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CMI and Femise identify post-covid opportunities in five Mediterranean countries


Written by Frédéric Dubessy on Thursday, March 3rd 2022 à 15:30 | Read 182 times



The joint report between CMI and Femise focuses on five countries (photo:CMI/Femise)
The joint report between CMI and Femise focuses on five countries (photo:CMI/Femise)
MEDITERRANEAN. The Centre for Mediterranean Integration (CMI) and the Euro-Mediterranean Forum of Economic Institutes (Femise) explore in a report* the opportunities to be seized, after the health, social and economic crisis of the Covid-19, to foster growth and deepen regional cooperation in the Mediterranean region. These three thematic chapters have been studied through a focus on five countries (Algeria, Egypt, Jordan, Morocco and Tunisia).

"The paper follows a series of analytical work led by the CMI since 2018 with a first report released in 2019", "Enhancing Mediterranean Integration". Then a second one in 2020, after the start of the pandemic, "Trading Together", had already launched the idea of using the health crisis to find opportunities to boost growth and trade between the two shores", comments Blanca Moreno-Dodson. Director of the CMI, she says that "this third report goes much further because it analyses in detail what types of trade flows could be the subject of this commercialisation.

The 146-page study, published at the end of February 2022 in English (a French version is in progress) under the title "Post Covid-19: opportunities for growth, regional value chains and Mediterranean integration", is the fruit of the first institutional collaboration between the CMI, which will be attached to Unops (UN) from 2021, and Femise, both based in Marseille. "We had already worked with some of their members. This strong partnership with Femise has allowed us, thanks to the technical contributions of their co-authors and the detailed comments of the CMI members, to refine the data and the recommendations," emphasises Blanca Moreno-Dodson.
 

Maryse Louis sees this report as a natural extension of her partnership with the CMI (photo: F.Dubessy)
Maryse Louis sees this report as a natural extension of her partnership with the CMI (photo: F.Dubessy)

CMI and Femise combine their expertise

"Together we bring together a very good knowledge of the region and a plurality of views and areas of expertise. This was necessary to ensure the quality and relevance of the analysis," says the CMI director. Maryse Louis, Director General of Femise, also sees this collaboration as "a natural development of our partnership as we find similarities and synergies in our objectives.

"Our two institutions felt the need to respond quickly and effectively to the crisis by joining forces and offering a common vision for the benefit of the region," she continues. From the beginning of 2020 to the end of 2021, her association has produced twenty-two policy briefs to "better understand the impact of Covid on the region in different sectors and propose recommendations", says the Femise director general.

"The crisis has revealed the vulnerabilities of the countries in the region in different areas and the report dives into the root causes of these challenges, particularly in terms of food security, and the fragility of the health sector with the aim of presenting solutions to improve food security capacity, strengthen and digitise the health sector and further develop the pharmaceutical sector", comments Maryse Louis.

For the Director General of Femise, this report has a double objective because it goes beyond this very important observation. "The crisis has created opportunities to deepen regional integration, with countries choosing to focus on shortening their value chains. The report highlights these opportunities for the EU-Med region by identifying 'product niches' for potential near-shoring between the two shores of the Mediterranean towards more substantial economic integration and better participation of Southern Mediterranean countries in global value chains," it says. 

The health crisis reveals the region's lack of integration

The Mena (Middle East North Africa) region remains the least integrated in the world. The health crisis has only exacerbated this recurring point. "If we look at the data, both on trade and on the movement of capital and people, we can only say that it is disappointing," laments Blanca Moreno-Dodson. She suggests "concerted actions at the level of the whole region, with the support of the current EU neighbourhood policy. This could involve "major investments that enhance and exploit the region's potential to become an engine of growth. This would be a combination of public policies (in some cases with changes in laws and regulations) accompanying the private sector and always in partnership with research centres, civil society and above all an educated youth to implement the necessary changes.

This battle horse has been ridden for many years by Femise, which "defends the importance of regional integration and the strengthening of relations with Africa (neighbours of neighbours), inclusive and sustainable development, the participation of the private sector, and growth driven by innovation, among others", as Maryse Louis explains. "Our report is therefore perfectly in line with our priorities and the continuity of our positioning on these subjects," she continued.
 

