“We hope that financial institutions will diversify their investment portfolios and take into consideration the changing global dynamic..." - Al-Mashat
The pandemic has brought about new opportunities to reinforce regional cooperation and to restructure global and regional value chains in favor of economies in the Middle East, says Minister of International Cooperation, Dr. Rania A. Al-Mashat during a virtual workshop to review investment policies for Arab financial institutions.
Al-Mashat underlined the value of cooperation with the International Islamic Trade Finance Corporation, and points out that the pandemic can reinforce regional cooperation.
The minister participated on Tuesday in a virtual workshop organized by the Arab Fund for Economic and Social Development to present the study ‘Reviewing the Investment Policies of Arab Financial Institutions’ presented by Mercer's global investment research department.
The virtual workshop also included the participation of the Saudi Arabia’s Minister of Finance, H.E. Mohammed bin Abdullah Al-Jadaan, Tunisia’s Minister of Economy, Finance and Investment, H.E. Ali Kooli, and representatives of the United Arab Emirates’ Ministry of Finance, the United Nations, representatives and chairmen of the board of directors of Mercer's office, the Arab Fund for Economic and Social Development, the Arab Investment and Export Credit Guarantee Corporation, the Arab Monetary Fund, the Arab Bank for Economic Development in Africa, and the Arab Authority for Agricultural Investment and Development.
The COVID-19 pandemic has exposed fault lines and brought about further challenges to the Middle East region, leading to investment climate weaknesses as the region’s economy was expected to contract by 5.7 percent in 2020, according to the International Monetary Fund.
Against this backdrop, the virtual workshop highlighted the need for member states to adopt long-term strategies and diversify investment portfolios, taking into consideration the changing global dynamic in light of the pandemic.
It also called for periodic monitoring of regulatory frameworks and the significance of improving governance in order to enhance the efficiency and quality of institutions in the region.
In Al-Mashat’s speech, she highlighted the value of Egypt’s cooperation with the International Islamic Trade Finance Corporation and the positive impact it has had on regional development since its inception in 2008, becoming the leading provider for trade data and solutions to all member countries.
“We hope that financial institutions will diversify their investment portfolios and take into consideration the changing global dynamic, particularly with the outbreak of the second wave of the COVID-19 pandemic, which will most definitely affect investments in the region,” Al-Mashat stated.
In a global context, there is opportunity for investors to invest in infrastructure and clean energy to pave the way for a more sustainable and green future in emerging economies, she added.
According to the International Renewable Energy Agency, investment in renewable energy could add almost $100 trillion to global GDP by 2050.
Al-Mashat joined global leaders and senior decision-makers in the MENA region in signing the “Principles of Stakeholder Capitalism” as members of the World Economic Forum’s Regional Action Group for the Middle East and North Africa on September 2020, which will chart pathways for an inclusive, sustainable and resilient recovery for the region.
In 2019, the Board of Governors of Arab Financial Institutions formed a ministerial committee that includes representatives from five countries, namely Egypt, the UAE, Saudi Arabia, Tunisia and Oman, with the aim of developing a general framework and a group of experts to review investment policies for Arab financial institutions.
Mercer was selected among three consulting firms to conduct an evaluation study and review investment policies for Arab financial institutions through a methodology based on four main aspects: organizational structure, governance framework, investment objectives, and implementation, monitoring and reporting.
According to the Ministry of International Cooperation’s 2020 Annual Report, the Ministry succeeded in securing development financing worth $638 million in 2020 from the Arab Monetary Fund to strengthen public finance reforms.