 Good afternoon. Welcome all to this session on new models of investment for countries and transitions. I just said to my fellow panelists that this could be the title of a serious econometric study in an academic journal, but looking at the faces around here I understand that you are not coming to hear about that. We have a very distinguished and experienced panel going from clockwise. Minister Odoho is the Minister of Economic Development in Palestinian Authority. David Walker, who is a long time banker, also city banker, and very experienced in the areas which we are discussing this afternoon. Kai Kohanda, who is with Mika, who is actually one of the most important FDI institutions which we have internationally. I would like to call yourself an entrepreneur, CEO or investor, but I call you a practitioner. You can call me what you like. So the topic which we are discussing in the next 60 minutes live streamed. I'm saying that for all the participants in this room that you are aware is really about the future of economic growth in transition countries. And transition countries can be defined in various ways. We will not try to define them, but it's obviously that many emerging markets are transition countries, but as I've joked just before we were entering the room, of course some of the industrialized countries are also going through major transitions. So basically the question on the table for everyone is what do we know about higher risk perception about political risk analysis about uncertain long term prospects and what does all of that mean for foreign direct investments in these countries which is the largest part of the world of course. We will start off with Kai Kohanda, who will tell us about lessons learned in these transition countries and if you have any flavor to add on the region Kai Koh, please do so. Professor Halverstadt, thank you very much for having me in this panel discussions with very exciting agenda. Many countries in transitions face tremendous uncertainty, although uncertainty is not necessarily same as the risk. Private investors often see this uncertainty as a primary source of risk. What we have learned at MIGA is private investor feel concern but cannot articulate that concern. So I recommend to slice their concern into several different categories. There are six real risks in my perspective. First one is private investors cannot convert their repayment or dividend into hard currency and transfer out to their home country. Second risk is the potential damage from the wrong civil disturbance. Third risk is the expropriation risk where government taking over your project. And then a fourth risk is the potential breach of the contract by the government. And a fifth risk is the commercial risk. But this commercial risk does exist in any countries, even in if I bowler Professor Halverstadt's word, it's industrialized country, including the United States. And a sixth risk is the foreign exchange fracturation. This also does exist in any part of the world. US dollar does fluctuate against the euro and as well as the Japanese yen. Well, then I think, you know, a lot of that kind of showing the concern, making a concern, we really have to kind of slice their concern. So therefore we can really reach up to the real risk. There are actually many multinational development bank does exist. But MIGA, as Professor Halverstadt mentioned, is one of the few specialized in de-risking. We provide political risk insurance covering those first four risks that I just want to mention in many parts of the world. Given our timing, I'm not going to go through the all example that we actually covering, but let me give you one example. This is the Jordanian entrepreneur who invested in Iraq, the transportation sector. MIGA has been supporting NAFIS logistics since 2014, building and managing system to regulate track passing through the three ports in the Basla region and Akhlos Kwaiti border. With MIGA support, NAFIS logistics is bringing job to Iraq, modernizing the logistics network and using data driven system to enhance efficiency, strengthening the security of the transport and facility to trade. Although these contribute toward increasing the economy activity, which ultimately improving the security of the region. I just like to say so the key what we actually based on our learning working in a multiple different countries in a transition is slice the risk and then de-risk. There are a lot of de-risking instruments available through multiple DFIs. So that's our lessons learned right there. Thank you, Craig. That made a very series of remarks which of course will lead to possible reaction from other panelists or for the room and we'll get back to that in a moment. Now, David, what have you learned? What do you, what is your own institution and what do you tell your advisors, as advisors, what do you tell your clients about these countries in transition? Do you deal with them differently? Thank you, Victor. First of all, a big thank you to the Kingdom of Jordan, really for hosting us and the World Economic Forum for convening this. This is a terrifically important topic worth saying that to a turn's rotary point we've been physically present here for many decades in Jordan and across the MENA region. So we've had some experience of bringing the world to MENA and bringing MENA out to the world. Let me just offer a few, I guess, private sector banker perspectives. The key bullets are one, we're having this conversation because there is opportunity, but advocacy around that opportunity is needed. The level of understanding of the region of the opportunity is extremely variable depending on where you go outside of the region. But the demand side is clear and what we're talking about is helping develop the supply side and getting the investment in. So what are the challenges that are faced by international investors? Let's spend a minute on that in a second. Kiko has just explained this issue of unpacking the risks. I think there is a thread running through this of some old