Patricia Augier notes the negative effects of the Covid-19 on the number of people falling below the poverty line (photo: F.Dubessy)
Patricia Augier notes the negative effects of the Covid-19 on the number of people falling below the poverty line (photo: F.Dubessy)

Many lessons learned

"This report shows once again the need for better South/South cooperation despite the political problems and the many obstacles," says Patricia Augier, co-author of this document which she co-edited with Blanca Moreno-Dodson. A professor at Aix-Marseille University (AMU), attached to the Aix-Marseille School of Economics (AMSE), she warns of "the negative effects of the Covid-19, which have been amplified in the countries of the South and East of the Mediterranean. They have been victims of a massive drop in funds and a collapse in tourism activity. The impact has been all the greater as "between 40 and 60% of their active population works in the informal sector. They are very vulnerable to poverty and are just above the international poverty lines. So it doesn't take much to push them below," she points out. Hence the importance of "focusing on the post-covid opportunities that could arise."

Among the lessons learned, Blanca Moreno-Dodson points to Europe's failure to exploit the production and export capacity of many products in Eastern and Southern Mediterranean countries. "The EU imports them from countries much further away geographically, notably from China," she says. The report suggests removing barriers that hinder this potential trade, and promoting investment in sectors that offer a competitive advantage.  
The CMI director also highlights the threat to food security in these countries, "because of Covid-19, but also because of climate change and the lack of development of both the agricultural sector and the Mediterranean diet. As well as "the importance of digital health to fill performance gaps." She also notes "the high potential of the pharmaceutical sector which should be further developed. I make this appeal to investors interested in the sector!"  
 

Blanca Moreno-Dodson regrets the lack of integration in the region (photo: F.Dubessy)
Blanca Moreno-Dodson regrets the lack of integration in the region (photo: F.Dubessy)

Value chains need to be strengthened

The Covid-19 has cruelly revealed the need to strengthen value chains. The countries of the Southern and Eastern Mediterranean, but also of Southern Europe, have quickly understood this. "We are already witnessing a shortening of these chains and their relocation in response to increases in transport and energy prices," notes Blanca Moreno-Dodson. "This has also led to a major awareness of the objectives of decarbonisation and environmental protection.  This trend had already begun since the global crisis of 2008 and Covid has only accentuated it. It's time to think about how to co-produce with our neighbours," she continues.
Patricia Augier has identified between 400 and 500 products exported by four countries (Jordan, Egypt, Tunisia, Morocco) to Asia and China that are imported by EU companies as intermediate goods. "This can be explained by a concern for simple optimisation or by a lack of knowledge of the products manufactured in the Mediterranean countries," deduced the report's co-author.

It remains to be seen whether the pandemic has finally been a blessing in disguise by revealing certain dysfunctions. The CMI director admits to being mixed: "It will only be if we know how to take advantage of this moment and if we know how to put aside possible differences, even at the political level, in order to seek a better common future for the following generations. To do this, we must value the current institutional frameworks as well as the regulations and policies that encourage the possibility of acting together, and not each one for himself. Blanca Moreno-Dodson rests her hopes on the Union for the Mediterranean, the new trade agreement between Europe and the African continent, the renewal of the European Union-African Union partnership, but does not forget "the role of the CMI in continuing to promote the integration of our economies, our capital movements and our peoples."

The report officially presented in Cairo

This report "Post Covid-19: Growth Opportunities, Regional Value Chains and Mediterranean Integration" will be officially launched on 26 March 2022 at the Economic Research Forum (ERF) annual meeting organised by Femise from 26-30 March 2022 in Cairo. "It will be presented by the lead authors and discussed by key panelists who will answer questions on next steps based on its findings," says Maryse Louis. "Some areas of study will need to be pushed forward. For example, food security is often confused with self-sufficiency and seen as protectionism, whereas in a crisis situation it is essential," comments Patricia Augier.

The document will then be disseminated through several thematic events, chapter by chapter, in collaboration with the French Ministry of Economy and Finance, the OECD (Organisation for Economic Co-operation and Development), the CIHEAM (International Centre for Advanced Mediterranean Agronomic Studies) and the World Bank. "Ideally, these ideas should be carried by the institutions. I would also like to see the private sector take them on," hopes Patricia Augier. "It should be mobilised in the European countries and those of the South and East of the Mediterranean in each of the sectors studied, to disseminate this information and see what can be put in place in the North/South relationship to create jobs in the South. This would be an opportunity to associate industrial policy and trade policy, the latter being at the service of the former. With real co-investments and real co-projects to change our way of cooperating and to be in a win/win relationship," she continued.

* Post Covid-19: opportunities for growth, regional value chains and Mediterranean integration". Author(s) : Patricia Augier, Blanca Moreno-Dodson, Pierre Blanc, Michael Grasiorek, Sami Mouley, Constantin Tsakas, Bruno Ventelou.



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