Ladies and gentlemen
Excellencies
Dear colleagues and friends
Ladies and gentlemen
Welcome to this Swiss dinner. I would like to particularly welcome the young entrepreneurs among you. Tonight is not only about you, it is first and foremost with you. We are grateful that you are participating, and I look forward to our discussion. I would also like to thank my co-hosts, Professor Klaus Schwab (World Economic Forum) and Philippe Le Houérou (International Finance Corporation), for making this a joint endeavour.
Why a Swiss dinner in Jordan?
To begin with, this dinner reflects our close ties with our host country, Jordan. This afternoon, we visited Camp Azraq where 35,000 Syrian refugees are living. For the past one and a half years, Switzerland together with the UNHCR, UNICEF and the Jordanian government have worked hard to improve the water supply system in this camp. Jointly opening the tap and having fresh drinking water come out was really a moment of shared achievement. I wish to commend Jordan for how it is dealing with the difficult refugee situation. Foreign minister Safadi and I had an excellent discussion today on how to take our cooperation forward.
This dinner is also an expression of our ‘special relationship’ with the World Economic Forum. I normally meet you, Professor Schwab, in Davos – in the beautiful Swiss mountains. Carrying the spirit of Davos and Switzerland to the Middle East is a great idea, and we would like to support you in doing so.
The prime reason for this Swiss dinner is, however, a conviction that we have. And that conviction is that promoting entrepreneurship is a major driver of development and positive change. This conviction is based on our own experience: entrepreneurship and innovation are a big part of the explanation of why Switzerland ranks among the 20 biggest economies in the world. This is quite remarkable, given that my country has only eight million people and few natural resources.
One of the biggest challenges that the Middle East and North Africa region faces is unemployment, and youth unemployment, in particular. According to the Arab Youth Survey of this year, young Arab people view unemployment as one of the two biggest problems holding back the Middle East, together with extremism. This lack of opportunity is a tragedy for each young man and woman concerned. It provides for a depressing choice of living in poverty, emigrating or, in some cases, turning to extremist groups. The problem could become exacerbated as a result of the demographic boom.
A key task of politics is to provide good prospects for young people. In the MENA region, the issue is how to harness the demographic youth bulge for economic development rather than view it as a burden. How can the potential of this large reservoir of agile and often well-educated young people be better tapped?
A large part of the answer should lie in private sector development. We have seen in many places that the old model of creating jobs through expanding the public sector has reached its limits. Fresh approaches are needed to be able to absorb the ever larger number of people entering the labour market.
It is in this spirit that we are having this Swiss dinner. We are keen to hear your ideas and needs, and to learn from your experiences of how to create private sector jobs and promote entrepreneurship in the Middle East and North Africa. To kick off our discussion, allow me to make five proposals based on lessons from Switzerland’s own engagement. These proposals concern start-ups, governance reforms, education, finance, and the support for women.
First proposal: Supporting start-ups should be a priority as we seek to foster an entrepreneurial culture in the MENA region. In Switzerland, start-up entrepreneurship is of macroeconomic importance. All start-up businesses combined create more than 20,000 jobs in their founding year. While half of Swiss start-ups go out of business after five years, the growth of the successful companies compensates for this. After the fifth year of existence start-ups have three times as many employees as the Swiss average company. Often these are high quality jobs.
Start-ups create jobs and drive economic renewal. They enhance competition. Societies benefit from entrepreneurs who trigger economic disruption. Who boost creativity rather than risk-aversion. And who live according to the paradigm of trial and error rather than stigmatizing failure.
The potential for viable start-up ecosystems in the MENA region is there. Initiatives like the one by the WEF and the International Finance Corporation, which brings together 100 Arab start-ups, can give a major boost. Switzerland, for its part, has launched a regional project to train and support start-ups in the field of water and sanitation. In Jordan, 12 start-ups have just been selected for the first one-year programme. The project will help strengthen the role of the private sector in sustainable water management. It is about attracting young talents to the water sector and creating innovative solutions and new jobs in a field that is critical for the Jordanians as well as refugee communities.
Second proposal: creating a business environment conducive to entrepreneurship should be a priority for states in the MENA region. Developing the private sector requires the political will to engage in structural reforms, addressing regulatory and institutional obstacles hindering growth. Broader governance reforms are equally important. I am thinking of the fight against corruption, the promotion of transparency and accountability, and provision of equal opportunities for all entrepreneurs by dismantling systems of privileges. In North Africa, Switzerland supports both governance reforms and economic development.
Third proposal: There is a need to gear education more towards the jobs of the future. Switzerland supports the Education for Employment Programme of the International Finance Corporation that provides Arab youth with skills relevant to the marketplace. Via its Development Finance Institution – the Swiss Investment Fund for Emerging Markets – we support the provision of quality education services to underprivileged people in Egypt, including to refugees.
The potential for more vocational training in the MENA region is considerable, and we are ready to share the Swiss expertise. Concerted efforts are needed, however, to convince people that manual and private sector jobs can be just as desirable as government jobs. This year, the United Arab Emirates will be the first country in the Middle East to host the biannual WorldSkills Competition. This is a great opportunity for showing how technical and vocational education will help meet the challenges of a knowledge-based economy.
Fourth proposal: Access to finance is a precondition for an entrepreneurial culture to flourish. Enhancing such access is a priority of Switzerland’s private sector promotion portfolio. Our focus lies on micro, small and medium-sized enterprises. Reducing their difficulties will help promote sustainable job creation and encourage private-sector-led growth.
Last year I visited one of our projects in this field in Tunisia. There Switzerland is providing microcredits and advice to young people in disadvantaged areas who want to set up their own small business. 15,000 jobs have been created through this since 2012. Providing people with opportunities is good not just for the economy. It is also a vital measure against the spreading of violent extremism.
Fifth proposal: in our larger scheme of fostering entrepreneurship, support for women should be a priority. Encouraging and helping women to start their own business can give a boost to them, their families and the development of the country. It will make the economy more competitive while at the same time reducing gender inequalities.
In this field, Switzerland again works closely with the International Finance Corporation. We are focusing in particular on access to finance for women. I encourage female entrepreneurs among us today to present their views on how we can help them best make their business plan work.
Ladies and gentlemen
Let me conclude with two broader remarks:
For one thing, I encourage you to reflect on what we are discussing tonight not just in your national contexts but rather in a regional perspective. Building more regional cooperation in the Middle East and North Africa will bring more security and prosperity for all and is a priority of Swiss MENA policies.
A few days ago, the SESAME institute was inaugurated in Amman. Being the first intergovernmental scientific facility in the Middle East, SESAME is made up of physicists from Bahrain, Cyprus, Egypt, Iran, Israel, Jordan, Turkey, Pakistan and the Palestinian Authority. This exciting endeavour should inspire us to help build bridges and foster a sense of regionalism in our efforts too. Our very gathering tonight is an exercise in region-building. The private sector can do much to build closer ties between countries. More business contacts and more trade will also bring more trust.
This brings me to my final remark: Promoting entrepreneurship and implementing proposals such as those I have made tonight – start-ups, governance reforms, education, finance, and the support for women – must go hand in hand with comprehensive efforts to end the wars in the MENA region. These wars have major spillover effects to the region at large. They are a major obstacle to economic and social development, and we cannot simply try to work around them. Switzerland will continue to offer its good offices to advance dialogue and political solutions, including as host nation of the intra-Syria talks. Because what we all need is – simply – peace.
Thank you for your commitment.