadian energy group to to farm‐in to Trans‐ Incremental Petroleumʹs license 4262 Turkey Atlantic Canada Energy ‐ ‐ and four additional licenses covering Petroleum 1,863 square kilometers The energy company to start Verbund / construction, through Enerjisa, of a Turkey Austria Energy ‐ ‐ EnerjiSA hydropower station in Hacininoglu, in the Kahramanmara region EDF Energies Nouvelles, a 50%‐owned EDF / EDF subsidiary of EDF, to acquire 50% of Turkey Energies France Energy ‐ ‐ Polat Enerji, a quickly expanding Nouvelles developer of wind farms The company teams up with local Conergy AG Germa‐ group Ataseven to create 10 wind plants Turkey Energy ‐ ‐ / EPURON ny in the cities of Bandirma, Balikesir, Izmir and Manisa Goldman The wholly owned subsidiary of US‐ Sachs / based Goldman Sachs to acquire a 50% Turkey USA Energy ‐ ‐ Cogentrix stake in Turkish company Tasyapi Energy Enerji Grubu The Baku‐based State‐run company envisages building up a new refinery in Socar / Azer‐ Turkey Aliga (North of Izmir) in partnership Energy ‐ ‐ STEAS baidjan with local petrochemical company Turcas IOC to get an option for 12.5% of the Indian Oil USD 1.5 billion Samsun‐Ceyhan oil Turkey India Energy 137 ‐ Corporation pipeline to be built by ENI and Turkeyʹs Calik Group

146

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The group to acquire a 90% stake in Izgaz, a recently privatised gas Turkey GDF Suez France Energy 153 ‐ distribution firm in north‐western Turkey (Izmit) Giant oil company to start oil exploration in the Black sea through a Turkey ExxonMobil USA Energy 176 ‐ 50/50 partnership with local State‐run company TPAO (2 exploration sites) The Austrian electricity producer (50%) Czech and local Akenerji (45%) and Akkok Turkey CEZ Repu‐ Energy 197 ‐ (5%), to acquire Sedas, the electricity blic distribution company in Sakarya Perfect Wind Enerji, the wind power Akuo subsidiary of Akuo Energy, has been Energy / Turkey France granted a license to build a 150 MW Energy 210 ‐ Perfect wind power station in the Kirshehir Wind area Czech The Czech power group buys 37.4% of Turkey CEZ Repu‐ its former partner, Turkish energy Energy 224 ‐ blic distributor Akenerji Elektrik Uretim The group to acquire 60% of Turkish Borasco Elektrik, which is setting up a Turkey OMV Austria Energy 300 ‐ 890 MW gas‐fired power plant in Samsun Russian oil major to buy Turkish fuel distributor Akpet, which operates 693 Turkey Lukoil Russia Energy 329 ‐ gas filling stations, for about USD 500 mln The group and Sabanci, its partner in Verbund / Enerjisa, to acquire each, directly and Turkey Austria Energy 390 ‐ EnerjiSA through their JV, 50% of Ankaraʹs state‐ owned electricity supplier Bedas Enerjisa, a 50‐50 JV of Sabanci and Verbund / Austriaʹs Verbund to invest EUR 500 Turkey Austria Energy 500 ‐ Enerjisa mln in a gas‐fired power plant in Bandirma The group to set up a JV for the creation Indian Oil of new Ceyhan refinery, in which ENI, Turkey India Energy 1 826 ‐ Corporation Kaz MunayGaz, local Calik and IOC will each have 26% The group to acquire Estap, a producer of enclosures and cabinets for VDI Electr. Turkey Legrand SA France ‐ ‐ systems, based in Istanbul with hardware manufacturing facilities in Eskisehir

