4th Issue

Key Investment opportunities not to be missed

2
Doing Business in the Middle East

Key Investment opportunities not to be missed – Part 1

The Middle and North Africa and Levant (NAL) region – Algeria, Egypt, Jordan, Lebanon, Libya, Morocco, and Tunisia – has a population of 183 million and GDP of $763 billion. Having such potential wealth on the economic map, both in resources and human capital, investors may ask what business opportunities should investors look for? What are the best business prospects in the Middle East and Arab countries? Is it still “investable” despite there being such regional political instability and the subsequent fallout from the Arab spring?

According to Hawley, “profit is the price paid by society for assuming business risk. A businessman or a businesswoman would not take a risk without expecting compensation in excess of actuarial value. Therefore, assuming risk gives the entrepreneur a claim to a reward in excess of the actuarial value of the risk”.

So does that mean more risk, more profit? Investing in the Middle East can be risky but it can also be extremely profitable, as this part of the world is a bright spot for economic growth according to “Money Morning report”.

Contrary to the perception of many internationals, any growth projection might not be based primarily on the wealth of oil or gas reserves in the region. As we will show in this article there are many sectors ripe for investment. These vary from construction, energy to banking, tourism and IT etc. It is worth keeping in mind that this region, as with many other parts of the world, is a price-sensitive market where quality is important.

Many governments in the region plan to spend billions on electricity and gas projects in the next 15 years, providing opportunities for investors in power plant design as well as for the provision of equipment and related services.

The infrastructure sector grows at 5- 7% percent annually.

The needs range from roadways to rail systems, airports to ports, and residential to industrial buildings. North Africa and Levant governments have allocated in the region of $81 billion for infrastructure projects in 2013.

Due to the political instability, an increasing demand for safety and security and their services and equipment are noticed in many places such as hotels, banks, large corporations and in oil fields. For example, $30 bn was invested in the security sector during 2012.

Some general prospects include:

oil and gas, renewable energy, safety and security, environmental technology, infrastructure, healthcare, medical equipment, and hospital construction.

Read part 2: http://middleeast-business.com/key-investment-opportunities-not-to-be-missed-2/

Sources:

Office National de l’Algerie
National Agency for Investment
American Chamber of Commerce
Portland Trust – Beyond Aid Study – Palestine
www.portlandtrust.org
Quartet Office – East Jerusalem: Economic Initiative in Palestine
Ministry of Economy and Trade – Lebanon
World Bank – Libya overview
African Development Bank Group
Palestine Central Bureau of Statistics
Moroccan Investment Development Agency
Moroccan High Commission for Planning
European Commission website
http://www.invest.gov.ma/?lang=en&Id=3
http://www.hcp.ma/
http://www.afdb.org/en/countries/north-africa/morocco/morocco-economic-outlook/

 

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