July 13, 2008
Ya Rayah...Ch7al nedmou lebad l-ghafline qblek: Southern Med & Socio Economics
With proper reference to Taha's Ya Rayah* which seems more than appropriate given the subject matter, and prompted by The Economist’s recent profile on investment in the Mediterranean as well as a series of articles on the Maghreb and southern Med region (let me call this MedSud from now on, as MEDA sounds idiotic), including a previously noted Lounsbury article from NY Times piece on Algerian Youth, an interesting FT series on labour markets, education and youth in MENA (and in particular on entrepreneurship, or rather not being a lazy bureaucrat), in addition to the rather cretinous article from Abu Dhabi on Maghreb investment that Hogan already cited.
Update: also in similar vein see Comments on Khaleej Times whinging on Islamic Finance
Update II - 15 Jul: quick clarification on my remarks and in particular my MedSud usage. While the underlying article and research by ANIMA covers a wider range - the MEDA zone as they define it including Israel and Turkey, my remarks do not. I personally consider both too different to look at analytically in grouping with the Maghreb or the Arab Machreq. Obviously discussable, but the remarks below should be understood as excluding entirely Turkey and Israel.
It would be fair to say that as The Economist arty says, attention to my area, MedSud, is rapidly rising – as is attention for Sub Saharan Africa (SSA), to which the Maghreb has some interesting connexions and opportunities on the probable long-term commodities price expansion.
For the first time in probably 30 years the underlying economic fundamentals for at least the Maghreb portion of the MedSud are looking pretty decent – with some black spots like Algeria and perhaps Egypt, driven by fundamental incompetence. Even higher energy prices for the non-hydrocarbon producers (or break-even producers) such as Morocco, Tunisia and Egypt may be a medium term benefit as the price competitiveness of China is going to be impacted head on by rising shipping costs, which have roughly doubled over 2005 (see Rising energy costs eroding Asia's competitive edge; Manufacturing News: Will Rising Logistics Costs Finally Reverse Trend of Offshore Production?; and more broadly < ahref=http://online.wsj.com/article/SB121479507619315069.html?mod=googlenews_wsj”> China's Export Machine Threatened by Rising Costs). Off shoring to closer locations (as returning to onshore / domestic) will be the result – an improved position for the MedSud at least from basic business opportunities. But for a region that has spent the last century never missing the opportunity to miss an opportunity...questions remain.
The missing of the opportunities will come directly from the Youth and Human Capital investment fuck-ups of the past 15-20 years, thus my referencing the arties in this area.
First some thoughts on the Economist comment:
Look southward from the southern tip of Spain, across the strait of Gibraltar. There, only 14km (nine miles) away through the slight sea haze, arises the vast construction works of a new seaport to the east of Tangier in northern Morocco. Tanger Med …. opened its first docks last July. Handling 3.5m containers a year, it is already as big as Felixstowe, Britain’s biggest port. A second terminal opens this summer, and within seven years its annual capacity will rise to 8.5m. It will be the largest container port in the Mediterranean, not far behind Europe’s biggest, Rotterdam (although merely one-third the size of the Asian giants of Singapore, Shanghai and Hong Kong). Similar ports are being finished in Algeria, Egypt, Malta and Tunisia.
It should be noted the Algerian one is said not to be going smoothly.
One-third of the world’s container traffic already passes through the Mediterranean, bringing manufactured goods from China and South-East Asia to Europe and the east coast of America. The Moroccans, spending some €3.5 billion ($5.5 billion) on Tanger Med, and others along the coast hope that if they build, a big slice of global commerce will come to their shores. Goods will arrive to be broken down into smaller loads and sent around Europe. Manufacturers will set up factories in tax-free zones planned around the docks, bring in components for assembly and serve the huge market across the water.
Already there is substance in the haze. The Mediterranean’s southern and eastern coasts are pulling in huge quantities of foreign direct investment, on a scale second only to China among emerging economies (see chart 1). The wave started about five years ago, and now private-equity groups and large investment funds from the oil-rich Gulf states are joining in. Tanger Med is but one mighty symbol that something is stirring along the coastline.