147

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m GE Healthcare to run markets of Central General Asia, Middle East, Africa, Russia and Electr. Turkey Electric/ GE USA ‐ ‐ Commonwealth of Independent States hardware Healthcare from a single headquarter in Istanbul The manufacturer of cables and cable Saudi Cable Saudi accessories, electro‐mechanical Electr. Turkey Company ‐ ‐ Arabia contractors and electrical equipment to hardware (SCC) buy 79 % of Alimsan Group The French company to acquire 100% of Schneider PKS Profiluks, an Istanbul‐based Electr. Turkey France ‐ ‐ Electric company specialising in the hardware manufacturing of electrical outlets The manufacturer of refrigeration equipment to buy a 86% stake in Electr. Turkey Frigoglass Greece Turkish SFA Cooling, with a view to 50 ‐ hardware reinforcing its exports towards Asians markets The heating and cooling equipment Kiturami specialist to open with local Ilhanli South Electr. Turkey Boiler Sales Group a JV water heater plant in 7 400 Korea hardware Company Catalca (Istanbul) or Cerkezkoy (Tekirdag) The transmission and distribution branch of the French group to invest a Electr. Turkey Areva France 66 600 total EUR 66 mln in expanding its hardware factory in Gebze and creating a new one The French IT consulting company to Turkey Devoteam France acquire Secura and Integra, subsidiaries Software ‐ ‐ of the Tepum group After Tunisia in 2007, the software giant Turkey Microsoft USA decides to create a Microsoft Innovation Software ‐ ‐ Center in Turkish capital Ankara The Moscow‐based company providing Kaspersky Turkey Russia anti‐virus softwares to open a regional Software ‐ ‐ Lab office in Istanbul The Hamburg‐based online business Germa‐ networking company to purchase Turkey Xing Software 4 ‐ ny Turkish cember.net for a sum of EUR 4.4 million The group, which offers software Turkey Rhapso France solutions to the packaging sector, to Software ‐ 30 open a subsidiary in Istanbul

148

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m American The energy technologies company to Super‐ Mechanics team up with Model Enerji to Turkey conductor USA & ‐ ‐ manufacture locally its proprietary Corp machinery WT1650 wind turbine design (AMSC) Amalgamati The manufacturer of farming Mechanics Turkey ons Group / India equipment to open a tractor assembly & 14 ‐ Tafe plant in Manisa industrial zone machinery Mechanics Germa‐ The manufacturer of concrete pumps to Turkey Putzmeister & 20 ‐ ny inaugurate a new factory in Cerkezköy machinery The polymer technology specialist to Trelleborg / Mechanics relocate to existing Turkish operations a Turkey Fluid Sweden & ‐ 250 significant part of Fluid Solutions Solutions machinery activities (Nantes, France) Aero‐ United Creation of Pratt & Whitney Turkish nautical, Techno‐ Technic Aircraft Engine Maintenance Turkey USA naval & ‐ ‐ logies / Pratt Center, a JV engine overhaul facility in railway & Whitney Sabiha Gokcen Airport equipment Aero‐ The private equity firm to acquire a 50% nautical, Turkey Carlyle USA stake in Turkish shipyard TVK, naval & ‐ ‐ specialised in chemical tankers railway equipment Aero‐ The private equity firm to acquire a 50% nautical, Abraaj Turkey UAE stake in Numarine, a Gebze‐based naval & ‐ ‐ Capital luxury‐yacht manufacturer railway equipment The group to form a strategic Aero‐ partnership with Eskisehir‐based nautical, General Turkey USA TULOMSASn which will manufacture naval & 3 ‐ Electric locomotives incorporating GE railway technologies for export equipment Aero‐ The yacht manufacturer teams up with nautical, local Tacar Yachting to set up a new Turkey Fipa Italy naval & 18 250 dock‐yard in Antalya free zone, where railway the Maiora models will be produced equipment Aero‐ The aerospace branch of Dutch Stork to nautical, Stork / Nether‐ Turkey create a factory manufacturing aircraft naval & 8 350 Fokker Elmo lands cables in the Aegean Free Zone, Izmir railway equipment

