Transcript FROM PARTNERSHIP TO FRIENDSHIPS: FLOWS AND FLAWS …

FROM PARTNERSHIP TO
FRIENDSHIPS:
FLOWS AND FLAWS IN THE
MEDITERRANEAN REGION
ANDREA GALLINA, Roskilde University
Federico Caffè Centre
Email: [email protected]
NAPLES, 8-9 JUNE 2006
The EU policy in the
Mediterranean
1957-1971
1972-1991
1992-1995
1995-2003
2003-
Mediterranean
Policy
Global
Mediterranean
Policy
Renewed
Mediterranean Policy
(RMP)
The EuroMediterranean
Partnership
(EMP)
The new European
Neighbourhood
Policy
POSTCOLONIALISM
COOPERATION
CO-DEVELOPMENT
PARTNERSHIP
“Rings of
solidarity”
NIGHBOURHOOD
“Rings of friends”
Amoroso, 2006
Development Aid through EMP
and ENP
 The EMP aid was funded through the MEDA Program a
development funds of 5.3 billion (2000-2006) (of which
86% channeled bilaterally), i.e. 750 euros per year,
supported by an extra EIB 6.4 billions in loans. This
equals to 9 euros per capita
 For 2007-2013 the ENP sets an amount of 14.9 billion
euros, i.e. 2.1 billion per year [to be shared among the
ten MPs and the seven new neighbor countries]. This
equals to 5 euros per capita (and if an estimates of other
2 bn per year allocated through FEMIP is added, then is
about 10 euros per capita…)
The ENP is changing the
cooperation framework
 Bilateralism over multilateralism
 The concept of Wider Europe disappears
 Friendship over Partnership (“all but institutions”)
 Conditionality in aid (to get a stake...)
 Confusion created over how to link the different
countries
 Post enlargement strategy
 Security over solidarity
The Southern and Eastern Mediterranean
is today still a periphery
 The Euro-Mediterranean is a paradigmatic example of
North-South relationship: manufactured goods vs raw
material
 Specialization patterns in the SEM is charaterized by
low value added production in manufactures and
agriculture
 Weak industrial production system (95% MFEs), lack of
an industrial burgeoisie/dominance of a commercial one
Mosaic, region or mesoregion?
EU
Non oil: Tunisia,
Morocco, Algeria,
Turkey
Libya
Oil: Egypt, Syria,
Lebanon, Jordan
Gulf
countries
THE EURO-MEDITERRANEAN LOGOS:
A WIDENING AND DEEPENING GAP
35000
Figure I - Evolution of GDP per capita, MEDA, New EU members and EU 1, US dollars,
current prices, 1992-2004.
MEDA
30000
New EU members 10
EU 15
USD
25000
20000
15000
10000
5000
0
1992
1993
1994
1995
1996
1997
1998
1999
2000
Measured in PPP the gap is less wide but not reduced
2001
2002
2003
2004
1 EU 25 ($27,861)
Figure II - Economic Step
between EU 25 and MPCs, GDP
per capita current $, 2004.
7 Turkey
10 Tunisia
11 Algeria
14 Jordan
17 Morocco
22 Syria
23 Egypt
27 Palestinian Authority
5 Lebanon
The GAP is not only widening
but also deepening
 HDI increased but still in the lower
brackets (between Lebanon 81 and
Morocco 141)
 New poverty pockets in the urban areas
 Dramatically high youth unemployment
FLOWS ASYMMETRIES:
TRADE, FDI...
 Trade with EU is asymmetrical (50% for MPs; 5% for EU)
 The trade balance is highly dependent on internal (bad
harvest) and external shocks (raw materials, oil prices)
 FDIs are erratic, linked to privatization, declining share on
world market
 The region has the lowest return from investments
 The main driver for FDI, i.e. Regional markets, is
abandoned within the ENP ...
COMPARING FLOWS IN THE MED
18000
ODA Net total donors
16000
FDI
Workers' Remittances
Millions $
14000
12000
10000
8000
6000
4000
2000
0
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Trade Deficits (in US$ Billion)
MPs and NMS (New Member States) shares
of EU imports (oil products excluded) (extra
EU-15)
LESSONS LEARNED FROM THE
RECENT REFORMS IN THE
MED
 Firstly, the assumption of an existing causal relationship between
economic and political liberalization has proven to be incorrect
 Secondly, the assumption that economic liberalization would lead to an
increase in foreign investments has also proven to be incorrect. The
specialization model in the region (agriculture or gas and oil) is not an
attractive factor for foreign investors.
 Thirdly, in the case of trade, the assumption that tariff dismantling has a
positive effect on growth has also proven to be incorrect. This is true only
if other conditions are present simultaneously such the level of capital
accumulation, the level of education of the labor force, a developed
institutional setting, the presence of a competitive industry.
THE MAIN “FLAW”
...LABOUR FLOWS...
 The MPs represent a traditional area of major emigration (from 5.8 to 8.2 million
in EU depending on who counts, and 16 mill in total, i.e. about 10% of the
population), and now also transit.
 Especially of semi-skilled and unskilled migrant workers (Fargues, 2005, p. 19).
 Given the demographic structure and the weaknesses of the economic reforms
in the MPs, migration flows are only expected to grow.
 The proportion of the population under fifteen will shrink in the next 10-15
years; consequently the proportion of the population of working age will grow
more quickly than the total population.
 Over the next ten years, optimist estimates calculated that the MPs will need to
create about 35 millions jobs just to maintain the present hardly tolerable ratio
of unemployment and under-employment.
AND REMITTANCES...
 According to the study by Page and Adams on a panel of
74 countries, a 10% increase of the migrant population
would lead to a decline of 1.9% of people living under the
international poverty line. Similarly, the study found that a
10% increase in the share of remittances in a country
GDP will contribute to a decline of 1.6% of the population
living under the international poverty line of $1 per day
(Page and Adams, 2003, pp. 20-22).
CAPITAL-RICH
UNDERDEVELOPMENT
 In the region workers’ remittances are two to three times higher than
FDIs flows and peaking at $15 billions they were about four times
larger than total overseas development aid in 2004.
 While the role of remittances for human capital development (through
households’ investments in education and health) and poverty
alleviation is undisputed, as well as their equilibrating effects for the
balance of payment, their multiplier effect for the local economies are
limited (Gallina, 2006; Glytsos, 1993).
 Therefore, in the MPs there is a situation of capital-rich
underdevelopment, i.e. an enormous amount of savings that cannot
be used because the infrastructural and structural deficiencies in the
region.
FROM ENP TOWARDS A
MEDITERRANEAN MESO-REGION
Two preconditions to be reestablished:
 Solidarity over Security
 Co-operation over competition
Areas of intervention to reduce the asymmetries
 Support PMI and MIF
 Increase value in the traditional activities (Mediterranean
model)
 Migrants as agent of development (remittances
mobilization)
 Integration of southern markets for attracting FDIs