The encouraging item about Tanger Med (more so than its Algerian copy cat) is that it is actually very well thought out and integrated into a pretty decent overall market-oriented development plan, with face-value reasonable phasing. It could still fail, but the logic is solid. The overall investment figures given in the Economist article however seem to come from the ANIMA network and I think there is much counting of “vapour ware investments” or PR investments announced by the Gulfies that have not in fact materialized.
...The MEDA ten (a group of southern and eastern economies) have an average income per head of only $6,200, putting them roughly where western Europe was in 1950 and Romania was in 1975. Even though the gap in GDP per head has been closing, thanks to falling fertility rates as well as relatively faster economic growth, at today’s pace it would take almost 160 years for the MEDA ten to catch up with the European Union average. Unemployment is probably between 20% and 30%, even though official figures say it is around 12%.
…. Now the inflow of foreign direct investment may be reversing a long relative decline in the fortunes of the southern and eastern shores. The MEDA economies have managed to step up their growth rates to 4.4% since the turn of the century. A summit to be held in Paris this weekend may give the Mediterranean’s revival a further push.
Tanger Med is a point of arrival for foreign investors. The leading shipping and port companies, such as Maersk and DP World will have terminals there. This February Renault and Nissan started preparing the ground for a huge car factory costing €600m. The Franco-Japanese alliance aims to build low-cost cars and vans not just for Europe but for markets around the world, mostly in emerging economies where the basic Renault Logan has already proved a winner. Annual output will start at 200,000 vehicles, but will double within a few years.
Twenty years ago, Europe’s car industry stopped building new factories in low-wage Spain and Portugal, and turned to eastern Europe, including Turkey. The step across the Med, to a country where wages are one-fifth of what they are on the northern shore, is of great significance. Competitors will watch and may follow. Morocco has already attracted car-parts firms such as Leoni (from Germany), Valeo (France) and Clarcor (America). For 50 years Europe’s car factories have shipped in labour from Turkey and north Africa to their factories in Germany and France, and invested little to the south. Now the capital is moving to the labour: the mountain is moving to Muhammad, if you will.
It is worth noting that the Tanger Med development is attracting investment in not simply on labour cost, or infrastructure, but the apparent prospect of an integrated export platform with free zones, escaping from the confiscatory taxation of on-shore Maghreb. One would think the governments might take a lesson from seeing companies willing to pay reasonable tax rates (whether from getting reductions for listing – with all the implied transparency and thus tax exposure – or from setting up in export zones) and draw some conclusions regarding how their tax systems are strangling growth in the crib, in the name of faux social solidarity.
A few notes on the article’s EU-MedSud focus, I have a hard time buying the attention lavished on the ‘Barcelona Process’ as such, although some aspects have improved investment flows, it’s largely domestic liberalisation. It is also true as the quote below indicates, that because the Maghrebines get along like squabbling toddlers that would sell out his cousin for an ice cream, they’ve gotten a right poor deal from EU (largely thanks to their best Friend, Fransa, on Ag products):
Things have been stirring on the poor side of the sea since 2000, albeit painfully slowly. In 1995 the EU started what is known as the Barcelona Process, intended to forge a Mediterranean free-trade area by 2010. By and large, that is happening through bilateral agreements between the southern countries and the EU. Sadly, the southerners’ political conflicts and lack of will to act in concert—they do not even trade much with each other—meant that each country was dealing alone with the Europeans. That has cost them. For example, industrial products can move across the sea tariff-free, but agricultural products from countries such as Morocco are still subject to EU tariffs.
Piecemeal as it is, the political and economic partnership offered by the EU has prompted change to the south. According to Bénédict de Saint-Laurent, director of ANIMA, a network of inward investment agencies for the MEDA countries, it has prompted economic, financial and fiscal reforms which have made their economies much more open and more transparent. Inflation has come down from an average above 20% to around 5%. Debt has come down from 80% of GDP to around 60%, budget deficits from 5% to 3%. This has been fuelled by rises in receipts from tourism and remittances from migrant workers in Europe, as well as oil and gas revenues. The fiscal squeeze may not have done much for the region’s poor, but for the first time governments have the means to build better roads and houses, which are much needed.
