Fdi Effects In Bulgaria, Croatia, Egypt, Morocco
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Transcript of Fdi Effects In Bulgaria, Croatia, Egypt, Morocco
FDI Effects in Bulgaria
5.0%6.6% 6.2% 6.5% 6.4% 6.2%
-5.5%
0.2%
Macroeconomic indicators show consistent growth in the years leading up
to the global financial crisis
2003 2004 2005 2006 2007 2008 2009 2010
Real GDP Growth
6.1%5.0%
7.3%8.4%
12.3%
2.8% 2.4%
5.2%
2004 2005 2006 2007 2008 2009
Inflation
12.2%10.7%
9.1%6.9% 6.3%
9.1% 9.2% 9.8%
Unemployment
2004 2005 2006 2007 2008 2009
2,736 3,152
6,222
9,052
6,728
2,4121,639
FDI Inflow
2004 2005 2006 2007 2008 2009 2010
€ mln.
Source: Bulgarian National Bank
2010
2010
2011
* February 2011
2011
* February 2011
FDI in Bulgaria comes mostly from EU countries and is concentrated in sectors
Source: Bulgarian National Bank
FDI by host country, 1996-2010 (€ mln.)
FDI flows by industry, 1996-2010 (€ mln.)
Telecom 1,955
Energy 2,492
Construction
2,608
Trade 6,425
Manufacturing 6,552
Finance 7,422
Real Estate 8,419
Other 2,376Italy 1,221
Russia
1,229
USA 1,337
Hungary 1,362
Cyprus
2,229
Germany 2,646
UK 2,948
Greece
3,763
Austria
5,183
Netherlands 5,740
Educated and skilled workforce is among the main advantages of
BulgariaAlmost 60,000 students
graduate every year from over 50 universities
Source: National Institute of Statistics, Bulgaria
833
860
12,684Other
19,480Business
8,372Social
sciences
7,178Engineering
3,677Education
3,166Health
1,553LawArchitectur
eAgriculture
Bulgaria has one of the highest proportions of students abroad
from all European countries
8.3%
5.8%
4.7%
3.1%
2.8%
2.2%
2.1%
17.8%Iceland
14.2%Ireland
10.2%Slovakia
Bulgaria
Greece
AustriaGerman
yEU-27 average
Czech RepublicStudents in another EU / EEA country, % of all
Why invest in Bulgaria?
Political and business
stability
EU and NATO member
Currency board
Low budget deficit and
government debt Low cost of doing business
10% corporate tax rate
Lowest cost of labor within
EU Access to markets
European Union / EFTA
Russia
Turkey / Middle East Educated and skilled
workforce Government incentives
Nestle Hewlett-Packard Diversification of
the sweets market Over 1000 jobs
within the factory Loyal brand No threat of
competing with the local market
• 1000 existing jobs, adding at least 1000 more •Bulgaria wins over
30 countries •Higher standard of
living, greater skills, education put to use
FDI Effects in Croatia
Macroeconomic Indicators
Who is investing in Croatia?FDI Stock by country through 2005
Equity inflows and earnings reinvested into newly established FIEs
1993-2005
Croatians are highly educated!
Accession to the EU
Applied for membership in 2003Completed 29 out of 33 “chapters”
Public support is low due to EU financial situation and harsh sentencing of Croat generals in the Hague
Possible accession by 2013
Bulgaria/Croatia Comparison
•Former Soviet history •Delay in Reforms •Expansion of the service sector •Should expand manufacturing •Greenfield investments predominant •Does the service sector lead to economic growth? •Trading between the EU member states •Economic recession in 2008
Global Competitiveness Index - Ranking SEE and CEE countries according to performance in education and
innovation
Country Overall ranking Higher education and training ranking
Innovation ranking
2007-08 2009-10 2007-08 2009-10 2007-08 2009-10
Albania 109 96 103 90 131 126
Bosnia and Herzegovina 106 109 98 86 121 131
Croatia 57 72 46 56 50 61
Macedonia, FYR 94 84 75 70 92 92
Montenegro 82 62 79 57 104 56
Serbia 91 93 82 76 78 80
Bulgaria 79 76 66 60 88 91
Romania 74 64 54 52 76 70
Slovenia 39 37 24 19 30 29
Source: The Global Competitiveness Report 2009-2010, and 2007-2008, World Economic ForumNote: Global Competitiveness Report 2007-2008 is based on survey and data of 131countries, while for 2009-2010, N=133.