fashioned views of risk and some now emerging more sophisticated views of risk. In unpacking the risks, who are the right holders? Who are the right people to take those risks going forward? I will also mention the importance of local markets. You many think of the big international organizations, whether it's Amiga, City or others, as essentially large international hard currency denominated institutions. But actually the ability to operate in local currency and to develop local capital markets is going to be key. That develops resilience and those are engines of growth. And then in all of this, and particularly with the theme of the forum, we can't forget about the investing in youth angle. I think the skills and training and investment in the youth, which is going to be the capacity building for these markets, is going to be key. And then lastly, I'll think a little bit through the course of this dialogue on some misalignments because one of the big issues that transition economies are facing is the withdrawal of certain players and of large scale financial services involvement. The advantage to all of us, of course, on transition economies is we have a chance to go where others are not going at the moment. So there's not only all the social and political benefits, there's enormous economic benefit available to us and to our clients. Quickly, just expanding on one or two of those, in terms of the key challenges and the constraints, I think Kiko has laid those out very clearly and I won't repeat them, but the political risks are the starting point for most of our international investors. The commercial risks are manifold and manifest, but there's the political risks that need definition and need support. It's also worth saying the role of government in all of this is key. Government is dominant in these economies. Government has advocacy and enabling power, but also needs to know when to get out of the way. In transition economies, there's a little bit less institutional strength and depth and that's where big international official organizations such as the World Bank and MIGA have a great role to play. In the unpacking of those risks that we talked about and the allocation efficiently of those risks to the right holders, I think our conversation would range around some of the solutions, but what in this we mustn't forget to talk about is non-standard forms of finance. I'm speaking from the perspective of a large dollar-centric international bank and we've got private equity at the table, but social bonds, ODA forms of finance, blended finance, and let's not forget some of the new tools throughout this such as supply chain finance, which are very, very locally powerful. The development of the domestic pools of capital, that is key to resilience. There's obviously no question, we've seen tremendous strides in some of the markets in the MENA region as we have seen in say the Central and Eastern European regions. That capital market, that debt and equity capital market becomes the engine room for growth and it also prices the risk and the availability properly. In the investing in people, I'll simply say that I think all of us have both an economic as well as a more philanthropic interest in getting this right and we've talked about the youth and the levels of unemployment amongst that youth in this region and yet they're bursting with ideas as we've seen on other panels here. Worth saying that through our own lens, the city through its foundation, the pathways to progress, we've got a hundred million dollars that we're deploying into youth empowerment and education between now and 2020, much of it in the MENA region and we've got terrific partners here like Fadi Ghandour, the inspirational leader of the Rwad organization and others that we're working with on that. But let me end by saying let's not also lose sight in all this sort of moving forward of the things that are moving back and I'm going to pick out correspondent banking, I'm going to pick out trade finance and the very cautious stance that a number of international players are taking on some transition economies principally as a result of post-911, your fat F driven, your behaviors. So there's a little bit of an edge that we need to keep an eye on. Thank you David. So the lessons learned living in the region and practicing largely in the region must be sizable. There is of course enormous disruption in the region. What can you tell us that we should be aware of as the essentials here? So it's always very easy to get disillusioned and disheartened and to start thinking of risk as an all-encompassing phenomenon and what I'd like to start by saying is that you know globally we are not being very innovative when we look at risk. The perception of risk in today's world is extremely skewered and what I mean by that is that you know somebody somewhere won a Nobel Prize many decades ago by devising risk models around the developed world, the industrialized world, the so-called third world at the time which we now mistakenly refer to as emerging markets. I say mistakenly because you know I call them global growth markets because whether we like it or not two-thirds of global growth is going to come from these markets in the next few decades. So let's just get that bit right and then tackle the issue of what risk actually looks like and what risk means because if you look at the last decade or so where did risk actually come from in the global financial landscape? Risk came from the heart of Wall Street, risk came from Lehman Brothers okay and you talked earlier about political risk as being an important element of our thinking when we're looking at project finance well you know what in today's world the biggest political risk came from Brexit, the next political risk came from the election in the United States and look at all of our fears around France. So there is a little bit of a misperception that is going on and I'd like to use as a data point a very interesting study that was done recently around 5000 infrastructure