Actually, for the first time in ages, proper and long-term growth is being made possible, that has done more for the poor than the rentier state of the 1970s.
Europe has also injected capital into the MEDA countries: around €8.7 billion between 1995 and 2006, plus loans worth €15 billion from the European Investment Bank and partners such as the World Bank under a programme known as FEMIP (Facility for Euro-Mediterranean Investment and Partnership). Between 2007 and 2013 another €14.9 billion is due to be sent as EU aid, with €8.7 billion from FEMIP. If that seems generous, an analysis by ANIMA suggests that at €8.30 per person up to 2006 and €12 up to 2013, it is minuscule compared with the hundreds of euros per person showered every year on eastern European countries before they joined the EU, and tinier still next to the structural funds lavished on Ireland, Greece and Portugal. But the EU’s involvement could be about to rise.
On taking office last year the president of France, Nicolas Sarkozy, launched his own plan for a Union for the Mediterranean … [skipping over the boring intra-Euro blah blah] …The EU’s clout and money are probably necessary to get the new union going. But there is a risk that European governments will concentrate on immediate questions of security and migration rather than on measures to boost the economies of their southern neighbours (which in turn may improve security and limit northward migration). In June Benita Ferrero-Waldner, the EU’s commissioner for external relations, told the European Parliament that real projects were needed to bring about economic solidarity. But she could cite only the promotion of fast sea-routes and a motorway linking the Maghreb (in the west) with the Mashrek (Egypt and the eastern shore). This weekend’s meeting, however, may produce a plan for closer integration. Despite the Franco-German row, observers such as Mr de Saint-Laurent credit Mr Sarkozy with breathing life into the flagging Barcelona Process.
Given my separate highlighting of the Algeria / Al Qaeda fil Maghreb al Islami concerns the article is quite right to focus the potential for too much focus on ultimately self-defeating “security” and migration efforts that tend to choke off business development (one can blither on and on about opening up new markets etc as the diplomats tend to do, but if the poor bastards on the south end can’t get a fucking visa, it’s all a bit rich, leaving them at the mercy of your bastards coming down… although in the case of France I think that is an actual objective).
On the investment side, some of the data cited I feel a bit quesy about as I think ANIMA has been a bit naïve regarding the Gulfie stuff, but even if off, at least the year on years should be more or less right.
For the first time the MEDA countries as a whole are punching their weight in terms of inward investment: they have about 4% of the world’s population and are now getting a slightly higher share of investment flows. Inward investment has grown sixfold in six years.
The leading recipients have been Turkey, Israel and Egypt. ….. [skipped Turkey and Israel as they are not really part of the MedSud region in these economic terms] Egypt’s political stability and economic reforms since 2004 have attracted investment too—notably the €12.9 billion purchase in December last year of Orascom Cement by Lafarge of France, paid for in Lafarge shares. Behind these leaders, Algeria and Morocco have each seen inward investment grow tenfold since 2002.
A nuance or two, La Farge buying into Egypt’s cement production is buying into the real estate boom, which I am rather sceptical about. Algeria’s real inward investment has been into hydrocarbons, as well as real estate. Not so much the rest of the real economy. That I would say is as much for the security situation as for quasi-Soviet style of government.
…. Behind this groundswell lie several factors. The boom in energy and raw materials has brought in oil and gas explorers but also investors in petrochemicals, fertilisers and cement. The maturity and saturation of European markets is another reason to look south. Privatisation of banks and telecoms firms has also attracted investors, notably from the Gulf. The recent strength of the euro against the dollar should help too. Safran, a French aeronautical firm, is directing investment to Morocco to escape the pain of the strong euro. It is a big supplier to Airbus, which has made it clear that it expects its suppliers to price in dollars. EADS Socata, another subsidiary of Airbus’s parent company, has also invested directly in Morocco for the same reason.