149

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m Aero‐ The aircraft manufacturer to sign an nautical, EADS / industrial cooperation agreement with Turkey France naval & ‐ 400 Airbus Turkish Airspace Industries (TUSAS) on railway the A350 programme equipment The Japanese pharmaceutical company Daiichi to set up a subsidiary headquartered in Turkey Japan Drugs ‐ ‐ Sankyo Istanbul in order to market locally its products The company to acquire Yeni Ilac, a small pharmaceutical lab, with Turkey Recordati Italy Drugs 48 ‐ production capacities for proprietary and licensed drugs The Greek group to get for EUR 1 mln a 50.1% stake in Turkish copper‐ Meta‐ Turkey Halcor Greece 1 ‐ manufacturing company Sega Bakir, llurgy based in Izmit The India‐based steelmaker to invest an Jindal extra USD 4.5 mln in its Turkish Meta‐ Turkey India 3 ‐ Stainless subsidiary Jindal Stainless Madeneilik llurgy Sanayi Ve Ticaret Prysmian / Turkeyʹs largest cable producer to Türk invest in local R&D capacities while Meta‐ Turkey Prysmian Italy 5 ‐ waiting for clearer global economic llurgy Kablo ve outlook to expand production capacities Sistemleri The Finnish metal sector company to Compo‐ invest EUR 9 mln in expanding its Meta‐ Turkey Finland 9 ‐ nenta casting facilities in Orhangazi near llurgy Bursa, creating 200 new jobs The formwork specialist to build a plant Germa‐ in the Gebze Guzeller industrial district Meta‐ Turkey Doka 10 ‐ ny to provide construction material to llurgy Turkish construction groups The group to acquire Sabanciʹs 50% Bekaert / Bel‐ stake in Beksa, until now a 50/50 JV Meta‐ Turkey Bekaert 40 ‐ gium manufacturing steel wire products and llurgy Iberica metal fibers The Luxembourg‐based company to lift Arcelor Meta‐ Turkey India its holding in Erdemir, Turkeyʹs biggest 572 ‐ Mittal llurgy steel group, up to 25% from 13.7% Global Tanitim, a Turkish PR firm to Consul‐ Turkey Civitas Greece merge with major Greek company ting & ‐ ‐ CIVITAS services

150

Foreign direct investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The real estate & investment Consul‐ Jones Lang management expert to acquire Alkas Turkey USA ting & ‐ ‐ LaSalle Consulting, a leading commercial real services estate consultancy in Turkey The company specialising in the VAT Consul‐ Turkey Vialtis France recovery process to open an agency in ting & ‐ ‐ Istanbul named Vialtis TURKEY services Israelʹs firm to acquire Istanbul‐based Consul‐ Gilon Turkey Israel Ereteam, a company specialising in ting & 1 ‐ Investments business intelligence services Mitsubishi / The conglomerate to buy 45% of Consul‐ Mitsubishi Intercity, a leader in fleet leasing and Turkey Japan ting & 915 ‐ UFJ Lease & fleet maintenance, whose expansion services Finance Co. will cost USD 3 bn over 4 years Elephant IT distributor to establish in Turkey Talk Nether‐ where it creates a local subsidiary Turkey Telecom ‐ ‐ Commu‐ lands named Elephant Talk Turkey and nication headquartered in Istanbul Chennai‐based IT services provider to Dhanus acquire a 100% of Borusan Telekom, Turkey Techno‐ India Telecom 52 ‐ Turkeyʹs first alternative telecom logies operator for EUR 52 mln The company to acquire a 3G license Vodafone / from the Turkish government and sign Turkey Vodafone UK Telecom 250 ‐ with Huawei Technologies to supply Turkey the necessary infrastructure The Riyadh‐headquartered investment Saudi firm to acquire a majority stake in Turkey Swicorp Textile ‐ ‐ Arabia carpet manufacteur Step Hali, also known under the name of Stepevi The US‐based group to invest millions of euros to renew machinery of its Corlu Turkey Leviʹs USA Textile 3 ‐ textile factory (located near the Sea of Marmara) The producer of tents and collapsible Germa‐ buildings to set up a tent production Turkey Röder Textile 10 ‐ ny unit in the city of Düzce (East of Istanbul) The producer of sport lifestyle articles Germa‐ to make a foray in the country by Turkey Puma Textile ‐ 2 500 ny creating a factory in Fatsa with two local partners, Milteks and Cesaka British coffee bar operator teams up Caffe Nero Tourism, Turkey UK with local Isik Asur to open its first bars ‐ ‐ Group catering in Turkey