projects around the world and the eventual conclusion of success around those 5000 projects and the failure rate in Africa was 1% the failure rate in North America was 9% okay so let's just for a second take a step back and say that maybe it is time to relook at risk maybe it is time to relook at the way in which we measure risk so that's my first point my second point is that we've been here before okay and we've had countries in transition look at the end of the second world war there was a creation of something called the Marshall plan okay which resulted in taking countries in transition and countries that were at that point essentially failed nation states and redefining how to rebuild their economies and at that point I don't think anyone was adding on risk premium for helping rebuild infrastructure in those economies so we learned the lessons then we quickly forgot them and now we're beginning to relearn them again and and I feel that we have in today's world a very interesting development that is happening it's called one belt one road which the Chinese government is unveiling at speed now and that is a very interesting thing which is you know they took their infrastructure led investment led growth which took 800 million people out of poverty in the last two decades and they're now applying that to countries around them and they're spending the equivalent of 15 Marshall plans in the course of the next decade in economies around them that are important to China and this includes Vietnam and it includes Kenya okay so it's across the board and that money is being spent without that traditional perception of what risk means so my view around this thinking is we've all got to take a step back we've got to take a long deep thought process which needs to have a lot of consensus around it and we need to start thinking long term we need to start thinking about where the pools of capital are coming from and I have to say one of the leaders globally in this thinking is Jim Kim at the World Bank who is actually as we speak redefining how to bring private capital and it's interesting that it's coming from the president of the World Bank how to bring private capital at work in infrastructure projects and long-term investment thinking and I'll just conclude this little introduction with a discussion around the Sustainable Development Goals because you know again we've sat down and written up the Sustainable Development Goals it wasn't one man's idea 10 people's idea it was a consensus decision taken by a stakeholder approach by 200 countries around the world by the smartest people in multilateral and organizations NGOs civil society and business these Sustainable Development Goals exist but the problem is that if we start thinking about the implementation of those as the ambit of NGOs or multilaterals were instantly wrong what we should be doing at that point is taking business and seeing the profitability inherent in investing in those spaces because what are those spaces those spaces are healthcare education low-income housing and I can keep going down that list of food security and so on and if we start applying private sector principles we will do very well so risk in in summary is a slightly is a concept in need of innovation as everything else in the world is getting innovated we need to innovate our thinking around that and most importantly we need to start thinking that whatever we do in this space when we start thinking about how to deploy capital are we investing with impact or are we investing for impact because neither of those need to forgo the profit imperative thank you very it's a really intriguing question whether we should re rethink the concept of risk and and I'll invite Kiko and and David later to react and minister you may already may want to react because I know you're very aware of this question first thank you very much for giving me this opportunity it's a great opportunity of course you know I'd like to thank with and as well you know talking about this very interesting subject you know when talking about like you know investment in countries with the in transition actually I don't know transition means that you start you know this year and you'll end after five or six years or probably if it takes longer it takes like you know ten years but in Palestine is different you know it's like you know I can't I can't you know see that we are a country of in transition because we don't know when the occupation will end but anyway we cannot you know either the countries in transition or country like Palestine cannot left behind so we have to attract investors investment is very important for any country that is in transition or under under occupation it's a key for economic growth but the government do have a huge role to mitigate the risk the political risk which is assist by any investor you know always investor assist risk before investing in any country and countries under uncertainty countries under occupation the political risk is very high so how to mitigate from government point of view to focus on the infrastructure to have industrial zones as an example provide incentives and as well to work on the legal framework of the country and to work on the related laws and regulations that can help the investors you know to come to invest in these countries and of course having like you know related the laws and regulation as the case in Palestine recently we passed the leasing law which is very important for the SMEs since we have more than 90% of our businesses SMEs the secure transaction and recently the companies law this would help the SMEs to grow and help the investors to jointly work with the SMEs and to work on developing these companies and help them to access finance as well there is other role for the government to focus on education and awareness education is important we need to focus on vocational vocational training and as well try to bring investors with new ideas and know how in order to have a competitive products competitive ideas and to reach