FDI Inflow in $
1995
1997
1999
2001
2003
2005
2007
0100020003000400050006000700080009000
10000
Bulgaria Croatia
Bulgaria Croatia
How FDI Impacts Development in Egypt
Education
Currently combating low levels of education and illiteracy.
Business firms are required to combat illiteracy among their employees.
As of 1999, public expenditure on education was estimated at 4.7% of GDP.
Education and Coca-Cola
Has been investing in the region for 50 years.
Partnered with UNICEF to help get rid of terminal diseases such as Polio, HIV, and Hepatitis C.
The goal of this partnership was to shed light on the issue of AIDS by providing adequate education and prevention.
Coke is promoting education, the development of information, and communication materials all in an effort to help promote AIDS awareness.
Technology
Egypt mostly specializes in information technology, tourism and travel, consumer goods and Telecom companies.
Bringing development through the Information Technology Industry Development Agency (ITIDA).
Develops infrastructure and helps existing companies.
Creation of more jobs and encourages international business.
Up to 50,000 new job opportunities.
Technology and IBM
IBM developed The Service Delivery Center, which promised it would employ up to 100 people in the beginning and then increase up to 1,000 being employed within the company.
Assumed to bring about more growth in Egypt as well as develop technology, education, and industry.
IBM is just one of many companies that has invested in Egypt. Other examples would be: Intel, Coca-Cola, and Microsoft.
Egypt’s Future
Because of the demonstrations that took place earlier this year, Egypt’s GDP is estimated to take a 2 to 3 percent nosedive.
The reasoning behind this assumption is due to the fact that tourism drastically came to a stand still and many businesses closed down.
This could cause potentially significant damage to Egypt’s future development in many sectors.
Currently the government to already devising strategies for Egypt to withstand the latest economic blow.
Impact on FDI
Egypt went from a closed market economy to more liberalized and open.
Technology has further helped develop initiative in Egypt by creating education opportunities.
How FDI Helps
Develop Morocco
Impact of Education on FDI
Chemonics educated the ministry of tourism and development and they were better able to tap into the rural tourism market and bring in more inflow of FDI from a more diversified international clientele.
The Moroccan government has also funded training for the staff that would be needed for the Plan Azur, which has enhanced human capital.
Impact of Capital on FDI
Capital has had a positive impact on the attraction of FDI, especially when it came to building infrastructure in Morocco.
Ex. Plan Azur
Plan Azur-Impact on Morocco’s FDI
Impact of Technology on FDIAll sectors in the economy are turning
to the new technologies which will lead to increased potential for development in the telecom sector, of which Morocco is a regional leader.
This technology has allowed the largest Multinational Telecommunication operator, Maroc Telecom to operated in various other North West African countries.
Maroc Telecom and Vivendi Agreement -- Impact on FDI
Table 4.3: Africa’s share of FDI inflows (millions of US dollars)
Year Africa World Percentage 91–96 4,606 254,326 1.8 1997 10,667 481,911 2.2 1998 8,928 686,028 1.3 1999 12,231 1,079,083 1.1 2000 8,489 1,392,957 0.6 2001 18,769 823,825 2.2 2002 10,998 651,188 1.6 Source: United Nations, World Investment
Report 2003.
Africa’s share of FDI inflows (millions of US dollars)
Source: United Nations, World Investment Report 2003.
1991-1996
1998
2000
2002
PercentageAfrica
Maroc Telecom and Vivendi Agreement -- Impact on FDI
The similarities found between Morocco and Egypt is the countries’ openness to MNC investments because the policymakers see a direct correlation between the increase in skilled human capital and the creation of jobs that leads to an amplification of FDI amounts and more pervasive country developments. Egypt and Morocco are the most integral North African countries because of their prime geographical location, openness to FDI and trade relations with the United States and other advanced economies such as France from the EU.