151

Foreign investments in the Med region in 2008

FDI Host Investor Origin Project Sector Jobs €m The hotel chain to open the Park Hyatt Hyatt Tourism, Turkey USA Istanbul ‐ Macka Palas, a luxury hotel in ‐ ‐ Corporation catering Istanbul The hotel and leisure company to open Tourism, Turkey Starwood USA a W Hotel in the neighbourhood of ‐ ‐ catering Besiktas, in Istanbul The promoter to build a five‐star hotel Acteeum + Nether‐ in Samsun, due to open in 2009, with Tourism, Turkey ‐ ‐ AERE lands Atrium European Real Estate (ex‐ Meinl catering European Land)

152

Foreign direct investments in the Med region in 2008

Annex 2. Direct job creation announced, by sector (ANIMA-MIPO 2008)

Sector Jobs Public works, real estate, transport, utilities 18 018 Car manufacturers or suppliers 16 355 Textile, clothing, luxury 8 180 Tourism, catering 5 178 Glass, cement, minerals, wood, paper 4 940 Mechanics and machinery 4 037 Bank, insurance, other financial services 3 558 Agro‐business 3 130 Distribution 2 450 Drugs 2 350 Consulting and services to companies 1 749 Electric, electronic & medical hardware 1 688 Electronic ware 1 100 Other or not specified 780 Telecom & internet operators 515 Data processing & software 500 Aeronautical, naval & railway equipment 473 Chemistry, plasturgy, fertilizers 400 Energy 385 Electronic components 336 Metallurgy & recycling of metals 21 Total 76 143

153

Foreign investments in the Med region in 2008

Annex 3. Sectoral distribution of FDI projects in 2008 (foreign share in gross budgets as announced & number of projects, ANIMA-MIPO)

Nb. % Amount Sectors % Total projects Total (mln €) Public works, real estate, transport, 128 16,5% 22 611 32,9% utilities Energy 115 14,8% 17 153 24,9% Chemistry, plasturgy, fertilizers 22 2,8% 7 588 11,0% Distribution 25 3,2% 3 894 5,7% Bank, insurance, other financial services 81 10,4% 3 562 5,2% Telecom & internet operators 19 2,4% 1 981 2,9% Tourism, catering 39 5,0% 1 977 2,9% Glass, cement, minerals, wood, paper 42 5,4% 1 935 2,8% Agro‐business 24 3,1% 1 687 2,5% Metallurgy & recycling of metals 15 1,9% 1 399 2,0% Consulting and services to companies 38 4,9% 1 062 1,5% Car manufacturers or suppliers 36 4,6% 664 1,0% Other or not specified 11 1,4% 630 0,9% Data processing & software 55 7,1% 535 0,8% Electric, electronic & medical hardware 31 4,0% 481 0,7% Drugs 16 2,1% 373 0,5% Biotechnologies 4 0,5% 349 0,5% Electronic components 16 2,1% 330 0,5% Textile, clothing, luxury 14 1,8% 220 0,3% Electronic ware 9 1,2% 178 0,3% Mechanics and machinery 12 1,5% 90 0,1% Aeronautical, naval & railway equipt. 22 2,8% 39 0,1% Furnishing and houseware 4 0,5% 24 0,0% Total 2008 778 100,0% 68 763 100,0%

154

Foreign direct investments in the Med region in 2008

Annex 4. Origin-destination cross table 2003-08 (foreign share in gross budgets as announced, ANIMA-MIPO)