the foreign and to cover the local market as well and we have to work on the media because many countries with uncertainties you know probably do have a very high potential but people you know just hear the news and you know it's uncertainty lots of difficulties but sorry but in fact there is a high potential there are success stories that need to be presented to the whole world that okay even with the difficulties that we are facing with the occupation but still we have untapped potential that we should focus on and should attract the investors in our case diaspora Palestinians diaspora are very important for us because when they think of investing in Palestine they first they don't think of profit or making profit it's like you know a cultural diplomacy you know they can invest in Palestine bring other investors with them and of course strengthen the Palestinian economy and this is in fact one of the things that we are focusing recently on it thank you thank you minister ah we will in the second round speak in some more detail about some of this but let me first go back to the question I quickly raised after Arif had spoken this concept of risk David in your experience is Arif correct in thinking that we may need to do some innovation here and that risk may be a different concept than we have so far understood or and actually talked to other people David so in short yes Arif is spot on and as everybody got it wrong and now we need to do it differently no I think it's a continuum and the world has changed you and with innovation in technology and industry and in government and in public service it has to be matched by innovation in our understanding and analysis and provision for risk because we've we've taken some very blunt risk assessments you know in in the past and this this is where it comes back to this the sort of theory of sort of unpacking all the risks and then trying to understand you know if a chain an economic chain is presented to us each of those links has a different type of and size of risk associated with it you know from from equity risks and commercial risks all the way through to to political convertibility and other risks and there will be some very idiosyncratic risks associated with some of the markets that there are clients choose to operate in um Arif also mentioned the the very key um so one belt one road strategy you know for the Chinese and I think what I would say there is that is in many ways the it's such an accelerated such an ambitious program but what we have the kind of the almost the sort of the wonderful opportunity of observing is this sort of great ambition and therefore there is the sort of this move to the unpacking and then the management to these risks in a hurry which is going to help us all move you know to to the next phase um what is also changing at this moment in time is the is the multilateral and the development organizations and and the candidly kind of the whole arena the amigas to be commended um on the I mean for an organization that's only been around for 30 years you know they're right now going through yet another revolutionary redesign of the products you know the political risk and the credit enhancement products that are going to be made available to to the marketplace um that means that to the point earlier on about crowding in those who look at this chain and say actually I love this project I love this country I love this opportunity but there are two links in this chain that frankly for bureaucratic historical rule-based reasons I'm just never going to get there if we can understand that and we have the tools to take those out and transpose those to the right holders the appropriate holders paid you know a rate that they want to be paid for that we're going to see a whole lot more getting done just like one belt one road um and um and we should see this evolution towards you know greater understanding we should like to come in on this because yes you know you are involved in this concept of measuring risk and so absolutely but first of all before touching upon the risk definition I have to 100 percent agree with about private sector can be a primary party to stimulate economic activity which is the primary step in transition that's I 100 percent agree with you I assume others also agreeing based on that when it comes to the risk I am not the scholar so therefore I'm not the specialist of defining or redefining risk but the one thing I can really tell you is sobering risk used to be associated with the project risk which is moving as a matter of fact I just like to give a one practical example that we worked on to derank the sobering risk with the project risk EBR the European bank of European Bank of Reconstruction and Development and a mega jointly worked in Turkey this is Hilske a PPP project equity investor is Meridium they decided to issue a project fund we worked with the rating agency Moody's the project bond got too much above the sobering rating of Turkey so unfortunately Turkey got downgraded recently but this project bond still investment grade that kind of derinking sobering risk and a project risk is happening I'm sure you'd like to react to that yeah look I thank you for agreeing to start with but the you know I'll give you a live example okay three and a half years ago four years three years ago we invested in a dairy producing business in Turkey called your son and at the time exactly at that time President Erdogan was going through enormous street protests in Taksim Square the country was going through a currency stress Turkish pricing around its risk was going through the roof and we invested in there at the same time banks were very very anxious very nervous as to what I was doing and what we were doing as a firm and and really put us through the the grind there okay and I responded to them actually on CNN because I was interviewed that day by on this topic and I responded look Turks are going to drink milk irrespective of who governs them okay and the reality is you've got to have a local