The source of the funds has changed in the past five years (see chart 2). Europe still accounts for about 40%, but North America’s share has shrunk from 25% to around 10%. Meanwhile the portion coming from the oil-rich Gulf states has risen from 16% to over 30%. More intriguingly, the share of emerging economies such as Brazil and India has climbed from 8% to around 20%. [emphasis added]
I tend to discount the Gulf investments as (i) large sums tend to be announced, but the figures are often wildly inflated (versus real capital injected), (ii) there is much ‘vapour ware’ investment projects, (iii) they’re largely investing in real estate speculation, based rather stupidly off of a combination of the Spanish Costa del Sol and the Dubai experiences. That is not going to work, I am certain. On that point, I would return to the idiocies of the article our man Hogan blogged, from Abu Dhabi on Maghreb investment. The core of this article highlights that the Gulfies have been planning on doing speculative property flipping games (selling off plan, to finance - a sure sign that they are not really injecting the headline capital), and their complaints about corruption in Morocco and Tunisia strike me as hypocritical excuse making as real issue is them not corruptly accessing real estate below value and then being able to flip to gullible English in London....
However, the last line, is genuinely very interesting as those investments – Brazil, India – are real industrial sector or productive sector investments, and are likely to bring in cross-fertilization or inter-emerging market fertilization in terms of management ideas on attacking global markets and intra-zone trade. Also note the relative full on retreat by North America.
Although energy is an important draw for investors, it accounts for less than one-sixth of the whole (see chart 3). Banking (led by European banks) has not been far behind. Industries such as telecoms, chemicals, metalworking, tourism and car parts continue to attract dozens of deals a year across the region. Europeans have been buying homes by the thousand. Many are long-term residents rather than tourists.
Well, most of the MedSud energy investments of importance are in the Algerian and Libyan cases, which are not much for other investments.
A quick note on the next item:
The inward investors can be grouped into four types, according to Mr de Saint-Laurent. The first might be called “offshore” investors. These are firms attracted by deposits of oil and gas in places such Algeria, Libya, Morocco and Tunisia.[sic] They are offshore in that they ship in all their labour, equipment and supplies. They pay the state for the resources they extract, but have little further effect on the local economy. The second group consists of European companies, led by the French but also including the Spanish and Italians. Reflecting their colonial histories, the French and Spanish tend to be found in the west, the Italians farther east. These investors usually form joint ventures or buy local small and medium enterprises, if only because such partners are needed in the Islamic Arab cultures of the region.
Ahem – Morocco has precious little oil and gas investment given no actual prospects. Regarding the buying of SMEs – that strikes me as a grossly stupid comment. Such partners are pretty much de rigeur in all emerging markets, being Arab and Islamic has fuck all to do with it. You need local reference friends in China, in Viet Nam as much as Tunisia and Morocco.
Re the Gulfies:
Third comes a new group, the Gulf funds. Their billions tend to go to the huge resorts springing up along the coast. Investors from Dubai have a €10 billion project in southern Tunis, a €3 billion development in Algeria and €600m site in Morocco. With them come Spanish builders, such as Sacyr Vallehermoso, which see on the southern shores of the Mediterranean an opportunity to recreate the old boom on the Costas back home. These investors have something in common with the offshore oil-and-gas brigade: often, not much spills over into the local economy besides low-paid jobs for cleaners and waiters.
Or rather directly, they tend to invest in pure real estate speculation, as the Zjoudj Sifr brigade seem unable to understand anything but stone.