Ori‐ Destination Maghreb Machrek Other Med Total gin In € mln Algeria Morocco Tunisia Libya Egypt Jordan Lebanon Palest. Syria Israel Turkey Europe Germany 215 450 68 56 311 5 164 390 402 3 113 5 172 Austria 0 108 219 43 2 683 3 054 Belgium 15 1 269 2 100 21 1 178 2 584 Denmark 8 60 0 347 55 0 4 473 Spain 1 015 3 796 456 570 355 44 80 80 406 6 801 Finland 0 0 2 0 69 113 184 France 1 972 5 302 534 468 8 383 180 11 23 378 5 622 22 873 Greece 41 75 675 73 4 910 5 775 Italy 187 472 727 1 176 2 938 38 0 34 37 1 446 7 056 Netherlands 114 44 110 306 84 0 0 64 94 4 885 5 701 UK 281 213 1 340 658 4 475 2 6 80 111 2 324 8 756 18 246 Sweden 0 4 266 125 1 141 2 587 3 124 Switzerland 192 465 0 26 195 80 0 6 157 409 1 529 Other Eur. 1 654 337 114 210 2 2 10 0 146 24 811 3 310 America Canada 238 66 154 1 696 1 192 80 528 105 92 4 151

USA 1 355 965 261 1 271 2 268 538 88 6 125 23 395 7 078 37 351 Med‐10 Egypt 5 160 82 1 11 0 321 394 269 127 6 365 Jordan 35 210 649 0 97 91 5 1 087 Lebanon 99 743 725 508 2 075 Tunisia 59 0 67 6 7 21 161 Turkey 12 39 0 107 141 0 0 40 340 Other. Med‐10 26 0 50 0 123 0 10 0 0 0 482 691 Gulf Saudi Arabia 736 439 80 12 2 993 1 345 493 53 1 250 3 667 11 066 Bahrein 143 592 132 0 229 1 497 0 452 66 3 110 UAE 1 939 2 110 4 795 564 17 848 2 313 1 218 0 1 111 3 852 35 751 Kuwait 2 081 730 296 55 3 009 1 584 1 257 0 1 533 1 148 11 693 Qatar 54 403 223 1 503 762 339 669 230 4 182 Oth. MENA 298 217 0 164 1 69 173 0 396 225 823 2 366 Asia Australia 181 0 7 0 100 0 120 0 408 Ocea‐ China 578 0 52 0 788 76 0 682 49 4 2 229 Nia India 16 81 110 30 1 761 128 264 123 1 661 4 176 Japan 14 92 72 0 246 146 6 21 538 1 134 Malaysia 31 2 194 262 124 36 649 Singapur 145 0 47 2 0 193 Other. Asia 19 96 31 79 643 96 0 0 46 250 1 089 2 349 Autres South Africa 0 2 577 0 2 577 Azerbaïdjan 5 114 5 114 Brasil 1 475 3 23 0 2 23 73 601 Russia 0 102 229 10 0 0 2 076 0 935 3 352 Oth. countries 13 84 0 0 40 0 0 0 194 422 0 753 Total 18 832 18 890 10 169 8 425 52 468 10 227 6 743 575 11 244 28 506 63 938 229 807 The main origin/destination couples (Europe/Maghreb, Europe/Turkey, America/Algeria‐Egypt‐Israel‐Turkey, Gulf/Machrek and Gulf‐Turkey), are highlighted.

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Foreign investments in the Med region in 2008

Annex 5. Methodology

Since January 2003, ANIMA has been inventorying all the direct investments announced by foreign firms in the MEDA countries through the MIPO observatory (Mediterranean Investment Project Observatory). This information is collated from a synopsis of the announcements of investments which have appeared in the press or various publications by the French economic missions, bilateral chambers of commerce, etc.

On the condition that mention is made of the source (ANIMA‐MIPO), the information in the MIPO database may be used directly for scientific or promotional purposes. These data may be consulted on line (in simplified form) at www.anima.coop. Simple polling (selection) is possible.

The amounts, often found in US dollars, were converted for 2008 into euros at the annual average exchange rate of 1 USD = 0.68341€. The following figure shows the exchange rates used for 2008 operations in Med currencies.