understanding of where opportunity and risk lies there's an old mathematical adage which I'm sure you're familiar with which is the flap of a butterfly's wings in Brazil can cause a tornado in Texas right in today's globalized world that's never been more true okay so people worry about emerging market currencies as being a source of disruption well the reality is it's not that they're weak it's that the US dollar is strong okay and so if you flip the equation around on its head you can actually solve a lot of issues by applying practical sensible outcomes and you know between lender and borrower come out with a more fundamental understanding of where opportunity is and where the real risk lies as well thank you now let's first look to the audience and see who would like to raise either a question or have a comment gentlemen row two over there and then I'll get to you I was curious about that rating that in Turkey that was two notches above the sovereign risk was was that for that instrument or an equity in foreign currency or foreign local currency David I think it's question for you I'm not sure would you like me to answer this is the hard currency based transaction that's gentleman over here you're getting a microphone just hey it's a question for Miss Honda so we as a group we are in the region for last 40 years investing in building infrastructure and the two key challenges we see is capacity in tenor there is an issue about risk and while one belt one road is one solution but China's debt is twice as GDP and if you contrast that with the GCC it's a different world there's a far greater capacity to do more things within the mean our GCC in North Africa took completely different markets in terms of risk so my question to you is you see me go you see I kick here in the region but you neither see the capacity nor see the tenor to sustain long-term infrastructure projects it's not so much of capital but really an equivalent of omega for the region do you see such a need from what you do and that's a that's a very good question I think liquidity it does exist in this region so therefore liquidity is not necessarily the everything other people are kind of looking for good agreement among the government what the tariff is what the role of equity investors if if it's PPP's case what kind of expertise that a day can bring to then what's therefore leftover risk that are lenders can assume this is actually probably exactly the point David mentions in his first intervention how much risk each of them take at the same time what kind of expertise each of them bring to and it can build the consensus project going people often use the word bankable I don't like that so much it's not only the bank what is kind of acceptable good agreeable condition of government equity investors and lenders including the expertise for you you know contributor I think that's that's if that is your question yes yes David I just add something to that because I think the the question is an excellent question and we can answer it sort of more metaphorically by saying actually the answer usually to these questions is is yes because the more partners that we bring to this topic to this table the better you know mega is a tremendously sophisticated global leader you know in in political risk management but we need governments we need academia we need we need private sector private equity and we need the banking industry I also agree and we have to get away from the the b word the bankable projects it's the i word is it investable because you know the old style thinking that area frankly what it refers to is here's a project bank please give me the money is it this is not the chain that we're talking about where every link is a different type of risk so you know the crowding in of more participants you know government is a role to play advocacy from from from the from the academic sector frankly the trillions that are available in the private sector markets this is the key so what we need to see is you know in this this forum is a terrific a terrific convening power here because you know everybody in this room has a role to play in this and then more we all advocate the more people become closer to the subject you know and then say it from the minister's point of view you know the Palestinian authorities probably well understood right here and probably almost completely misunderstood everywhere else so you know the greater the advocacy the greater the number of participants the more we're going to find you know that blend you know in the world economic forum of course in the OECD you know famously put the blended finance tag together you know to to explain precisely this and we need to we need to we need to chase that that's a very clear answer uh David but that raises a question what are the practical obstacles then that you which need to be removed say take this region not only Palestine but take this region what are the practical obstacles which need to be removed for it to be more attractive to use that term let me let me maybe start by saying um and I think um Keiko and the minister both both referred to in their comments um stability and practicality of some of the underlying law you know there there is one thing that lies completely outside of the the competency of the financial sector but of course you know we can we can advocate and we can ask for various things you know Araf as an investor is going to want to know that you know there is a dispute resolution mechanism um he's also going to want to know that you know that there is there is a means by which you know the earnings associated with it with a project you can be you're converted into the currency that he needs for his next transaction and and remit it out um it is really the harmonization of a lot of that but from an intermediaries point of view our job also is to on the other side on the investor side is to understand what type of risks our investor base want um again there's some very conventional thinking that's still going on in the financial