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By FRANK KANE
THE DEAD SEA, Jordan: The private sector must help the Middle East and North African countries meet a $100 billion infrastructure investment bill in the coming years, a special session heard at the World Economic Forum’s (WEF) regional meeting in Jordan.
Kito de Boer, the outgoing head of mission for the Office of the Quartet mediating in the Israel-Palestine conflict, said that the region lacked a development bank such as those that operate in other parts of the world to channel investment funds into infrastructure projects.
“Everybody else is doing it, the Chinese, the Russians, the Turks, Africans and Europeans, but lots of Western banks have pulled out of the Middle East. The challenge is how to keep investment in the region and to collect capital in the most cost-effective way,” he said.
He added that even the Americans were now seeking to attract foreign capital, in the light of the plans being discussed in Riyadh between President Donald Trump and Saudi Arabia’s policymakers to make big investments in the US infrastructure.
To meet growth targets, the region needs to double its infrastructure investment to 10 percent of gross domestic product (GDP) per year. But the low oil price and resulting pressure on government budgets mean that the public sector is struggling to meet that target.
Imad Fakhoury, Jordanian minister of planning and international cooperation, said that private infrastructure investment was critical for the country as a non-oil producer and that it had attracted $10 billion in the past 10 years, one of the highest proportional amounts in the world.
He pointed to the Queen Alia International Airport in Amman as a good example of how public-private partnership (PPP) could work effectively. He contrasted it with the airport in Cairo, which was built by public funds.
The panel heard from Violeta Bulc, the European commissioner for transport, which is seeking to help implement the “Juncker Plan” named after the European Commission President Jean-Claude Juncker. This is seeking $300 billion of funding for infrastructure investment and is actively trying to attract private funding into it.
“We need $100 billion of investment each year for the next three years. There is no way the EU members can do that, so we have put in place a special plan for private participation,” Bulc said.
Hassan Al-Thawadi, secretary-general of Qatar’s supreme committee for the 2022 FIFA World Cup, said that a new PPP law was being drawn up in the country to attract private involvement in the big plans for football stadia and transport systems. “Everything is being done to ensure that the facilities will have a use after the World Cup,” he said.
Al-Thawadi said that one of the stadia would be offered to private developers with the option to create residential, leisure and retail facilities after the event.
Dimitris Tsitsiragos, vice president of the International Finance Corporation, conceded there were obstacles to attracting private investment into the Middle East. “The challenge of institutional investment is to put together bankable projects. Most banks now are out of international projects.”
© Arab News 2017