Countries Currency (ISO 4217) 2008 rate USA 1 Dollar USD 0.683410 € Algeria 1 Dinar DZD 0.010810 € Egypt 1 Pound EGP 0.126770 € Israel 1 Shekel NIS 0.190720 € Jordan 1 Dinar JOD 0.971730 € Lebanon 1 Pound LBP 0.000460 € Libya 1 Dinar LYD 0.569200 € Morocco 1 Dirham MAD 0.088780 € Syria 1 Pound SYP 0.013960 € Tunisia 1 Dinar TND 0.561290 € Turkey 1 New Lira TRY 0.527820 €

Approach

The means used to detect foreign investment projects in the Med region combine:

. Information directly acquired by the ANIMA team (RSS flows, contacts, reading of newsletters, etc);

. Sophisticated software tools developed by the economic watch team at AFII (Agence Française pour les Investissements Internationaux‐ Invest

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Foreign direct investments in the Med region in 2008

in France Agency) – based on the flow of main international economic and financial news ‐ (Factiva Reuters‐Dow Jones database);

. The data transmitted by the Investment Promotion Agencies (IPA) partners of the ANIMA network.

This work does not purport to be comprehensive, in particular for the small projects, which often slip through the net. Information regarding the detected FDI projects is moreover often incomplete. Only those projects for which a minimal amount of information is available, such as an identified investor, his country of origin, the destination, the nature of the project, are retained and taken into account. In two thirds of the cases, the information collected comprises a quantitative element – either the amount of the investment, or the number of jobs created. Each project is accompanied by a detailed description, which is only partly available to the general public for promotion purposes.

This work cannot purport either to be absolutely faithful to empirical truth, given that MIPO is largely based on secondary sources of economic information, whose reliability is heterogeneous. Now that it has gained some experience, the ANIMA team sharpened up its ability to discriminate between who is trustworthy and who is not.

The MIPO database is regularly updated a posteriori for the previous years, all information received on the investment projects being cumulated in order to keep a historical track by project and company. This explains certain modifications in the figures from one year to the next.

Selection criteria

The projects retained have to correspond to detailed specifications (close the commonly accepted definitions of FDI), which can be communicated to any interested reader. The FDI project has to be announced by a foreign operator as certain, and with a close perspective (start‐up in the next 18 months) in one of the Med countries (Med 10 plus Cyprus, Malta and Libya). Simple supply contracts are therefore rejected (such company is chosen by such government or company to deliver equipment, turnkey facility, etc). Portfolio investment is also excluded. ANIMA‐MIPO considers the mother‐ company as far as nationality is concerned.

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Foreign investments in the Med region in 2008

The mini‐projects (simple opening of a representation bureau, without the creation of a significant subsidiary, franchise, etc.), and the pre‐projects (simple intention to invest, but in the medium term or without a precise location yet) are however been conserved in other bases managed by ANIMA (SMILE, etc.). These confidential bases of prospects are exploited, for commercial ends, by the ANIMA network.

Recent methodological changes

The multiplication of gigantic operations in 2006‐2007, amounting to many billions of dollars sometimes, reasserted the necessity for ANIMA to produce, apart from ‘gross FDI data’ (total budget declared by the investors), an ‘annualised’ FDI data to smooth the forecast amounts. This annualised figure is produced by dividing total budget declared by the investors by the number of years needed to complete the implementation of the operation. ANIMA‐MIPO manages that way to provide a good appreciation of the amounts really injected during the considered year.

This is important given the strong presence in the database of urban, real estate or tourist projects requiring several phases of implementation. In 2006 for instance, the gross declared FDI amounts, all sectors included, amounted to 135 billion euros, while the annualised data was 69 billion euros.

The main disadvantage of this technique lies in the present incapacity of MIPO to take into account over the years n+1, n+2 the corresponding fractions of the total budget forecasts for the FDI projects recorded during the year n. Annualised data can therefore give an inaccurate picture of certain sectoral dynamics. Let us take an example: whereas in 2006, total budget forecasts of tourism projects added up to close to 30 billion euros, only 6.6 billion were taken into account as FDI flow in 2006, while the 23 billion euros corresponding to year 2, 3, 4, etc. of implementation of those great 2006 projects do not appear in the FDI figure for tourism in 2007 (only 1.3 billion euros for tourism announced that year). With the reduction observed in 2007 in the number of tourism projects and the greater modesty of the projects’ budget forecasts, the MIPO data gives the misleading impression that Mediterranean tourism does not attract foreign investors any more, while the great projects announced in 2006 are actually being implemented over 2007‐2008…

