Investment Policies in the Arab Countries

Edited by

Said El-Naggar

Papers presented at a Seminar held in Kuwait, December 11–13, 1989

International Monetary Fund

♦ 1990

© 1990 International Monetary Fund

Cover design by IMF Graphics Section

Library of Congress Cataloging-in-Publication Data

Investment policies in the Arab countries / edited by Said El-Naggar.

• p. cm.

“Papers presented at a seminar held in Kuwait, December 11–13, 1989.”

“Sponsored by … the Arab Monetary Fund … [et al.]”—P.

ISBN 1-55775-140-4

1. Investments—Government policy—Arab countries—Congresses. 2. Investments, Foreign—Government policy—Arab countries—Congresses.

I. El-Naggar, Sa’ id, 1920- II. International Monetary Fund. III. Arab Monetary Fund.

HG5816.A3I58 1990

332.6′732′09174927—dc20

90-34408

CIP

Price: US$18.50

Address orders to:

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700 19^th Street, N.W., Washington, D.C. 20431, U.S.A.

Telephone: (202) 623-7430

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Cable: Interfund

Sponsoring Organizations

• The Arab Monetary Fund

• The Arab Fund for Economic and Social Development

• The International Monetary Fund

• The World Bank

Foreword

This is the third seminar volume to be published jointly by the IMF and the Arab Monetary Fund. As before, it focuses on an issue of particular significance to the Arab countries, namely, their investment policies. The increased level of institutional interest engendered by the debates on issues concerning the Arab world demonstrates the relevance and usefulness of the series.

The quality of expert participation speaks to the importance of the themes that have been selected for discussion in these seminars. We at the Fund are pleased to have helped launch the series and to have been again associated with the Arab Monetary Fund, and for the first time on this occasion, with the Arab Fund for Economic and Social Development, as well as the World Bank. The involvement of Professor Said El-Naggar as the moderator of this as well as the previous seminars has provided not only a useful continuity to the management of the discussions and their editing, but his own contributions have been of great value, given the clarity of his thinking and the lucidity of his expression in Arabic and in English.

The impact of macroeconomic and microeconomic policies on the investment climate in the Arab countries, the efficiency of public investment, and the role of foreign direct investment—the recurring themes of the seminar—are issues that are topical for all developing countries. I hope that the publication of this volume, like its predecessors in the series, will contribute to a broader understanding of these important economic issues, and not only in the Arab world.

Michel Camdessus

Managing Director

International Monetary Fund

Acknowledgment

This is the third in a series of seminars dealing with economic issues of particular importance to the Arab countries. The preceding seminars dealt with adjustment policies and privatization. The topic this time has acquired special significance because of the efforts of the governments concerned to promote private domestic and foreign investment and to raise the efficiency of public investment. The papers presented to the seminar cover a broad area ranging from investment guarantees to macroeconomic policies that have a bearing on the investment climate in the Arab countries.

The seminar was sponsored by four organizations: The Arab Monetary Fund, the Arab Fund for Economic and Social Development, the International Monetary Fund, and the World Bank. The interest and support shown by these organizations bear witness to the importance of the issues covered by this seminar.

On behalf of the participants, I would like to express my thanks to all those whose active support made this event possible, in particular, Messrs. Osama Faquih, Director General and Chairman of the Board, and Rasheed Khalid of the Arab Monetary Fund, and Azizali Mohammmed and Ahmed Abushadi of the International Monetary Fund.

A special word of thanks is due to Mr. Abdlatif Y. Al-Hamad, Director General and Chairman of the Board, Arab Fund for Economic and Social Development, and his collaborators, Ismail El-Zabri and Mirvet Badawi, for the excellent organization of the seminar and for their hospitality during our stay in Kuwait. I would like also to thank Elin Knotter of the International Monetary Fund for editing this volume for publication.

Said El-Naggar

Moderator

Contents

• Foreword

• Acknowledgment

  • 1 Investment Policies in the Arab Countries: The Basic Issues

    • Said El-Naggar

  • 2 The Impact of Macroeconomic Policies on Investment

    • A. Shakour Shaalan

  • Comment: Mohamed El-Diri

    • Fareed Atabani

• 3 Efficiency of Public Investment: Lessons from World Bank Experience

  • John W. Wall

  • Comment: Mohamed A. Diab

• 4 Foreign Direct Investment: The Role of Joint Ventures and Investment Authorities

  • Dale Weigel

  • Comment: Abdulaziz M. Al-Dukheil

    • Ezzedin M. Shamsedin

• 5 Investment Guarantees: The Role of the Inter-Arab Investment Guarantee Corporation

  • Abdel Rahman Taha

  • Comment: Nour El-Din Farrag

• 6 Promotion of Arab and Foreign Investment—General Remarks

  • Ibrahim F.I. Shihata

• 7 Egypt's Investment Strategy, Policies, and Performance Since the Infitah

  • Heba Handoussa

  • Comment: Ahmed El-Ghandour

• 8 Investment Process in the Gulf Cooperation Council States

  • Abdullah Al-Kuwaiz

  • Comment: Mahsoun Galal

• 9 Investment Policies in Iraq, 1950–87

  • Abdel-Monem Seyed Ali

  • Comment: Abdel Wahed Al-Makhzoumi

• 10 Investment Policies in Morocco

  • Bachir Hamdouch

  • Comment: Abdelrazaq El Mossadeq

• List of Participants