But returning to the Sud-Sud angle, I absolutely agree with this paragraph (excluding the implicit idea that the French, the Spanish and the Italians are not ready to take over major or minor firms as such):
The fourth group, also newcomers, are perhaps the most interesting: investors from emerging markets. Several Indian companies have set up shop in the region. Tata has invested in motor manufacturing and outsourced information-technology work in Morocco. Wipro Technologies, a computer-services firm, also does IT work in the region. Ranbaxy Laboratories, a drugmaker, has factories there. Gujarat State Fertilisers and Coromandel Fertilisers from India are investing in a Tunisian factory to make phosphoric acid from the rich local reserves of phosphorus. South Korean investors also pop up, for instance with a car-parts factory in Tunisia and hotels in Syria. These industrial investors have no qualms about taking over local companies with thousands of employees—meaning that they are thoroughly integrated into the local economy, and their activities have a big knock-on effect.
I would add that suddenly one is seeing lots and lots of Korean and Chinese businessmen around – and not just the little traders playing “sell trinket & rubbish” game.
Finally on the PE / VC angle:
The region’s boosters would also like to attract more money from a fifth group of increasingly interested investors: private-equity funds. The rapid increase in foreign direct investment flows is encouraging, because they indicate the region’s attractiveness to international capital: the export markets it can serve, wage costs and so forth. Increased interest from private-equity groups in small and medium enterprises would be a measure of these investors’ confidence in the entrepreneurship on offer around the Mediterranean.
In 2007 private-equity funds had a remarkable year in emerging markets, with 204 funds raising $59 billion, about 80% more than in 2006. Around 140 funds are reckoned to operate in the south and east of the Mediterranean, plus another 181 in Israel (which is a case apart, because of the virtual integration of its economy with America in general and Silicon Valley in particular). But the funds are starting to spread throughout the region, with 18 in Morocco ($846m invested), ten in Egypt ($611m), nine in Tunisia ($64m) and nine in Turkey ($1.2 billion). The trend, however, has been to go for project finance rather than investments in smallish companies.
The only actual VC (and here I am using VC to talk about any smaller investment, not just early stage nor technology, with a view to growth) going on is in Morocco and to a lesser extent, Tunisia (if only due to the fact the economy has been reaching size limits of late, and Ben Ali’s guys have been taking too many haircuts). The Egyptian funds, I believe, are more Gulfish – but the numbers for Tunisia and Morocco are more or less local (I’d say 15 locals for Morocco).
Problem arises in muddying the picture in Gulfies coming in and pretending to be PE or VC, but really being RE Investment Trusts. Of course they don’t realize the difference.
Finally, on the closing:
The falling away of the countries on the Mediterranean’s southern and eastern shores from their European neighbours has been sad and wasteful. Algeria once was the breadbasket of the Roman empire; today it is the biggest wheat importer in Africa. Many things hold the region back, not least bad infrastructure, poor education and dysfunctional politics. The new economic hope is not evenly spread: foreign direct investment is swallowed disproportionately by Egypt, Israel and Turkey.
The boom in energy and raw materials should give many countries a start in building their economies up. If foreign investors do no more than harvest the oil and gas and leave, the region may simply stall again. What is needed is more of the joint-ventures and industrial projects represented by firms such as Safran and Renault-Nissan. But the real test will be whether the region’s economy can be broadened and deepened. Then clearer shapes may emerge through the haze across the strait.
Since neither Tunisia nor Morocco are really on the Hydrocarbons agenda, this closing somewhat irritates me insofar as it confuses Algeria and Libyan situs for the whole MedSud.
* - The linked video is really quite subtly brilliant in my opinion, although might not catch the eye of those who have not attended Maghrebine weddings fi Fransa)
Tomorrow: comment on youth, entrepreneurship and related items.
TrackBack URL for this entry:
Let me be the first to ignore the article's quite interesting content and object to your calling Ya Rayeh "Taha's". All he did was remix the rather better original by Dahmane El Harrachi.
Posted by: ChaabiPedant at July 13, 2008 06:54 PM
Investors from Dubai have a €10 billion project in southern Tunis
Yeah, this one is funny. They partnered (understand: offered cash, shares and at least some effective control) with King Ubu's family (unavoidable if you want to do business even on a smaller scale there), but I've had echos of some competent folks losing their positions in favor of Ubu kids and buddies. To be expected in most emerging markets I would say, but the extent to which this is usually made there might very well impact it to the point of fucking it up completely (though I have no idea how far it's going right now having been relatively disconnected from business in MENA for some years). I would be really curious to know how the Dubai folks are managing this, or at least mitigating their risk, if they're aware of it that is.