markets you know is somebody an equity investor is somebody a debt investor is somebody prepared to do loan investing you know there are many many graduations in between and there's all sorts of contingent risks that people are very keen to be paid for whether they're in the official sector or in the in the private sector thank you are you from this so i i i just want to endorse what david was saying because i think what you've what you've hit upon is actually something that not too many people talk about but you know should be amplified and and screamed out which is is a project investable as opposed to bankable and and when you think about it in that context and you immediately bring in the needs of all sorts of stakeholders and if you do that then by definition you rethink the capital structure and so you asked about innovation and new products well if you can rethink the capital structure you can certainly rethink many elements of that capital structure as well and where first loss guarantees sit where you know mega products sit where you can actually use insurance companies which actually need to have triple a wrappers in order to consider investing into long-term project finance you can bring in a layer below of risk capital that does not necessarily or traditionally invest in this space and all of a sudden you've got a whole slew of new products and and the last point that i'd like to add in in this sort of space is that the more innovation that comes into project finance the greater the capacity of all of us to deal with our problems because when you talk about nations in transition we are not talking about them setting up the next french fries plant okay or the next bottled water business we're talking about hospitals schools bridges dams roads highways for that you need lots of capital and philosophically i'm always at a loss to understand and i'm not being provocative here but i'm always at a loss to understand why do sovereign wealth funds whose entire mandate is meant to be to safeguard the wealth that is currently being generated for future generations why do they put their money in buildings in various cities around the world why don't they put it into long-term project finance that is going to yield them stable three to six percent returns because that way you're doing good for society you're doing good for long-term stability and you're producing the returns that inherently their future recipients of that money are going to need so i'm just saying it's time for all of us to rethink the paradigm under which we look at this space now minister hearing all of this what are the lessons for you actually for attracting investors ease of doing business is very important because you know most countries you know cannot attract investors because of the process of like you know registering the company or getting approvals from different like you know the health environment whatever so this will make it very hard for the investors to be attracted as well you know since we have challenges we have political risk or uncertainty or whatever so we have to work on the process on easing the process of doing business you know mega is important very important in countries with difficulties of course and as well we should focus on diversification you know most countries are focusing on one line of either productions of or business or whatever and we have you know we have to focus on what we have what comparative advantage that we have and to highlight it in order to be a guideline for the investors you know here you can invest here you can make money it's not like you know to sympathize with us like in Palestine come and invest in Palestine I can't say it it's not the case in the business environment it's I have to work hard on as I mentioned earlier earlier the legal framework is of doing business and as well as a comparative advantage that we have thank you thank you minister now let me for the final what is it 10 15 minutes which we have um and I'm looking around the room out there let me before my question let's see where was I over there someone in the back I can't I can only see a hand yes madam hi I'm Tina global shaper from Cairo hub thank you so much for the session my question is for mr. Arif you are a very conscious investor in Egypt and you have invested a lot in hospitals health care and stuff my question is now with a devaluation it's not the first time that our currency is devaluated it's happened two times before this year how is the dynamics of investment is changing in Egypt after the devaluation is it really more lucrative for investors how do you see investment in Egypt in general now so thank you it sometimes gives me sleepless nights when I watch the impact of currency but fortunately one of the toolkits in our armory as a private equity firm is that we deploy money for the long term okay and in the long term and typically in a private equity structure we have 10-year funds and although we don't like to stay invested for 10 years it gives us the resilience and the approach to take a clearer understanding on where an underlying economy is going now if you ask me about where the underlying fundamentals of the economy in Egypt are concerned I think Egypt is a fantastic growth economy we at Abraja great believers in the Egyptian economic progress we think that the opportunity is high and we think that all the factors that contribute to a economy that is ready to break out are present in Egypt now in the short term contextually you will find that we have issues around currency but if I can take you back from the beginning of the Arab Spring till today with about 10 or 12 investments in Egypt and having you know significantly more than a billion dollars deployed in the country I can tell you that our underlying businesses were growing at 28 to 30 percent every year in local currency terms so what that gives me is the strength to be able to ride it out and to have the comfort that when that slow down or when the currency devaluation slows down the impact of returns