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Foreign direct investments in the Med region in 2008

The interest of having those 2 types of FDI data, gross and annualised, lies in the possibility to put forward one or the other of the 2 main indications provided by ANIMA‐MIPO, this advanced indicator of FDI trends: barometer of investment intentions (gross declared amounts of the announced projects), and forecast tool for real FDI flows measured on a given year. As a Med FDI barometer, ANIMA‐MIPO measured as soon as 2006 the inflation of foreign mega‐projects in the tourism business. As a forecast tool, ANIMA‐MIPO has since its inception given by anticipation trends always confirmed par other FDI indicators such as UNCTAD data.

MIPO is therefore a good tool to follow‐up micro‐economic investment projects. The aggregate macro‐economic data are however to be taken with precaution.

Sectoral nomenclature

The general principle presiding over the determination of the sector in which to classify a project is that of the identification of the ‘main activity’ of the investor. If a French insurance company sets up an ‘in‐house’ Moroccan call centre to attend its French customers, the project is classified as ‘banking, insurance & other financial services’. If the creation of a call centre in Morocco is in contrast made by an American provider of contact‐centre based CRM services, then the FRI projects is classified as ‘Services to businesses’.

In 2008 the sectoral nomenclature of ANIMA was slightly modified. The sector ‘Distribution’ includes from now on small boutiques as well as supermarkets. It includes the commercial activity in itself. On the contrary, investments in the walls (construction of shopping centres), when made by real estate promoters with the project of renting the mall to anchor tenants, are classified as ‘Construction’. The same principle applies to tourism projects.

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Achevé d’imprimer en avril 2009 sur les presses du Groupe HORIZON 200, avenue de Coulin 13420 Gémenos‐F

N° d’impression : 0904‐052

Dépôt légal : avril 2009 Imprimé en France

In April 2008, the Med-alliance consortium led by ANIMA and formed by BusinessMed, Eurochambres, ASCAME, UNIDO, GTZ, Euroméditerranée, launched "Invest in Med", an initiative cofinanced up to 75% by the European Commission. The project – implemented over 36 months and which will involve the 27 countries of the EU and 9 Mediterranean countries under the New Neighbourhood Policy (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria and Tunisia) – has the ambition of increasing the volume and the quality of investment flows, of partnerships and Euro-Mediterranean trade flows with a view to contributing to the sustainable economic development of the region.

Foreign direct investment towards Med countries in 2008 : Facing the crisis SURVEY N°3 / March 2009

In 2008, countries from the Southern and Eastern Mediterranean started to be hit by the global financial and economic crisis:

• These 13 Mediterranean countries (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the Palestinian Authority, Syria, Tunisia, plus Turkey, Libya, Malta and Cyprus) received a little less than EUR40 billion in Foreign direct investment (FDI) over 2008 (-35%), versus EUR 61bn in 2007 and EUR 68bn in 2006. Many projects, for instance in the automotive sector, or in real estate (particularly from Gulf countries), are either scaled down or cancelled. In addition, FDI generate too few direct jobs.

• There remain, however, good reasons for hope. The World Bank forecasts growth of 3.9% in 2009 for the countries of the South and East of the Mediterranean. Certain of the more autarkic countries, such as Algeria, are less exposed to the crisis. Cheaper oil and low inflation will benefit other Med countries. Finally, for European industry, the Mediterranean often appears as a solution, a possible recourseinterms of market, costcontrolor partnerships..

Hence the crisis can also hold promises. In Ancient Greek, the word κρίσις, or crisis, means the “time for decision”. For Med countries, the time has come to think about a new attractiveness policy, orientated towards projects that would be both more sustainable and socially useful. This implies an interest in the creation of a well-rooted network of large, medium and small sized enterprises working together at the transnational level. This is the great industrial challenge of the Euro-Mediterranean region, finding an original mode of economic cooperation which will benefit the two shores ofthe Mediterranean over time.