Sadly, the southerners’ political conflicts and lack of will to act in concert—they do not even trade much with each other—meant that each country was dealing alone with the Europeans.
There are signs that this might be improving. See GAFTA, and most importantly, the various bilateral agreements which are being implemented to at least some extent. I don't know how those are actually materializing (as I said, I've been d/c for a while), but I've seen studies indicating that they actually might be generating results (I'm taking them with a grain of salt, given history of non tarrif barriers or mere non implementation, on top of more theoretical issues such as the reliability of long term event studies over the whole MENA region).
Regarding the buying of SMEs – that strikes me as a grossly stupid comment. Such partners are pretty much de rigeur in all emerging markets, being Arab and Islamic has fuck all to do with it.
Indeed, that's pretty much Third World 101, hardly exclusive to the Quran brigade.
Man, the blatantly idiotic stuff people can get away with asserting is astounding.
Posted by: matthew hogan at July 13, 2008 11:17 PM
More Maghreb round up.
Posted by: matthew hogan at July 13, 2008 11:31 PM
Dear Chaabi Pedant: Well chosen the name. I prefer Taha, and it's Taha's Ya Rayah that is linked, not the older version. Standard joined up English usage that. Eh, clear enough?
Posted by: The Lounsbury at July 14, 2008 10:15 AM
I do think there are signs of progress. Glacially and as likely to be aborted as not.... but there.
Posted by: The Lounsbury at July 14, 2008 10:18 AM
Several questions are raised in the interesting comments of this page. Most of them (eg. where are the investors coming from etc.) are answered in the comprehensive survey published each year by ANIMA. See this year issue : " Foreign direct investment into MEDA in 2007: the switch". May 2008 downloadable on http://www.animaweb.org/en/etudes.php
Posted by: de Saint-Laurent at July 14, 2008 03:52 PM
2nd comment : what is said about Gulf investors is right. They ratio "announced investment" vs. "actual investment" is low compared to other investors; in several cases, they expect to be joined in by locals. When counting the actual value of their FDI, ANIMA depreciates the volumes according to past experience. Only reliable projects are considered (eg. one of the five Emaar projects in Greater Algiers -the others will be accounted later -if they materialise).
3rd comment : what is said about PE and VC is being increasingly wrong -the picture is changing rapidly and not only in Israel, Morocco, Tunisia, Turkey. Again, a recent survey realised by ANIMA (also downloadable at the same address) identifies 320 funds, of which a half (and commitmments of US$15 bn) were raised in the last 3 years. However, the average ticket ranges from 2 to 7 million US$, which leaves a wide equity gap for new companies in the range 50,000 /2m US$, precisely the type of start-ups who should create most jobs in the region;
4th comment : the pb with the region (MedSud as you call it) is "misdevelopment", I mean projects based on rent (telecom licences, real estate, tourism), sometimes without sustainability (what about tourism when all the landscape or seashore will be destroyed and the sea polluted?). This is why ANIMA is pushing towards a better integration of foreign projects in the local value chain, with an emphasis on the economic multiplier. Off-shore projects and short-term projects do not really bring development to southern countries. They just capture resources or maintain the region in a dominated relationship. ANIMA (through a new project "Invest in Med") is working on this new approach -maximisation of spillovers, sustainable co-development, increased local ownership, Med branding, Med leadership along the value chain, internationalisation of Med SMEs etc. This will take time...
Posted by: de Saint-Laurent at July 14, 2008 04:13 PM
Thanks for your comments dST (if I may amuse myself thusly with the abbrev).
As a practioner, I am aware of the ANIMA resource, often consult it. My comments, thusly, are not from "left field" as one says in the US of A. That being said, they were impressionistic.