is going to be greater okay so I do believe very strongly that when one looks at opportunities in markets like Egypt you examine the underlying fundamentals and I think that's important because it goes back to local thinking and if I may since you asked me a question directly about our business we've invested over the last 16 years 200 times in 200 companies and over this period our loss ratio is under 2% and when it's under 2% that's actually pretty good I'll say that as our own record card right because what it's saying is that in markets that the world considers risky if you don't lose capital there must be something you're doing right and the most important of it is local understanding and Egypt is a strong component of that thinking it's a great economy don't worry about it thank you Arif yes sir oh second row in that I'll get to you hi my name is Alhamid Shara I'm the founder CEO of Riseup it's one of the largest startup conferences so I'm with the 4IR program here with the 100 startups I'm also a global shaper from Cairo so sorry for the domination on the questions actually the question is a follow-up on Tina's question what what can the government and what businesses do to attract more investors coming in so from the other side what are more incentives that you would want to see as an investor and other investors coming you already took your decision and took the risk and you're doing very well but how can we attract more the rule of the government is to attract investors as well to provide some to facilitate the investor's business so one of the government the action that government should take is provide incentives incentives should be for local and foreign investors shouldn't just be for local it could be a tax break it could be like you know providing them with like in the industrial zones a place to set their businesses and as well like in our case you know we rely on donors you know we can provide them with the grants to start like you know we have in Bethlehem industrial zone it's we have a grant from the French government that is given to any investor in the industrial zones up to 50% of the cost of the equipment so this is an incentive I consider it same case in Jericho industrial zone the Japanese government is providing up to 50% of the whole cost of the project so this is as well incentive and as I mentioned earlier the ease of doing business this is something not tangible but this is very important for investors to start the business and not to face many difficulties to go to get the approval and to have a strong legal framework you have to have like you know laws regulations modern laws and regulations and as well you have to have a strong banking and non-banking sector in the country so all of these factors is the other responsibilities of the government so directly answering your question the role of government in my opinion get out of the way thank you very much and get out of the way right because in my book the private sector has the competence the capability and the will to invest in all of these countries and that is after all what capitalism is built on right and so the issue that is at play here is that governments actually in the 21st century should be in the business of governance not in the business of management okay and if you follow that theory through then all they're meant to do is to create the enabling environment as the minister just stated if you create the enabling environment you create a atmosphere where people feel good in investing then that young man over there is going to come up with yet another innovative idea and yet more brilliant thinking and new businesses will thrive and that is all that government should do in our world in MENA what we have is government is both a regulator it's an investor it's a manager and it is the law giver right and some of those have to give way because otherwise 80 percent of the people in of the workforce in this region will continue to be employed by government and it's not going to lead to development so with respect that is in my book a good approach thank you in a moment David we all panelists get a final minute but various people here in the room who would like to speak yes hi i'm aila i run a project advisory in MENA firm in Pakistan i would like to get panelists view and particularly that of mr when in these globally called global growth economies there are so many risk prevalent what are the minimum uh what are the minimum ingredients that the uh pe and the investors are looking for and on the other side what are the minimum that the governments can do i do agree that the government should get out of the way but what is this minimum that has to be there so that the governments can also provide that minimum we'll get to that in a moment that's a question from lady in a second row thank you very much alia mubayid from the double eye the bless and i want to get back to the question of of what we learned about the episode of the arab spring particularly looking at this region and how it informed our understanding and measurement of risk as mr nagvi said to ask maybe some of the panelists on on how the experience over the last seven years in the region have actually reshaped the approach whether of the private sector of an investor or of a um a banker who is financing project or amiga who is sort of guaranteeing the risk in analyzing and in taking on this risk and the reason why i say because i think and maybe here i i i take it uh i address mrs honda because i i remember i mean um that the key uh issue why investors have thought that the risk in the region was actually low ahead of the arab spring was exactly because of their over reliance on multilateral and international financial institutions who were telling the whole world that tunisia is the asian tiger of the middle east and that this is the way to go and that there is stability in egypt etc so there was a basically characterization of risk so so the question to you is what have we learned each one of us in our own processes in