The investment climate across the Middle East and north Africa (MENA) is, to say the least, uncertain given the political turmoil across the region.

With mass rallies and political protestors in Egypt calling for president Hosni Mubarak to step down immediately, investors can only watch and wait, hoping that the outcome – in this case a smooth transition of power – will result in greater openness and transparency and a more level playing field. And for the moment, that’s what investors are doing; holding tight and adopting a wait-and-see approach, whether they already have assets in the country or are looking to invest there.

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In Tunisia, domestic and international investors are also hoping for an improved political and economic landscape. The policies of Tunisia’s previous regime appeared to impact on domestic investors more than international ones, and they were “beginning to feel strangled”, a north Africa-based regional director for a financial services advisory firm told me. Domestic venture capital people could not criticise the investment climate at all, he said, “so if there is more freedom of speech, this could lead to an improvement in the investment climate”.

An oil industry consultant in Dubai also commented that the political situation in Tunisia could get better if the right people come into power. "If I were an oil company, I would sit tight and see what works out."

The emergence of a stable provisional government is what investors will be looking for, the director said, and expected this outcome to be quite high. However, if a Labour-led government emerges, there is a risk that it could pass some non-competitive measures, such as those restricting labour flexibility, he said. Nonetheless, he believed such a risk to be relatively low, putting the likelihood of a strong provisional government emerging at about 70%.

Investors can only hope that the odds of a positive outcome are the same for Egypt.

Lucia Dore is the head of GCC and Middle East at mergermarket, part of The Financial Times Group.

E-mail: lucia.dore@mergermarket.com