I still have reservations on how you are counting the Gulfie projects as the whankers wildly exagerate the amount of actual real capital they put in - far more than anyone else exagerates in my read. I've become deeply cynical about their numbers. It may be your discounting is enough, I have my hesitations.
Re PE & VC: I respectfully disagree. As a practioner this is "development" counting and I don't particularly think you guys have your heads around what the real deal is.
There are, at best, a handful of actual VC operators - being relatively loose in defining VC but nevertheless taking the classic definition of post-seed [that is investment post product development but potentially pre-revenue] up to internally generated growth / expansion. I'm not ideological about the VC-Tech/Innovation angle, insofar as I see brining in management "technology" (or really innovative management) to create new value out of 2nd generation technologies in region to be a good call as "venturing."
Looking at "ticket size" is almost meaningless.
Then there are the 'small PE' players, who are doing old-school 'Anglo Saxon' type PE. I'd call that the majority in the Maghreb. Egypt, I won't opine on as my view of the Egyptian actors is coloured by some history. Turkey I am indifferent on, so none of my comments touch on that - indeed I don't believe either Turkey or Israel can usefully be included in MedSud analytics. You guys have a quasi political mission, so .... there you are, but I wouldn't do it as a private analyst.
The last type is the PE funds - Gulf - that I rather discount as not doing in general actual PE, but either being disguised holding companies OR Hedge Funds or Real Estate Investment Trusts. My analysis there is purely private. I really don't give a damn what they claim, I know what I see.
Of course there are also the big international / regional PE funds, but I view them as incidental to the development of the markets as such.
Now, as to the "equity gap" you're talking to - that's Pre-Seed to Seed stage for those sizes, and it's bloody well fine to talk theoretically about them generating growth, but the reality is that this is a damned hard area to be in, and it ain't the capital that's the problem, it's finding real entrepreneurs - and not loosey goosey Entrepreneurs in the abusive near meaningless sence used rather too often by the Governmental types, but real ones.
The core problem here is not the damned money mate, it's having the right investor profile:
(i) Seed and VC only work when you have mixed teams with operational and finance experience;
(ii) Activist, non-financial approach to investing;
(iii) Real closeness to the ground, with excellent peer-to-peer relations, not come in every bloody quarter and look at the numbers. OPERATIONS. Talk the investees language, not bloody IRR and IPO (obviously creating that value has to be the goal, but boring the manager w financials rather than looking to the WHY behind the number).
My advice, stop bloody talking about an equity gap with focus on amounts as such, and look at the VC Gap. Investment style, make sure it is up close, mixed teams, know the managers and know how to talk to them as fellow managers not I-Bankers blithering on about Quarterly Goals and other damned listed market concepts.
Posted by: The Lounsbury at July 15, 2008 06:39 AM
BTW, I should add that despite my critical remarks, I do rather like the ANIMA initiative. I was just re-reading the Funds profile, which I did see when it came out (I thought I had blogged it but find I started a draft and abandoned due to work, pity really), and I note the current online copy says Survey No.2 July 08 - is this updated from the earlier copy or am I confused?
Posted by: The Lounsbury at July 15, 2008 07:16 AM
Let's give credit where it is properly due; Ya Rayah is Dahmane el-Harrachi's, not Taha's.
Posted by: Nouri at July 19, 2008 10:17 PM
Is this the only thing you retards can find to comment on, the fucking music?
Here, a lesson in English, for those of you not fully fluent or otherwise retarded:
Common usage such as "Taha's Ya Rayah" may be taken to mean, above all when not written by some goddamned fucking whanker of a Music nerd, "The version of Ya Rayah" by Taha.
Now fuck off you drooling morons. Goddamned fucking music freaks.
Posted by: The Lounsbury at July 20, 2008 06:36 AM
Actually I've identified Mr. Lounsbury, complete with same ethno-geographic appropriate personal home relationship.
But I suspect the comfort with yellow teeth might blast the theory.
Posted by: matthew hogan at July 20, 2008 03:51 PM