our own policy in our own embedding of risk in our analysis after seven years thank you thank you and then there is a question here row one and then we'll go back to the panel and each gets thank you very much actually uh my question is uh it's based on the question that the gentleman from egypt the young man over there asked about incentives but i want to build it on that so in a world today where there's a very big debate about free trade agreements between euro the transatlantic free trade agreements we find jordan a small country in the middle east we already have a full free trade agreement with the states of america a full feed free trade free trade agreement with europe free trade agreements with singapore with the arab countries so it's a fantastic market talking about incentives where anybody could invest silver products competitively to america to europe to asia to the arab world anything basically and and which is something that is extremely competitive so having this competitive edge and government not interfering and letting the businesses work on its on their own i would like to ask you from your experience so what are the incentives to attract like the young man asked over there that countries should give to attract foreign investment investors to come into the country keeping the risk that you talked about in mind but what are the incentives that would allow them to actually come and seriously take up use of those free trade agreements thank you sir uh that brings me to a final one minute for each of the panelists just really one minute in the order minister actually it's really very interesting but i'm i still believe that you know the government cannot set aside because you know because you know the government is responsible for the legal framework the government is responsible for having bilateral and multilateral agreement the government is responsible for the enabling environment so the government should be in but the government should not interrupt with the businesses and not to to help the businesses to to grow and to help them to uh to get like you know whatever is needed from the government in no time and you know when we look at the experience of singapore singapore was like you know with no resources 50 years ago and look how it is now it's like because the government in the enabling environment is great so and they have the legal framework so this is my point of view thank you thank you david i'm going to agree absolutely with the minister that's precisely where the government needs to play although i think the the aris pointers is one about kind of hands-on involvement in various management topics i'm going to make just two final closing points a sort of a summary of those last questions and one is is transparency um so the gentleman asked you what can what can operators do to crowd in more investment and the answer is your transparency of information you know and you know one thing governments can do is encourage more auditors so we all have we're all talking the same language and then lastly um back to the the egyptian point demographics and economic growth solves everything and um and the development expansion of local capital markets is going to be key to all of this thank you david thank you thank you it's very interesting questions i think today we are able to confirm private investor can pray actually large role in countries in transition a lot of private investors by the way is agreed on sustainable development goal so therefore what i'd just like to ask government today is free student breach the contract you enter into the gap into the private sector also free student take excessive control over the private enterprises and in case if you also want to deal with more cross-border investment full and currency conversion is key so so therefore appreciate government's consideration on it then at the same time we should actually keep encouraging private investor especially like a close border private investor support the development of young talents next generation readers of each country's in transitions miga would like to continue to support both private side as well as government thank you thank you very cool final one minute so so in answer to the question use so in answer to the question you specifically asked just remember investing is about the micro opportunity not the macro opportunity and in the micro opportunity the company you create has got to be able to be resilient enough to attract demand there is absolutely no substitute to the consumer focus on the consumer and your company will do well even during the arab spring okay focus on the consumer and that's where the opportunity is and then the point around government i do need to say this so that all my visas around the region don't get cancelled it's it's it's very important to say that my my point about getting out of the way is to get out of the way of that private sector investor create the enabling environment go through the process of creating an opportunity set for your people but the reality is that it is only the private sector that is going to create the innovation the jobs the excitement and the profitability that will lift all the boats in an economy it cannot possibly be the government acting alone and it is that which i find the most exciting which is the spirit of the entrepreneur in the arab world the focus of that in this particular summit which is what caused me to come to it and get that excited about it is that we have finally recognized the youth and entrepreneurs have a role to play and that role cannot now be stopped because disruption is the name of the game well a great many thanks to each of the panelists for a very unconventional conversation actually a number of rather rigid conventions have been eroded here which makes me very happy and i especially want to recognize that global shapers have have contributed to do this conversation in a very constructive and important way so thanks to each of you and to the audience for staying with us during this hour