Econostrum | Economic News in the Mediterranean

Blue transition to boost Mediterranean GDPs

on Thursday, October 28th 2021 à 14:59 | Read 575 times

A study by the Euro-Mediterranean Economists’ Association and the Euro-Mediterranean Network for Economic Studies shows the positive effects of the blue economy on Mediterranean countries’ GDP and unemployment levels.Version française

Technical progress, demographic growth, bilateral trade, development of a skilled labour force, climate change and energy policies are just some of the data passed under the blue economy scanner in a study entitled “The Euro-Mediterranean Blue Transition Scenario 2050” published in June 2021.

The study, carried out by the Euro-Mediterranean Economists’ Association (EMEA) and the Euro-Mediterranean Network for Economic Studies (EMNES), takes its lead from an earlier report dated June 2020 that sets out four pillars of development: transparent governance, responsible living, an inclusive economy and sustainable energy and environmental goals.
This document goes a step further by setting out a “consistent projection of the energy and economic systems for the Euro-Mediterranean countries”. It separates the anticipated development, brought about thanks to the blue economy, into specific elements and sectors for eight countries*. Thus, it highlights the capacity constraints and comparative advantages for growth of each country against a reference scenario of maintaining current policies within a context of sustainable development. The study reveals that almost all aspects of the blue transition premise prove to be beneficial for the countries covered.
The combined effects of the various actions translate into GDP growth ranging from 3.7% in Israel for the period 2020-2030 (3.3% thereafter until 2050) to 5.7% in Egypt to 2050.

Long-term economic growth

This increase also affects employment, with greater female participation in the labour market and better qualified jobs bringing down unemployment. Consequently, between 2020 and 2050, levels drop significantly in Algeria (11.2% to 8.8%), Egypt (10.5% to 8%), Morocco (10.2% to 8%), Tunisia (16.7% to 10%), Turkey (13.9% to 8.5%) and Jordan (18.5% to 10%). In the worst cases, unemployment remains more or less stable as in Israel (4.6% over the period) and Lebanon (6.6% to 6%).
The 2020-2030 period remains a bridge to be crossed, however, one during which some countries will see short-term outlay that will diminish the positive impact of the various measures. The study puts this down to “the expenditures required to change the economy and the energy system”, the latter requiring for example an increase in imported goods. These will “put a strain on capital markets, where the availability of financing is limited”, with consequential trade and public deficits.
However, the authors note, “in the long term, the effects of permanent productivity drive economic growth and these benefits more than counterbalance the short-term losses”.
* Morocco, Algeria, Tunisia, Jordan, Lebanon, Egypt, Turkey and Israel.
View the “The Euro-Mediterranean Blue Transition Scenario 2050” report
Authors: Ioannis Charalampidis (researcher), Panagiotis Karkatsoulis (researcher) and Leonidas Paroussos (director-general) at E3MLab, associate member of the EMNES

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